Homework Answers
The following comment about Activity based cost is incorrect :
B. There are no unallocated costs with ABC.
This statement is incorrect as in Activity based costing there can be some cost which cannot be allocated to any activity.
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Which of the following comments about activity based costing (ABC) is incorrect? The profitability of products...
Which of the following statements about activity-based costing is false? Activity-based costing is most appropriate for...
Which of the following statements about activity-based costing is false? Activity-based costing is most appropriate for a firm that produces similar products that use similar resources. Activity-based costing requires a two-stage allocation of costs. Activity-based costing categorizes costs as unit-level, batch-level, product-level, or organization-sustaining. Activity-based costing can be used for manufacturing, administrative, or selling costs.
Which of the following statements is true of activity-based costing?
Which of the following statements is true of activity-based costing?Multiple ChoiceABC ignores the allocation of marketing costs.ABC classifies some indirect costs as direct costs. products.ABC is more likely to result in big differences from a traditional costing system if the business makes only one product rather than multiple products.Activities are the cost objects of the second stage of ABC.Production costs per tennis racket total $ 38, which consists of $ 25 in variable production costs and $ 13 in fixed...
Which of the following is a likely advantage in activity-based costing (ABC)? An increase in the...
Which of the following is a likely advantage in activity-based costing (ABC)? An increase in the cost of accumulating, tracking, and assigning costs to products and services. An increase in the ability to trace indirect costs to specific activities. A decrease in the need to maintain accurate cost driver information. A decrease in the need to maintain accurate overhead cost information. Which of the following is true regarding activity-based costing (ABC)? Companies with a high proportion of non-unit-level costs should...
Activity Based Costing Case Hi-Tek Manufacturing Inc. makes two types of industrial component parts—the B300 and...
Activity Based Costing Case Hi-Tek Manufacturing Inc. makes two types of industrial component parts—the B300 and the T500. An absorption costing income statement for the most recent period is shown below: Hi-Tek Manufacturing Inc. Income Statement Sales ........ Cost of goods sold ................ Gross margin Selling and administrative expenses ...... Net operating loss ............. $2,100,000 1,600,000 500,000 550,000 $ (50,000) Hi-Tek produced and sold 70,000 units of B300 at a price of $20 per unit and 17,500 units of T500...
True or False: Activity-based costing (ABC) techniques used to evaluate customer profitability can also be applied...
True or False: Activity-based costing (ABC) techniques used to evaluate customer profitability can also be applied to evaluating suppliers. True or False: Quality can be defined as the degree to which a product or service performs as it was designed to do. True or False: The basic concepts involved in activity-based costing (ABC) can be used to determine customer profitability as well as product costs. True or False: Tangible customer expectations include how the product's salespeople treat customers and the...
9. Which of the following statements is true? a. Activity-based costing uses a number of activity...
9. Which of the following statements is true? a. Activity-based costing uses a number of activity cost pools, each of which is allocated to products on the basis of direct labor-hours. b. Activity rates in activity-based costing are computed by dividing costs from the first stage allocations by the activity measure for each activity cost pool. C. An activity-based costing system is generally easier to implement and maintain than traditional costing system. d. One of the goals of activity-based costing...
Alrex company is using an activity-based costing (ABC) system. The company produces and sells two products:...
Alrex company is using an activity-based costing (ABC) system. The company produces and sells two products: Basic and Pro. The company consists of two departments: Production (where all manufacturing activities are taken) and Marketing (which engages in selling and admin activity only). The ABC system includes in unit product costs all costs easily associated with units. In addition, in the ABC system, there are four major indirect activities: Machine Setups, Special Processing, Factory Supervision, and Customer Relation The prices, direct...
Comparing ABC and Plantwide Overhead Cost Assignments Wellington Chocolate Company uses activity-based costing (ABC). The controller...
Comparing ABC and Plantwide Overhead Cost Assignments Wellington Chocolate Company uses activity-based costing (ABC). The controller identified two activities and their budgeted costs: Setting up equipment $230,000 Other overheard $1,240,000 Setting up equipment is based on setup hours, and other overhead is based on oven hours. Wellington produces two products, Fudge and Cookies. Information on each product is as follows: Fudge Cookies Units produced 8,000 445,000 Setup hours 4,000 1,000 Oven hours 1,000 7,000 Required: Round your answers to the...
Comparing ABC and Plantwide Overhead Cost Assignments Wellington Chocolate Company uses activity-based costing (ABC). The controller...
Comparing ABC and Plantwide Overhead Cost Assignments Wellington Chocolate Company uses activity-based costing (ABC). The controller identified two activities and their budgeted costs: Setting up equipment $754,000 Other overheard $2,912,000 Setting up equipment is based on setup hours, and other overhead is based on oven hours. Wellington produces two products, Fudge and Cookies. Information on each product is as follows: Fudge Cookies Units produced 8,000 445,000 Setup hours 10,400 2,600 Oven hours 2,600 18,200 Required: Round your answers to the...
Which of the following measures is not used by activity-based costing (ABC) systems as an allocation...
Which of the following measures is not used by activity-based costing (ABC) systems as an allocation base for allocating overhead costs to the units produced? Multiple Choice C) Volume-related activities Batch-related activities. Product-related activities ooo O Need-related activities.
Which of the following statements is true of activity-based costing?Multiple ChoiceABC ignores the allocation of marketing costs.ABC classifies some indirect costs as direct costs. products.ABC is more likely to result in big differences from a traditional costing system if the business makes only one product rather than multiple products.Activities are the cost objects of the second stage of ABC.Production costs per tennis racket total $ 38, which consists of $ 25 in variable production costs and $ 13 in fixed...
Activity Based Costing Case Hi-Tek Manufacturing Inc. makes two types of industrial component parts—the B300 and the T500. An absorption costing income statement for the most recent period is shown below: Hi-Tek Manufacturing Inc. Income Statement Sales ........ Cost of goods sold ................ Gross margin Selling and administrative expenses ...... Net operating loss ............. $2,100,000 1,600,000 500,000 550,000 $ (50,000) Hi-Tek produced and sold 70,000 units of B300 at a price of $20 per unit and 17,500 units of T500...
9. Which of the following statements is true? a. Activity-based costing uses a number of activity cost pools, each of which is allocated to products on the basis of direct labor-hours. b. Activity rates in activity-based costing are computed by dividing costs from the first stage allocations by the activity measure for each activity cost pool. C. An activity-based costing system is generally easier to implement and maintain than traditional costing system. d. One of the goals of activity-based costing...
Alrex company is using an activity-based costing (ABC) system. The company produces and sells two products: Basic and Pro. The company consists of two departments: Production (where all manufacturing activities are taken) and Marketing (which engages in selling and admin activity only). The ABC system includes in unit product costs all costs easily associated with units. In addition, in the ABC system, there are four major indirect activities: Machine Setups, Special Processing, Factory Supervision, and Customer Relation The prices, direct...
Which of the following measures is not used by activity-based costing (ABC) systems as an allocation base for allocating overhead costs to the units produced? Multiple Choice C) Volume-related activities Batch-related activities. Product-related activities ooo O Need-related activities.
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