10 Jan The overhead applied
1.
Gould Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products:
Activities
Activity Rate
Setting up batches
$84.00
per batch
Processing customer orders
$75.15
per customer order
Assembling products
$10.46
per assembly hour
Data concerning two products appear below:
Product V09X
Product A09X
Number of batches
69
12
Number of customer orders
20
9
Number of assembly hours
492
697
How much overhead cost would be assigned to Product V09X using the activity-based costing system?
$169.61
$112,007.88
$12,445.32
$5,796.00
2.
Abraham Company uses activity-based costing. The company has two products: A and B. The annual production and sales of Product A is 2,700 units and of Product B is 1,500 units. There are three activity cost pools, with estimated costs and expected activity as follows:
Activities
Estimated Overhead Cost
Expected Activity
Product A
Product B
Total
Activity 1
$92,063
2,200
2,100
4,300
Activity 2
$116,739
3,200
1,900
5,100
Activity 3
$128,186
1,080
1,060
2,140
The overhead cost per unit of Product A is closest to:
$68.53
$80.24
$101.30
$56.28
3.
Fullard, Inc., manufactures and sells two products: Product E2 and Product G3. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below:
Expected Production
Direct Labor-Hours Per Unit
Total Direct Labor-Hours
Product E2
1,000
6.0
6,000
Product G3
800
5.0
4,000
Total direct labor-hours
10,000
The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity:
Estimated
Expected Activity
Activity Cost Pools
Activity Measures
Overhead Cost
Product E2
Product G3
Total
Labor-related
DLHs
$269,900
6,000
4,000
10,000
Machine setups
setups
74,178
500
400
900
General factory
MHs
865,080
4,300
4,600
8,900
$1,209,158
The total overhead applied to Product E2 under activity-based costing is closest to:
$671,750
$417,960
$621,110
$725,520
4.
Karsten, Inc., manufactures and sells two products: Product M8 and Product I2. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below:
Expected Production
Direct Labor-Hours Per Unit
Total Direct Labor-Hours
Product M8
700
9.0
6,300
Product I2
300
6.0
1,800
Total direct labor-hours
8,100
The direct labor rate is $21.20 per DLH. The direct materials cost per unit for each product is given below:
Direct Materials Cost per Unit
Product M8
$211.30
Product I2
$242.90
The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity:
Estimated
Expected Activity
Activity Cost Pools
Activity Measures
Overhead Cost
Product M8
Product I2
Total
Labor-related
DLHs
$299,781
6,300
1,800
8,100
Machine setups
setups
46,514
600
700
1,300
General factory
MHs
462,981
4,900
4,800
9,700
$809,276
The unit product cost of Product I2 under activity-based costing is closest to:
$1,133.78 per unit
$1,179.38 per unit
$1,439.33 per unit
$969.56 per unit
5.
Hane Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products:
Activity Cost Pools
Activity Rate
Assembling products
$8.90
per assembly hour
Processing customer orders
$31.23
per customer order
Setting up batches
$43.72
per batch
Data for one of the company’s products follow:
Product U94W
Number of assembly hours
389
Number of customer orders
53
Number of batches
61
How much overhead cost would be assigned to Product U94W using the activity-based costing system?
$42,176.55
$83.85
$7,784.21
$2,666.92
6.
Schoeninger, Inc., manufactures and sells two products: Product X1 and Product I6. The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity:
Estimated
Expected Activity
Activity Cost Pools
Activity Measures
Overhead Cost
Product X1
Product I6
Total
Labor-related
DLHs
$293,231
700
9,000
9,700
Machine setups
setups
74,767
600
500
1,100
General factory
MHs
268,830
4,300
4,400
8,700
$636,828
The activity rate for the General Factory activity cost pool under activity-based costing is closest to:
$30.90 per MH
$32.58 per MH
$65.65 per MH
$32.66 per MH
7.
Olide, Inc., manufactures and sells two products: Product B9 and Product C8. The annual production and sales of Product of B9 is 300 units and of Product C8 is 100 units. The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity:
Estimated
Expected Activity
Activity Cost Pools
Activity Measures
Overhead
Cost
Product B9
Product C8
Total
Labor-related
DLHs
$67,966
2,400
1,000
3,400
Production orders
orders
13,874
300
400
700
General factory
MHs
283,911
5,000
5,100
10,100
$365,751
The overhead applied to each unit of Product B9 under activity-based costing is closest to:
$860.56 per unit
$468.50 per unit
$648.24 per unit
$914.38 per unit
8.
Olide, Inc., manufactures and sells two products: Product B9 and Product C8. The annual production and sales of Product of B9 is 300 units and of Product C8 is 100 units. The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity:
Estimated
Expected Activity
Activity Cost Pools
Activity Measures
Overhead Cost
Product B9
Product C8
Total
Labor-related
DLHs
$67,966
2,400
1,000
3,400
Production orders
orders
13,874
300
400
700
General factory
MHs
283,911
5,000
5,100
10,100
$365,751
The overhead applied to each unit of Product C8 under activity-based costing is closest to:
$1,433.61 per unit
$1,712.79 per unit
$1,075.70 per unit
$914.38 per unit
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