:Activity-based costing .uses cost pool that collects costs related to the same activity .a O .provides the same results as the departmental overhead costing .b O .uses departments overhead rate to assign overhead .c O .typically applies overhead costs using direct labor-hours .d O .None of the given answer .e O

:Activity-based costing .uses cost pool that collects costs related to the same activity .a O .provides the same results as the departmental overhead costing .b O .uses departments overhead rate to assign overhead .c O .typically applies overhead costs using direct labor-hours .d O .None of the given answer .e O

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Description: :Activity-based costing.uses cost pool that collects costs related to the same activity .a O.provides the same results as the departmental overhead costing .b O.uses departments overhead rate to assign overhead.c O.typically applies overhead costs u

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter4: Job Order Costing

Section: Chapter Questions

Problem 10MC: Assigning indirect costs to specific jobs is completed by which of the following? applying the costs...

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Carltons Kitchens three cost pools and overhead estimates are as follows: Compare the overhead allocation using: A. The traditional allocation method B. The activity-based costing method (Hint: the traditional method uses machine hours as the allocation base.)
A company has traditionally allocated its overhead based on machine hours but had collected this information to change to activity-based costing: A. How much overhead would be allocated to each unit under the traditional allocation method? B. How much overhead would be allocated to each unit under activity-based costing?
Which is not a task typically associated with ABC systems? A. calculating the overhead application rate for each cost pool B. applying a single cost rate C. identifying a cost driver D. more correctly allocating overhead costs
Which of the following statements is true? a. Job-order costing is used only in manufacturing firms. b. Process costing is used only for services. c. Job-order costing is simpler to use than process costing because the recordkeeping requirements are less. d. The job cost sheet is subsidiary to the work-in-process account. e. All of these.
Assigning indirect costs to departments is completed by __________________________. applying the predetermined overhead rate debiting the manufacturing costs incurred applying the costs to manufacturing overhead applying the costs to work in process inventory
In a normal costing system, the cost of a job includes a. actual direct materials, actual direct labor, and estimated (applied) overhead. b. estimated direct materials, estimated direct labor, and estimated overhead. c. actual direct materials, actual direct labor, actual overhead, and actual selling cost. d. actual direct materials, actual direct labor, and actual overhead. e. None of these. Job-order costing requires the use of actual, not normal, costing.
During production, to what are the costs in job order costing applied? A. manufacturing overhead B. cost of goods sold C. each individual product D. each individual department
Activity-based costing systems: A. use a single predetermined overhead rate based on machine hours instead of on direct labor B. frequently increase the overhead allocation to at least one product while decreasing the overhead allocation to at least one other product C. limit the number of cost pools D. always result in an increase of at least one products selling price
Which is the correct formula for computing the overhead rate? A. estimated use of the cost driver for production/estimated overhead for the activity B. estimated overhead for the product/estimated use of the cost driver for the activity C. estimated use of the cost driver for production/estimated overhead for the activity D. estimated overhead for the activity/estimated use of the cost driver for the activity
Which of the following production characteristics is better suited for process costing and not job order costing? Each product batch is distinguishable from the prior batch. The costs are easily traced to a specific product. Costs are accumulated by department. The value of work in process is the direct material used, the direct labor incurred, and the overhead applied to the job in process.
Frenchys has three cost pools and an associated cost driver to allocate the costs to the product. The cost pools, cost driver, estimated overhead, and estimated activity for the cost pool are: What is the predetermined overhead rate for each activity?
The following items are associated with a traditional cost accounting information system, an activity-based cost accounting information system, or both (that is, some elements are common to the two systems): a. Usage of direct materials b. Direct materials cost assigned to products using direct tracing c. Direct labor cost incurrence d. Direct labor cost assigned to products using direct tracing e. Setup cost incurrence f. Setup cost assigned using number of setups as the activity driver g. Setup cost assigned using direct labor hours as the activity driver h. Cost accounting personnel i. Submission of a bid, using product cost plus 25 percent j. Purchasing cost incurrence k. Purchasing cost assigned to products using direct labor hours as the activity driver l. Purchasing cost assigned to products using number of orders as the activity driver m. Materials handling cost incurrence n. Materials handling cost assigned using the number of moves as the activity driver o. Materials handling cost assigned using direct labor hours as the activity driver p. Computer q. Costing out of products r. Decision to continue making a part rather than buying it s. Printer t. Customer service cost incurred u. Customer service cost assigned to products using number of complaints as the activity driver v. Report detailing individual product costs w. Commission cost x. Commission cost assigned to products using units sold as the activity driver y. Plant depreciation z. Plant depreciation assigned to products using direct labor hours Required: 1. For each cost system, classify the relevant items into one of the following categories: a. Interrelated parts b. Processes c. Objectives d. Inputs e. Outputs f. User actions 2. Explain the choices that differ between the two systems. Which system will provide the best support for the user actions? Explain. 3. Draw an operational model that illustrates each cost accounting systemwith the items that belong to the system used as examples for each component of the model. 4. Based on the operational models, comment on the relative costs and benefits of the two systems. Which system should be chosen?