Multiple ChoiceOOO$20.46 per batch$10.23 per batch$63.77 per batch$25.16 per batch Deemer Corporation has an activity-based costing system with three activity cost pools--Processing, Supervising, and Other. In the first stage allocations, costs in the two overheadaccounts, equipment expense and indirect labor, are allocated to the three activity cost pools based on resource consumption. Data used in the first stage allocations follow:Overhead costs:Equipment expenseIndirect laborDistribution of Resource Consumption Across Activity Cost Pools:Equipment expenseIndirect laborActivity:$ 123,000$ 7,100Product F6Product X0TotalMHs(Processing)17,4001,33018,730Activity Cost PoolsSupervising0.400.30Processing costs are assigned to products using machine-hours (MHs) and Supervising costs are assigned to products using the number of batches. The costs in the Other activitycost pool are not assigned to products. Activity data for the company's two products follow:Processing0.500.50Other0.100.20Batches(Supervising)7101,3302,040The activity rate for the Supervising activity cost pool under activity-based costing is closest to:

The Activity-Based Costing (ABC) is a cost allocation method that provides a more accurate way to…

Deemer Corporation has an activity-based costing system with three activity cost pools--Processing, Supervising, and Other. In the first stage allocations, costs in the two overhead accounts, equipment expense and indirect labor, are allocated to the three activity cost pools based on resource consumption. Data used in the first stage allocations follow: Overhead costs: Equipment expense Indirect labor $ 123,000 $ 7,100 Distribution of Resource Consumption Across Activity Cost Pools: Equipment expense Indirect labor Product F6 Product X0 Total Activity Cost Pools Supervising 0.40 0.30 MHS (Processing) 17,400 1,330 18,730 Processing 0.50 0.50 Processing costs are assigned to products using machine-hours (MHS) and Supervising costs are assigned to products using the number of batches. The costs in the Other activity cost pool are not assigned to products. Activity data for the company's two products follow: Activity: Other 0.10 0.20 Batches (Supervising) 710 1,330 2,040 The activity rate for the Supervising activity cost pool under activity-based costing is closest to:

Deemer Corporation has an activity-based costing system with three activity cost pools--Processing, Supervising, and Other. In the first stage allocations, costs in the two overhead accounts, equipment expense and indirect labor, are allocated to the three activity cost pools based on resource consumption. Data used in the first stage allocations follow: Overhead costs: Equipment expense Indirect labor $ 123,000 $ 7,100 Distribution of Resource Consumption Across Activity Cost Pools: Equipment expense Indirect labor Product F6 Product X0 Total Activity Cost Pools Supervising 0.40 0.30 MHS (Processing) 17,400 1,330 18,730 Processing 0.50 0.50 Processing costs are assigned to products using machine-hours (MHS) and Supervising costs are assigned to products using the number of batches. The costs in the Other activity cost pool are not assigned to products. Activity data for the company's two products follow: Activity: Other 0.10 0.20 Batches (Supervising) 710 1,330 2,040 The activity rate for the Supervising activity cost pool under activity-based costing is closest to:

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 10MC: What is the proper order of tasks In an ABC system? identify the cost drivers, assign the costs to...

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The following items are associated with a traditional cost accounting information system, an activity-based cost accounting information system, or both (that is, some elements are common to the two systems): a. Usage of direct materials b. Direct materials cost assigned to products using direct tracing c. Direct labor cost incurrence d. Direct labor cost assigned to products using direct tracing e. Setup cost incurrence f. Setup cost assigned using number of setups as the activity driver g. Setup cost assigned using direct labor hours as the activity driver h. Cost accounting personnel i. Submission of a bid, using product cost plus 25 percent j. Purchasing cost incurrence k. Purchasing cost assigned to products using direct labor hours as the activity driver l. Purchasing cost assigned to products using number of orders as the activity driver m. Materials handling cost incurrence n. Materials handling cost assigned using the number of moves as the activity driver o. Materials handling cost assigned using direct labor hours as the activity driver p. Computer q. Costing out of products r. Decision to continue making a part rather than buying it s. Printer t. Customer service cost incurred u. Customer service cost assigned to products using number of complaints as the activity driver v. Report detailing individual product costs w. Commission cost x. Commission cost assigned to products using units sold as the activity driver y. Plant depreciation z. Plant depreciation assigned to products using direct labor hours Required: 1. For each cost system, classify the relevant items into one of the following categories: a. Interrelated parts b. Processes c. Objectives d. Inputs e. Outputs f. User actions 2. Explain the choices that differ between the two systems. Which system will provide the best support for the user actions? Explain. 3. Draw an operational model that illustrates each cost accounting systemwith the items that belong to the system used as examples for each component of the model. 4. Based on the operational models, comment on the relative costs and benefits of the two systems. Which system should be chosen?
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