Choose the best answer for each of the following questions.

1.			All of the following are examples of batch-level activities except:
			A)	Purchase order processing.
			B)	Setting up equipment.
			C)	Clerical activity associated with processing purchase orders to produce an order for a standard product.
			D)	Worker recreational facilities.
2.			All of the following are examples of product-level activities except:
			A)	Human resource management.
			B)	Advertising a product.
			C)	Testing a prototype of a new product.
			D)	Parts administration.
3.			McMahon Company uses activity-based costing to determine the costs of its two products: A and B. The estimated total cost and expected activity for each of the company's three activity cost pools are as follows: Activity Cost Pool Estimated Cost Expected Activity     Product A Product B Total Activity 1 $14,000 400 300 700 Activity 2 $16,000 2,200 1,800 4,000 Activity 3 $19,800 800 300 1,100 The activity rate under the activity-based costing system for Activity 1 is closest to:
			A)	$4.00.
			B)	$8.59.
			C)	$18.00.
			D)	$20.00.
4.			Carothers 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 Cost Expected Activity Activity 1 $20,000 2,000 Activity 2 $36,000 1,800 Activity 3 $40,000 2,500 Actual activity for the current year was as follows:   Actual Activity Activity 1 2,005 Activity 2 1,815 Activity 3 2,490 The amount of overhead applied for Activity 3 during the year was closest to:
			A)	$36,300.
			B)	$39,840.
			C)	$40,000.
			D)	$96,190.
5.			Elgin Company has two products: X and Y. 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: Activity Cost Pool Estimated Overhead Cost Expected Activity     Product X Product Y Total #1 $  29,200 1,000 500 1,500 #2 $  40,000 200 800 1,000 #3 $180,000 600 5,400 6,000 The annual production and sales level of Product X is 9,094 units. The annual production and sales level of Product Y is 15,826. The activity rate under the activity-based costing system for Activity 3 is closest to:
			A)	$29.32.
			B)	$30.00.
			C)	$33.33.
			D)	$41.53.
6.			Elgin Company has two products: X and Y. 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: Activity Cost Pool Estimated Overhead Cost Expected Activity     Product X Product Y Total #1 $  29,200 1,000 500 1,500 #2 $  40,000 200 800 1,000 #3 $180,000 600 5,400 6,000 The annual production and sales level of Product X is 9,094 units. The annual production and sales level of Product Y is 15,826. (Note that this is the same information as provided for the previous question.) The overhead cost per unit of Product X under activity-based costing is closest to:
			A)	$1.83.
			B)	$1.98.
			C)	$5.00.
			D)	$10.00.
7.			Kendall 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 Cost Expected Activity Activity 1 $  60,048 4,800 Activity 2 $  58,656 2,400 Activity 3 $130,324 4,400 Actual costs and activities for the current year were as follows:   Actual Overhead Cost Actual Activity Activity 1 $  59,798 4,830 Activity 2 $  58,476 2,370 Activity 3 $130,234 4,450 The total amount of the debits to the Manufacturing Overhead account (hint: refer back to chapter 3, if necessary) during the year was closest to:
			A)	$248,508.
			B)	$248,988.
			C)	$251,110.
			D)	$250,334.
8.			Kendall 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 Cost Expected Activity Activity 1 $  60,048 4,800 Activity 2 $  58,656 2,400 Activity 3 $130,324 4,400 Actual costs and activities for the current year were as follows:   Actual Overhead Cost Actual Activity Activity 1 $  59,798 4,830 Activity 2 $  58,476 2,370 Activity 3 $130,234 4,450 (Note that this is the same information as provided for the previous question.) The total amount of overhead applied during the year was closest to:
			A)	$248,508.
			B)	$248,988.
			C)	$250,155.
			D)	$251,334.
9.			Which of the following statements is (are) true?
			A)	Activity-based costing uses a number of activity cost pools, each of which is allocated to products on the basis of direct labor-hours.
			B)	Activity rates in activity-based costing are computed by dividing costs from the first-stage allocations by the activity measure for each activity cost pool.
			C)	An activity-based costing system is generally easier to implement and maintain than traditional costing system.
			D)	One of the goals of activity-based management is the elimination of waste by allocating costs to products that waste resources.
10.			When there are batch-level or product-level costs, in comparison to a traditional cost system, an activity-based costing system ordinarily will shift costs from:
			A)	High-volume to low-volume products.
			B)	Low-volume to high-volume products.
			C)	Specialized to standardized products.
			D)	Standardized to specialized products.