ACCT Module 7 – Flashcards

Panamint Systems Corporation is estimating activity costs associated with producing disk drives, tapes drives, and wire drives. The indirect labor can be traced to four separate activity pools. The budgeted activity cost and activity base data by product are provided below. Activity Cost Activity Base Procurement $370,000 # of purchase orders Scheduling 250,000 # of production orders Materials handling 500,000 # of moves Product development 730,000 # of engineering changes Production 1,500,000 Machine hours ​ Number of Purchase Orders Number of Production Orders ​Number of Moves ​Number of Engineering Changes ​Machine Hours ​Number of Units Disk drives 4,000 300 1,400 10 2,000 2,000 Tape drives 4,000 150 800 10 8,000 4,000 Wire drives 12,000 800 4,000 25 10,000 2,500 Determine the activity-based cost for each disk drive unit.

Shubelik Company is changing to an activity-based costing method. They have determined that they will use three cost pools: setups, inspections, and assembly. Which of the following would not be used as the activity base for any of these three activities?

Blue Ridge Marketing Inc. manufactures two products, A and B. Presently, the company uses a single plantwide factory overhead rate for allocating overhead to products. However, management is considering moving to a multiple department rate system for allocating overhead. The following table presents information about estimated overhead and direct labor hours. ​ Overhead Direct LaborHours (dlh) Product A B Painting Dept. $248,000 10,000 dlh 16 dlh 4 dlh Finishing Dept $72,000. 10,000 4 16 Totals $320,000. 20,000 dlh 20 dlh 20 dlh ​ Determine the overhead in the Painting Department for each unit of Product B if Blue Ridge Marketing Inc. uses a multiple department rate system.

The Beauty Beyond Words Salon uses an activity-based costing system in its beauty salon to determine the cost of services. The salon has determined the costs of services by activity as follows: Activity Activity Rate Hair washing $4.00 Conditioning $3.50 Chemical treatment $25.00 Styling $10.00 Hair WashingConditioningChemical Treatment Styling Haircut 1 1 0 0 Complete style 1 1 0 1 Perm 2 3 1 1 Highlights 3 4 2 1 ​ Calculate the cost of services for a haircut.

Blue Ridge Marketing Inc. manufactures two products, A and B. Presently, the company uses a single plantwide factory overhead rate for allocating overhead to products. However, management is considering moving to a multiple department rate system for allocating overhead. The following table presents information about estimated overhead and direct labor hours. ​ Overhead Direct Labor Hours (dlh). Product A B Painting Dept. $248,000 10,000 dlh 16 dlh 4 dlh Finishing Dept. 72,000. 10,000 4 16 Totals $320,000 20,000 dlh 20 dlh 20 dlh ​ Determine the overhead from both production departments allocated to each unit of Product A if Blue Ridge Marketing Inc. uses a multiple department rate system.

The Botosan Factory has determined that its budgeted factory overhead budget for the year is $13,500,000 and budgeted direct labor hours are 10,000,000. If the actual direct labor hours for the period are 350,000, how much overhead would be allocated to the period?

The Roget Factory has determined that its budgeted factory overhead budget for the year is $15,500,000. They plan to produce 2,000,000 units. Budgeted direct labor hours are 1,050,000 and budgeted machine hours are 750,000. Using the single plantwide factory overhead rate based on direct labor hours, calculate the factory overhead rate for the year.

Everest Co. uses a plantwide factory overhead rate based on direct labor hours. Overhead costs would be overcharged to which of the following departments?

Blackwelder Factory produces two similar products - small lamps and desk lamps. The total plant overhead budget is $640,000 with 400,000 estimated direct labor hours. It is further estimated that small lamp production will require 275,000 direct labor hours and desk lamp production will need 125,000 direct labor hours. Using the single plantwide factory overhead rate with an allocation base of direct labor hours, how much factory overhead will Blackwelder Factory allocate to desk lamp production if actual direct hours for the period is 118,000?

All of the following can be used as an allocation base for calculating factory overhead rates except:

Which of the following is not a factory overhead allocation method?