ACCT 331 Quiz 4

Name:______________________________ Score: / 10 points

1. Multiple Choices.
Please put your final answers in this table. (1pt each, 10pts total)

1 2 3 4 5 6 7 8 9 10
C D D A D D C B A C

1. All of the following statements are correct except:

A. Traditional systems assign manufacturing overhead costs to products using a single factory-wide
predetermined overhead rate.
B. Activity-based costing information is used for decision-making.
C. Activity-based costing can also be used to develop product costs for external financial
reports.
D. Activity-based costing assigns manufacturing overhead costs to products using a predetermined
overhead rate for each activity cost pool.

2. A company that provides photocopying services has an activity-based costing system with three
activity cost pools—making photocopies, serving customers, and setting up machines. The activity rates
are $0.03 per photocopy, $2.25 per customer, and $0.50 per machine-setup. If a customer requires set-
ups on three different machines and makes 250 copies in total, how much cost would be assigned by the
activity-based costing system for this transaction?

A. $2.25
B. $14.80
C. $1.50
D. $11.25
Total activity costs assigned = 0.03*250 + 2.25*1 + 0.5*3 = $11.25

3. Which terms would make the following sentence true? Manufacturing companies that benefit the most
from activity-based costing are those where overhead costs are a _________ percentage of total product
cost and where there is ___________ diversity among the various products that they produce.

A. Low; little
B. Low; considerable
C. High; little
D. High; considerable

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4. In activity-based costing, some manufacturing costs can be excluded from product costs.

A. True
B. False

5. Which of the following levels of costs should not be allocated to products for decision-making
purposes?

A. Unit-level activities.
B. Batch-level activities.
C. Product-level activities.
D. Organization-sustaining activities.

6. Seniff Corporation uses the following activity rates from its activity-based costing to assign overhead
costs to products:

Data concerning two products appear below:

How much overhead cost would be assigned to Product V91Z using the activity-based costing system?

A. $113,774.55
B. $132.45
C. $3,195.50
D. $14,751.04
The overhead cost charged to Product V91Z is:

7. Ravelo Corporation has provided the following data from its activity-based costing system:

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Data concerning the company's product L19B appear below:

According to the activity-based costing system, the average cost of product L19B is closest to:

A. $48.19 per unit

B. $82.31 per unit
C. $85.56 per unit
D. $77.53 per unit
The activity rates for each activity cost pool are computed as follows:

The overhead cost charged to Product K54A is:

Cost per unit = $36,789.50 ÷ 430 units = $85.56 per unit

8. Grammer Corporation uses an activity-based costing system with three activity cost pools. The
company has provided the following data concerning its costs:

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The distribution of resource consumption across the three activity cost pools is given below:

How much cost, in total, would be allocated in the first-stage allocation to the Other activity cost pool?

A. $135,000
B. $174,000
C. $162,000
D. $180,000
Allocations to the Other activity cost pool:

9. Assembling a product is an example of a:

A. Unit-level activity
B. Batch-level activity
C. Product-level activity
D. Organization-sustaining

10. Gaucher Corporation has provided the following data from its activity-based costing accounting
system:

The activity rate for the "designing products" activity cost pool is closest to:

A. $78 per product design hour

B. $582,016 per product design hour
C. $128 per product design hour
D. $128 per product
$582,016/4,547 product design hours = $128 per product design hour