30 May ACC 560 Week 4 Quiz 2 (Chapter 4) NEW
Question 1
Reynoso Corporation manufactures titanium and aluminum tennis racquets. Reynoso’s total overhead costs consist of assembly costs and inspection costs. The following information is available:
Cost Titanium Aluminum Total Cost
Assembly 500 mach. hours 500 mach. hours $60,000
Inspections 350 150 $100,000
2,100 labor hours 1,900 labor hours
Reynoso is considering switching from one overhead rate based on labor hours to activity-based costing.
Using activity-based costing, how much assembly cost is assigned to titanium racquets
Question 2
Boswell Company manufactures two products, Regular and Supreme. Boswell’s overhead costs consist of machining, $3,000,000; and assembling, $1,500,000. Information on the two products is:
Regular Supreme
Direct labor hours 10,000 15,000
Machine hours 10,000 30,000
Number of parts 90,000 160,000
Overhead applied to Regular using activity-based costing is
Question 3
Which best describes the flow of overhead costs in an activity-based costing system?
Question 4
An activity-based overhead rate is computed as follows:
Question 5
Estimated costs for activity cost pools and other item(s) are as follows:
Machining $500,000
Assembling 200,000
Advertising 450,000
Inspecting and testing 175,000
Total estimated overhead is
Question 6
The presence of any of the following factors would suggest a switch to ABC except when
Question 7
Use of activity-based costing will result in the development of
Question 8
An example of an activity cost pool is
Question 9
Direct labor is sometimes the appropriate basis for assigning overhead cost to products. It is appropriate to use direct labor when which of the following is true?
(1) Direct labor constitutes a significant part of total product cost.
(2) A high correlation exists between direct labor and changes in the amount of overhead costs.
Question 10
An activity that has a direct cause-effect relationship with the resources consumed is a(n)
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