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Practice Quiz
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1
All of the following are examples of batch-level activities except:
A)Purchase order processing.
B)Setting up equipment.
C)The 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
Melka 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:
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The activity rate under the activity-based costing system for Activity 3 is closest to:
A)$4.00.
B)$8.59.
C)$18.00.
D)$20.00.
4
Mendez Company has two products: A and B. 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:
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The annual production and sales level of Product A is 9,094 units. The annual production and sales level of Product B 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.
5
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:
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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.
6
Logan 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:
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Actual activity for the current year was as follows:
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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.
7
Martens 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:
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Actual costs and activities for the current year were as follows:
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The total amount of the debits to the Manufacturing Overhead account during the year was closest to:
A)$248,508.
B)$248,988.
C)$251,110.
D)$250,334
8
Larwill 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.
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Actual costs and activities for the current year were as follows:
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The total amount of the credits to the Manufacturing Overhead account 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:
A)Shift costs from low-volume to high-volume products.
B)Shift costs from high-volume to low-volume products.
C)Shift costs from standardized to specialized products.
D)Shift costs from specialized to standardized products.





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