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1

Richter Company uses activity-based costing to determine the costs of its two products: #1 and #2. The estimated total cost and expected activity for each of the company's three activity cost pools are as follows:

ActivityEstimatedExpected Activity
Cost PoolCostProduct #1Product #2Total
Activity A$37,600 800 3001,100
Activity B$32,0002,2001,8004,000
Activity C$28,000 400 300 700

The activity rate under the activity-based costing system for Activity C is closest to:

A)$34.18.
B)$ 8.00.
C)$40.00.
D)$82.18.
2

O'Leary Company has two products: #1 and #2. The company uses activity-based costing and has prepared the following analysis showing the estimated total cost and expected activity for each of its three activity cost pools:

ActivityEstimated 
CostOverheadExpected Activity
PoolCostProduct #1Product #2Total
Activity A$ 80,000 200 8001,000
Activity B$ 58,4001,000 5001,500
Activity C$360,000 6005,4006,000

The annual production and sales level of Product #1 is 18,188 units. The annual production and sales level of Product #2 is 31,652. The overhead cost per unit of Product #2 under activity-based costing is closest to:

A)$2.02.
B)$5.00.
C)$12.87.
D)$22.40.
3

Kane Company uses activity-based costing to compute product costs for external reports. The company has three activity cost pools and applies overhead using predetermined overhead rates for each activity cost pool. Estimated costs and activities for the current year are presented below for the three activity cost pools:

 Estimated 
 OverheadExpected
 CostActivity
Activity A $117,3122,400
Activity B $120,0964,800
Activity C $260,6484,400

Actual costs and activities for the current year were as follows:

 Actual 
 OverheadActual
 CostActivity
Activity A $116,9522,370
Activity B $119,5964,830
Activity C $260,4684,450

The total debits to the Manufacturing Overhead account during the year were closest to:

A)$488,056.
B)$497,016.
C)$500,668.
D)$502,220.
4

Kane Company uses activity-based costing to compute product costs for external reports. The company has three activity cost pools and applies overhead using predetermined overhead rates for each activity cost pool. Estimated costs and activities for the current year are presented below for the three activity cost pools:

 Estimated Overhead CostExpected Activity
Activity A $117,3122,400
Activity B $120,0964,800
Activity C $260,6484,400

Actual costs and activities for the current year were as follows:

 Actual Overhead CostActual Activity
Activity A $116,9522,370
Activity B $119,5964,830
Activity C $260,4684,450

The total credits to the Manufacturing Overhead account during the year were closest to:

A)$497,016.
B)$497,976.
C)$500,310.
D)$502,668.







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