Question 1

Refer to StrongLive Company.
 A. Calculate the activity rate for machining.
B. Calculate the activity rate for engineering.
C. Calculate the activity rate for packing.

Accepted Answer

The answer of Refer to StrongLive Company.
 A. Calculate the...

Question 2

Refer to Netplay Company.
 A. What is the plantwide overhead rate based on machine hours?
B. Assuming a plantwide overhead rate, what is the unit cost of the basic model?
C. Assuming a plantwide overhead rate, what is the unit cost of the premium model?

Accepted Answer

The answer of Refer to Netplay Company.
 A. What is...

Question 3

Consider the following information on activities:
  A. Which of the three activities, if any, is value-added?
B. What is the non-value-added cost of each activity?
C. What is the total value-added cost of the activities?

Accepted Answer

The answer of Consider the following information on activities:
 ...

Question 4

Develop a set of at least five interview questions that could be used in the construction of an activity dictionary.Also explain why you would ask each question; i.e.,what information you hope to acquire and how it would apply to the activity dictionary.

Accepted Answer

The answer of Develop a set of at least five...

Question 5

Indeed Company makes a product using two departments: Department 1 and Department 2.Information on these departments is as follows:

Accepted Answer

The answer of Indeed Company makes a product using two...

Question 6

Refer to First Choice Credit Union.
 A. Calculate the total number of chequing accounts.
B. Calculate the yearly overall cost per chequing account.
C. Calculate the monthly overall cost per chequing account.

Accepted Answer

The answer of Refer to First Choice Credit Union.
 A....

Question 7

Assume that the accounts payable department of a company has 10 clerks; each one is paid $25,000 per year ($250,000 total clerical salaries).Six of the clerks spend the following percentages of time on the three activities:
20% of time on processing payments
30% of time matching invoices,receiving documents,and billing statement
50% of time correcting errors in the various documents
One clerk,the head clerk,spends 50% of her time on administrative duties and the remainder on error correction.The remaining three clerks spend 30% of their time on processing payments and the remaining 70% of their time on matching documents.
Long distance telephone costs of $1,700 are directly traced to the activity "correcting errors."

Accepted Answer

The answer of Assume that the accounts payable department of...

Question 8

Gleen Company has a JIT system in place.Each manufacturing cell is dedicated to the production of a single product or major subassembly.One cell,dedicated to the production of guitar pickups,has four operations: machining,finishing,assembly,and qualifying (testing).
For the coming year,the pickup cell has the following budgeted costs and cell time (both at theoretical capacity):
During the year,the following actual results were obtained:
   A. Compute the theoretical velocity for the cell per hour.
B. Compute the theoretical cycle time in minutes.
C. Compute the actual velocity for the cell per hour.
D. Compute the actual cycle time in minutes.

Accepted Answer

The answer of Gleen Company has a JIT system in...

Question 9

Refer to Netplay Company.
 A. What is the activity rate for maintaining equipment based on maintenance hours?
B. What is the activity rate for setting up equipment based on number of setups?
C. What is the activity rate for purchasing materials based on number of requisitions?
D. What is the unit cost of the basic model (rounded to the nearest cent)?
E. What is the unit cost of the premium model (rounded to the nearest cent)?

Accepted Answer

The answer of Refer to Netplay Company.
 A. What is...

Question 10

Randy Candy Company produces candy sticks (hooked and straight).Both products pass through two producing departments.The hooked stick's production is much more labour-intensive than the straight stick.The straight stick is also more popular.The following data have been gathered for the two products:
Total overhead costs equal $400,000.Randy Candy applies overhead based on direct labour hours.

Accepted Answer

The answer of Randy Candy Company produces candy sticks (hooked...

Question 11

Match each item with the correct statement below.
-Activities that are performed each time a unit is produced

Accepted Answer

Unit-level activities are activities that are performed each time a unit is produced, such as assembly, testing, and packaging.

Question 12

Refer to First Choice Credit Union.First Choice Credit Union uses an activity-based costing system.The activity rate for opening and closing statements is based on the number of accounts opened and closed.The activity rate for issuing monthly statements is based on the number of statements issued.The activity rate for processing transactions is based on the number of transactions processed.The activity rate for customer inquiries is based on the number of telephone minutes.The rate for ATM services is based on the number of ATM transactions.

Accepted Answer

The answer of Refer to First Choice Credit Union.First Choice...

Question 13

A company has developed a list of quality-related costs as follows:
The company's controller is pleased with the Year 2 results and commented that the company is now on its way toward total quality.Is the controller right? Explain.

Accepted Answer

The answer of A company has developed a list of...

Question 14

Lindsay Company uses activity-based costing to figure product cost.Three activities have been determined and rate calculated.
Lindsay provided the following data from the job order cost sheet for Job #550.
 $\begin{array}{ll}
\text { Setting up equipment } & =\$ 500 \text { per setup } \
\text { Moving goods } & =\$ 20 \text { per move } \
\text { Machining } & =\$ 4 \text { per machine hour }
\end{array}$ $$\begin{array} { l r } 
\text { Direct materials } & \$ 2,000 \
\text { Direct labour } & 1,800 \
\text { Setups } & 1 \
\text { Moves } & 30 \
\text { Machine hours } & 900
\end{array}$$

Accepted Answer

The answer of Lindsay Company uses activity-based costing to figure...

