ACC 406 Chapter Notes - Chapter 7: Cost Driver, Decal, Special Forces
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Select a letter A through D that corresponds to the description of that term. Some letters are used more than once. |
A. | Uses more than one rate to allocate overhead costs to products. |
B. | Uses only volume-based measures such as direct labor hours to allocate overhead costs to products. |
C. | Typically uses the most overhead allocation rates. |
D. | Focuses on the costs of carrying out activities. |
Term | ||
1. | Activity-based costing | |
2. | Plantwide overhead rate method | |
3. | Departmental overhead rate method |
Deemer Corporation has an activity-based costing system withthree activity cost pools--Processing, Supervising, and Other. Inthe first stage allocations, costs in the two overhead accounts,equipment expense and indirect labor, are allocated to the threeactivity cost pools based on resource consumption. Data used in thefirst stage allocations follow:
Overhead costs: | |||||||
Equipment expense | $ | 107,000 | |||||
Indirect labor | $ | 12,300 | |||||
Distribution of Resource Consumption Across Activity CostPools:
Activity Cost Pools | |||||
Processing | Supervising | Other | |||
Equipment expense | 0.30 | 0.50 | 0.20 | ||
Indirect labor | 0.30 | 0.40 | 0.30 | ||
Processing costs are assigned to products using machine-hours(MHs) and Supervising costs are assigned to products using thenumber of batches. The costs in the Other activity cost pool arenot assigned to products. Activity data for the company's twoproducts follow:
Activity:
MHs(Processing) | Batches(Supervising) | |
Product F6 | 13,600 | 780 |
Product X0 | 1,670 | 590 |
Total | 15,270 | 1,370 |
What is the overhead cost assigned to Product X0 underactivity-based costing?
Multiple Choice
$3,907.80
$29,065.00
$25,157.60
$39,043.00