devry acct344 week 3 and week 5 quiz

1. Question : (TCO 8) A predetermined overhead rate is calculated using which formula?

Actual annual overhead / budgeted annual driver level

Budgeted annual overhead / budgeted annual driver level

Budgeted annual overhead / actual annual driver level

Actual annual overhead / actual annual driver level

2. Question : (TCO 8) All of the following are unit-based activity drivers EXCEPT

number of setups.

machine hours.

number of units.

direct labor hours.

3. Question : (TCO 8) A department that is capital intensive most likely would use a predetermined departmental overhead rate based on which activity base?

Units of direct material used

Direct labor hours

Direct labor cost

Machine hours

4. Question : (TCO 8) Star Inc. uses a job-order costing system to account for product costs.

The following information was provided for the current year.

Materials placed in production $160,000

Indirect labor $50,000

Direct labor (10,000 hours) $180,000

Depreciation of factory building $80,000

Other factory overhead $130,000

Increase in work-in-process inventory $45,000

Factory overhead rate per direct labor hour $25

Which is the amount of under- or overapplied overhead for Star Inc.?

$50,000 overapplied

$10,000 overapplied

$50,000 underapplied

$10,000 underapplied

5. Question : (TCO 8) Acme Company manufactures two products (anvils and barrels).

Overhead costs ($84,000) have been divided into three cost pools, which use the following activity drivers.

Product # of Setups Machine Hours Packing Orders

Anvils 10 500 75

Barrels 10 2,000 175

Cost per Pool $10,000 $60,000 $18,750

What is the allocation rate for barrels per machine hours using activity-based costing?

$60,000

$24

$1,429

$30

6. Question : (TCO 8) Which is NOT a limitation of a plantwide overhead rate?

Product diversity may consume overhead activities under differing consumption ratios.

Overhead usage is not strictly linked to the units produced because some products are more complex and diverse than others.

Predetermined rates using budgeted overhead are usually the best estimate of the amount of overhead.

Overhead costs tend to be underallocated to highly complex products.

:

7. Question : (TCO 8) The resources consumed by the activity in producing its output are called

value-added activities.

activity outputs.

driver analyses.

activity inputs.

8. Question : (TCO 8) Which is NOT part of the cost dimension of the activity-based management model?

Resources

Driver analysis

Activities

Cost objects

9. Question : (TCO 8) Which is an example of a non-value-added manufacturing activity?

Assembly

Scheduling

Finishing

All of the above

10. Question : (TCO 8) The process that involves choosing among various sets of activities that are caused by competing strategies is called

activity sharing.

activity selection.

activity elimination.

activity reduction.

week 5

1. Question : (TCO 7) A common cost occurs

when only one product or service is benefited.

when different resources are used to produce one output.

when the same resource is used in the output of two or more outputs.

when a resource is used by two or more companies.

2. Question : (TCO 7) Which would be the most appropriate base for allocating the costs of the housekeeping department?

Machine hours

Direct labor hours

Square feet

Number of employees

3. Question : (TCO 7) The Ruling Company assigns plant administration costs to the production departments based on the

number of employees. Which would NOT be a good combination of common costs with an activity driver?

Personnel department costs based on number of employees

Purchasing department costs based on machine hours

Cafeteria costs based on meals served

Warehouse costs based on the value of materials stored

4. Question : (TCO 7) Joint costs are allocated because of

financial reporting requirements.

tax reporting requirements.

IMA requirements.

Both A and B

5. Question : (TCO 7) Which method allocates support department costs?

Direct allocation method

Reciprocal allocation method

Sequential allocation method

All of the above

6. Question : (TCO 7) Joint costs are

separable.

allocated on the basis of cause-and-effect relationships.

allocated arbitrarily.

All of the above

7. Question : (TCO 7) Which method allocates joint production costs based on the pounds of product produced?

Sales-value-at-split-off method

Physical units method

Constant gross margin percentage method

Replacement cost method

8. Question : (TCO 7) DeeDee Corporation manufactures the following products in its factory. $400,000 of costs were incurred.

Product Units Produced Weight per Unit (lb) Selling Price per Unit

A 2,500 10 $6

B 5,000 8 $12

C 7,500 6 $12

D 10,000 4 $6

How much joint cost would be allocated to Product A based on the physical units method?

$40,000

$460,000

$66,667

$400,000

9. Question : (TCO 7) Sally Corporation manufactures four products. The following data were provided by the cost accountant for the current year.

Product Units Produced Sales Value at Split-Off

J 15,000 $10,000

K 9,000 $5,000

L 24,000 $6,000

M 12,000 $9,000

Total Joint Processing Costs $24,000

Which is the amount of joint costs assigned to Product L using the sales-value-at-split-off method?

$9,600

$24,000

$1,600

$4,800

10. Question : (TCO 7) Lamb Inc. processes wool into four grades of yarn as follows.

Product Yards Produced Sales Value at Split-Off

Merino Wool 75,000 $56,250

Wool Singles 200,000 $180,000

Superwash Wool 100,000 $105,000

Plied Wool 125,000 $127,500

Total Joint Processing Costs $300,000

Which is the amount of joint costs assigned to Superwash Wool using the constant gross margin percentage method?

$300,000

$67,200

$37,800

$192,000