Question 15

Blackie Manufacturing Company uses activity-based costing.The overhead budget for the coming period is $1,053,000,consisting of the following:
The potential allocation bases and their estimated amounts were as follows:

Accepted Answer

The answer of Blackie Manufacturing Company uses activity-based costing.The overhead...

Question 16

A company was evaluating the activity-based environmental cost of two different products: Product ABC and Product XYZ.Information on two environmental activities is as follows:
Data on Product X and Product Y follows:
   A. Assign the environmental activity costs to Product $\mathrm { ABC }$ and to Product $X Y Z$.
B. Calculate the unit environmental cost of Froduct $A B C$.
C. Calculate the unit environmental cost of Froduct XYZ.
D. Calculate the overall unit cost of Product $\mathrm { ABC }$.
E. Calculate the overall unit cost of Product XYZ.

Accepted Answer

The answer of A company was evaluating the activity-based environmental...

Question 17

Refer to StrongLive Company.StrongLive Company uses activity-based costing to calculate product costs.
 A. Calculate the per unit product cost for a Hybrid bike.
B. Calculate the per unit product cost for a Road bike.
Assume StrongLive Company adds $43 \%$ to the cost of a Hybrid bike and $38 \%$ to the cost
C. of a Road bike obtain the selling prices. Calculate the selling prices for a Hybrid bike and a Road bike.

Accepted Answer

The answer of Refer to StrongLive Company.StrongLive Company uses activity-based...

Question 18

Assume that the accounts payable department of a company has five clerks; each one is paid $25,000 per year ($125,000 total clerical salaries).On average,the clerks spend:
20% of time on processing payments
30% of time matching invoices,receiving documents,and billing statement
50% of time correcting errors in the various documents
In addition,long distance telephone costs of $1,700 are directly traced to the activity "correcting errors."
 A. Assign the clerical sal ary cost to each of the three activities.
B. What is the total cost of the "correcting errors" activity?

Accepted Answer

The answer of Assume that the accounts payable department of...

Question 19

SarahLou Company had sales of $2,500,000 for last year.Data on quality-related costs for last year are as follows:
 $$\begin{array} { l r } 
\text { Inspection } & \$ 80,000 \
\text { Scrap } & 10,000 \
\text { Rework } & 45,000 \
\text { Quality training } & 20,000 \
\text { Warranty work } & 100,000 \
\text { Customer complaints } & 30,000
\end{array}$$ A. Classify each of the quality-rel ated costs as control (prevention and appraisal), internal
failure, or external failure.
B. What percentage of sales is accounted for by quality-related costs?
C. If quality-related costs could be reduced to $2 \%$ of sales, by how much would SarahLou's profit increase?

Accepted Answer

The answer of SarahLou Company had sales of $2,500,000 for...

Question 20

Lauren's Volleyball Company produces two types of volleyballs: Volleylite and Official Game.Both products pass through two producing departments.The Official Game production is much more labour-intensive than the Volleylite.The Volleylite is also more popular.The following data have been gathered for the two products:
Lauren's Volleyball has decided to used activity-based costing and has developed two types of activities,machine related (based on machine hours),and other overhead (based on packing orders).Machine-related costs equal $160,000.Other overhead costs equal $240,000.

Accepted Answer

The answer of Lauren's Volleyball Company produces two types of...

Quiz 7: Activity-Based Costing and Management

Refer to StrongLive Company. A. Calculate the activity rate for machining. B. Calculate the activity rate for engineering. C. Calculate the activity rate for packing.

Refer to Netplay Company. A. What is the plantwide overhead rate based on machine hours? B. Assuming a plantwide overhead rate, what is the unit cost of the basic model? C. Assuming a plantwide overhead rate, what is the unit cost of the premium model?

Consider the following information on activities: A. Which of the three activities, if any, is value-added? B. What is the non-value-added cost of each activity? C. What is the total value-added cost of the activities?

Develop a set of at least five interview questions that could be used in the construction of an activity dictionary.Also explain why you would ask each question; i.e.,what information you hope to acquire and how it would apply to the activity dictionary.

Indeed Company makes a product using two departments: Department 1 and Department 2.Information on these departments is as follows:

Refer to First Choice Credit Union. A. Calculate the total number of chequing accounts. B. Calculate the yearly overall cost per chequing account. C. Calculate the monthly overall cost per chequing account.

Match each item with the correct statement below. -Activities that are performed each time a unit is produced

A company has developed a list of quality-related costs as follows: The company's controller is pleased with the Year 2 results and commented that the company is now on its way toward total quality.Is the controller right? Explain.

Blackie Manufacturing Company uses activity-based costing.The overhead budget for the coming period is $1,053,000,consisting of the following: The potential allocation bases and their estimated amounts were as follows: