Red Castle's managers have decided to revise their current assignment of overhead costs to reflect the following ABC cost information: Activity Supervision Inspection Activity cost P100,920 124,000 Activity-cost driver Direct labor hours (DLH) Inspections Activities demanded T-shirts 0.75 DLHrs/unit 45,000 DLHrs 60,000 inspection Sweatshirts 1.2 DLHrs/unit 42,000 DLHrs 17,500 inspections Page 2 of 6 7. Under the revised ABC system, the activity-cost driver rate for the supervision activity is a. P2.58 b. P2.40 c. P2.24 d. P1.16 8. Under the revised ABC system, supervision costs allocated to Sweatshirts will be a. P48,720 b. P100,800 c. P100,920 d. None of these 9. Under the revised ABC system, total overhead costs allocated to Sweatshirts will be c. P224,920 b. P76,720 a. P48,720 d. None of these 10. Under the revised ABC system, overhead costs per unit for the Sweatshirts will be a. P1.29 per unit b. P1.60 per unit c. P2.19 per unit d. P2.47 per unit 11. Using an ABC system, next year's estimates show manufacturing overhead costs will total P228,300 for 52,000 T-shirts. If all other T-shirt costs and sales prices remain the same, the profitability that can be expected is a. P5.41 per t-shirt b. P4.39 per t-shirt c. P1.11 per t-shirt d. PO.81 per t-shirt
Red Castle's managers have decided to revise their current assignment of overhead costs to reflect the following ABC cost information: Activity Supervision Inspection Activity cost P100,920 124,000 Activity-cost driver Direct labor hours (DLH) Inspections Activities demanded T-shirts 0.75 DLHrs/unit 45,000 DLHrs 60,000 inspection Sweatshirts 1.2 DLHrs/unit 42,000 DLHrs 17,500 inspections Page 2 of 6 7. Under the revised ABC system, the activity-cost driver rate for the supervision activity is a. P2.58 b. P2.40 c. P2.24 d. P1.16 8. Under the revised ABC system, supervision costs allocated to Sweatshirts will be a. P48,720 b. P100,800 c. P100,920 d. None of these 9. Under the revised ABC system, total overhead costs allocated to Sweatshirts will be c. P224,920 b. P76,720 a. P48,720 d. None of these 10. Under the revised ABC system, overhead costs per unit for the Sweatshirts will be a. P1.29 per unit b. P1.60 per unit c. P2.19 per unit d. P2.47 per unit 11. Using an ABC system, next year's estimates show manufacturing overhead costs will total P228,300 for 52,000 T-shirts. If all other T-shirt costs and sales prices remain the same, the profitability that can be expected is a. P5.41 per t-shirt b. P4.39 per t-shirt c. P1.11 per t-shirt d. PO.81 per t-shirt
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter4: Activity-based Costing
Section: Chapter Questions
Problem 30P: Primera Company produces two products and uses a predetermined overhead rate to apply overhead....
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Transcribed Image Text:Red Castle's managers have decided to revise their current assignment of overhead costs to reflect the
following ABC cost information:
Activity
Supervision
Inspection
Activity cost
P100,920
124,000
Activity-cost driver
Direct labor hours (DLH)
Inspections
Activities demanded
T-shirts
0.75 DLHrs/unit
45,000 DLHrs
60,000 inspection
Sweatshirts
1.2 DLHPS/unit
42,000 DLHPS
17,500 inspections
Page 2 of 6
7. Under the revised ABC system, the activity-cost driver rate for the supervision activity is
a. P2.58
b. P2.40
c. P2.24
d. P1.16
8. Under the revised ABC system, supervision costs allocated to Sweatshirts will be
a. P48,720
b. P100,800
c. P100,920
d. None of these
9. Under the revised ABC system, total overhead costs allocated to Sweatshirts will be
c. P224,920
b. P76,720
a. P48,720
d. None of these
10. Under the revised ABC system, overhead costs per unit for the Sweatshirts will be
a. P1.29 per unit
b. P1.60 per unit
c. P2.19 per unit
d. P2.47 per unit
11. Using an ABC system, next year's estimates show manufacturing overhead costs will total P228,300 for
52,000 T-shirts. If all other T-shirt costs and sales prices remain the same, the profitability that can be
expected is
a. P5.41 per t-shirt
b. P4.39 per t-shirt
c. P1.11 per t-shirt
d. PO.81 per t-shirt
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