Multiple Choice Questions

ABC systems
  • The availability of reliable data and metrics
  • An activity cost pool collects costs related to the same activity
  • The necessary information is readily available
  • A) highlight the different levels of activities
A company estimates that overhead costs the next year will be $8,320,000 for labor and $155,500 for factory ulitiesThe company uses machine hours as its overhead allocation baseIf 400, 000 machine hours are planned for this year, what the company's plantwide overhead rate? Round your answer to two decimal places.)(8330000+155,500)/400000
  • 50.50 per machine hour
  • 21.19 per machine hour
  • Plant wide overhead rate method
  • Activity based costing
The cost object(s) of the activity-based costing method is(are):
  • The departmental overhead rate method assigns overhead on the basis of volume-related measures.
  • A company that manufactures few products and whose operations are labor intensive
  • The production activities in the first stage and the unit of product in the second stage.
  • It may fail to accurately assign many overhead costs that are not driven by production volume
Over head costs:
  • An activity cost pool collects costs related to the same activity
  • Column based methods are easier to use and less costly to implement and maintain
  • A company that manufactures few products and whose operations are labor intensive
  • Cannot be traced to units of products in the same way that direct labor can
____costs support the company as a whole
  • Factory-level
  • activities
  • Activity based costing
  • Cost pool
West Company estimates that overhead costs for the next year will be $5,240,000 for Indirect labor and $550,000 for factory utilities. The company uses machine hours as its overhead allocation base, 150,000 machine hours are planned for this next year, what is the company's plantwide overhead rate?
  • 50.50 per machine hour
  • 21.19 per machine hour
  • DCBA
  • 38.60
Which of the following statements is true with regard to the departmental overhead rate method?
  • It is logical to use this method when overhead resources are consumed by various products in substantially different ways throughout multiple departments
  • A company that manufactures few products and whose operations are labor intensive
  • It may fail to accurately assign many overhead costs that are not driven by production volumn.
  • It may fail to accurately assign many overhead costs that are not driven by production volume
From an ABC perspective what causes costs to be incurred
  • activities
  • An activity cost pool collects costs related to the same activity
  • Cost pool
  • Factory-level
Which of the following statements is true of activity based costing
  • It may fail to accurately assign many overhead costs that are not driven by production volume
  • An activity cost pool collects costs related to the same activity
  • It may fail to accurately assign many overhead costs that are not driven by production volumn.
  • A company that manufactures few products and whose operations are labor intensive
Which of the following casting systems is more accurate for overhead cost allocation and most likely to allow managers the ability to make better pricing decisions?
  • Budget accountants salary
  • An activity cost pool collects costs related to the same activity
  • A company that manufactures few products and whose operations are labor intensive
  • Activity based costing
What are the main advantages of volume based allocation methods compared to activity based costing
  • Column based methods are easier to use and less costly to implement and maintain
  • It may fail to accurately assign many overhead costs that are not driven by production volume
  • More accurate product costing more effective cost control and better focus on the relevant factors for decision Making
  • A company that manufactures few products and whose operations are labor intensive
ABC assumes all costs in a _____can be grouped together because they all impact the activity
  • Factory-level
  • Cost pool
  • Plant wide overhead rate method
  • activities
Peterson Company estimates that overhead costs for the year will be \$6,520,000 for Indirect labor and $550.000 for factory utilities. The company uses machine hours as its overhead allocation base. If 140, 00 machine hours are planned for this next year, what the company's plantwide overhead rate? (Round your answer to two decimal places.)(6520,000+550,000)/140,000
  • Plant wide overhead rate method
  • 50.50 per machine hour
  • Activity based costing
  • 21.19 per machine hour
Put the following ABC implementation steps in order_____. A use activity overhead rates to assign oh costs to cost objectsB compute allocation ratesC trace overhead costs to cost poolsD identify activities and oh costs they cause
  • Cost pool
  • DCBA
  • 50.50 per machine hour
  • Activity based costing
Which of the following companies would be best served by a plant wide overhead rate?
  • It may fail to accurately assign many overhead costs that are not driven by production volume
  • A company that manufactures few products and whose operations are labor intensive
  • It may fail to accurately assign many overhead costs that are not driven by production volumn.
  • An activity cost pool collects costs related to the same activity
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Multiple Choice Questions
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