Question 1

Sherman, Inc. manufactures chainsaws that sell for $58. Each chainsaw uses $10 in direct materials and $3 in direct labor per unit. Sherman has two activities: Machining, which is applied at the rate of $2 per machine hour, and Finishing, which is applied at the rate of $20 per batch. This month, Sherman made 200 chainsaws, using 1,000 machine hours in 40 batches. What is the total manufacturing cost for one chainsaw?

Accepted Answer

A)   $13
B)   $14
C)   $27
D)   $30E) A) and D)
F) A) and C)

Question 2

A volume-based allocation measure would vary proportionately with:

Accepted Answer

A)   the number of activities.
B)   nonmanufacturing costs.
C)   the number of units produced.
D)   the number of cost drivers.E) None of the above
F) B) and C)

Question 3

When forming activity cost pools, the goal is to create as few cost pools as possible, while still capturing major activities

Accepted Answer

A) True 
 B)False

Question 4

Jackson, Inc. produces two different products (Product 5 and Product Z)  using two different activities: Machining, which uses machine hours as an activity driver, and Inspection, which uses number of batches as an activity driver. The cost of Machining is $500,000, while the cost of Inspection is $30,000. Product 5 uses 20% of total machine hours and 75% of total batches. What is the total Machining cost assigned to Product 5?

Accepted Answer

A)   $7,500
B)   $22,500
C)   $100,000
D)   $375,000E) B) and D)
F) None of the above

Question 5

A large company that uses activity based costing would do which of the following?

Accepted Answer

A)   Use a volume-based cost driver for each activity.
B)   Form a cost pool for each activity performed by the company.
C)   Use a single cost pool.
D)   Group activities together to simplify the number of activities.E) A) and B)
F) A) and C)

Exam 4: Activity-Based Cost Management

Correct Answer
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A volume-based allocation measure would vary proportionately with:

Correct Answer
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A large company that uses activity based costing would do which of the following?

Correct Answer
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When forming activity cost pools, the goal is to create as few cost pools as possible, while still capturing major activities

Correct Answer
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Correct Answer
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Exam 4: Activity-Based Cost Management

Correct AnswerverifiedShow Answer

A volume-based allocation measure would vary proportionately with:

Correct AnswerverifiedShow Answer

A large company that uses activity based costing would do which of the following?

Correct AnswerverifiedShow Answer

When forming activity cost pools, the goal is to create as few cost pools as possible, while still capturing major activities

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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