Homework Answers
C. Significant amounts of indirect costs are allocated using multiple cost pools.
Activity-based costing (ABC) is a method used to apportion overhead costs to products and services. The ABC system of cost accounting is based on activities such as any event, unit of work, or task with a specific goal.
option A is wrong because If the Indirect costs are mostly Batch level, Product sustaining etc, there is no need to apportion the costs to Individual batch or section of products to determine the exact cost
Operation staffs have no role in selecting the costing method, so option B is wrong
If products have similarities in resource's volume, steps and batch size, there is no need to use ABC costing, they can simply apportion the costs based on Volume
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Which of the following is a sign that an ABC system may be useful for an...
amherst metal works ABC systems commonly use a cost hierarchy with four levels to identify cost-allocation...
amherst metal works
ABC systems commonly use a cost hierarchy with four levels to identify cost-allocation bases that are cost drivers of the activity cost pools: (1) Output unit-level costs: the costs of activity performed on each individual unit of a product or service. (2) Batch-level costs: the costs of activities related to a group of units of a product or service. (3) Product-sustaining costs (service-sustaining costs): the costs of activities undertaken to support individual products or services, regardless of...
Roberta, Inc., manufactures elliptical machines for several well-known companies. The machines differ significantly in their complexity...
Roberta, Inc., manufactures elliptical machines for several
well-known companies. The machines differ significantly in their
complexity and their manufacturing batch sizes. The following costs
were incurred in 2017:
Requirement 1. Classify each of the preceding
costs as output unit-level, batch-level, product-sustaining, or
facility-sustaining. Explain each answer (answer options
are in bold on the cost-type row pick one).
Cost Item
Cost Type
a. Indirect manufacturing labor costs such as
supervision that supports direct manufacturing labor,
$935,000
(Batch Level, Facility-sustaining, Output unit-level,...
Holliston Test Laboratories does heat testing (HT) and stress testing (ST) on materials and operates at...
Holliston Test Laboratories does heat testing (HT) and stress testing (ST) on materials and operates at capacity. Under its current simple costing system, Holliston aggregates all operating costs of $1,275,000 into a single overhead cost pool. Holliston calculates a rate per test-hour of $15 ($1,275,000 / 85,000 total test-hours). HT uses 60,000 test-hours, and ST uses 25,000 test-hours. Gary Sarsfield, Holliston's controller, believes that there is enough variation in test procedures and cost structures to establish separate costing and billing...
Select four decisions for which ABC information is useful. A. 1. Identifying problems and uncertainties 2....
Select four decisions for which ABC information is useful. A. 1. Identifying problems and uncertainties 2. Obtaining information 3. Making predictions about the future 4. Choosing among alternatives B. 1. Pricing and product mix 2. Cost reduction and process improvement 3. Product design 4. Decisions for planning and managing activities C. 1. Allocating direct material costs 2. Allocating direct labor costs 3. Identifying direct manufacturing overhead cost pools 4. Identifying indirect manufacturing overhead cost pools D. 1. Product-cost cross subsidization...
Hello, Are you able to provide solution for comparison? Thanks, 1) Installing a new control panel...
Hello, Are you able to provide solution for comparison? Thanks, 1) Installing a new control panel on a factory production machine would be classified in the ABC cost hierarchy as a (an) A. output unit-level cost. B. facility-sustaining cost. C. batch-level cost. D. period cost because it is not related to the cost hierarchy. E. product-sustaining cost. 2) Gregory Enterprises has identified three cost pools to allocate overhead costs. The following estimates are provided for the coming year: Cost Pool...
Which of the following statements about activity-based costing is false? Activity-based costing is most appropriate for...
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Beckley Corporation has provided the following data from its activity-based costing accounting system: Indirect factory wages...
Beckley Corporation has provided the following data from its activity-based costing accounting system: Indirect factory wages Factory equipment depreciation $ 22,000 $199.000 ok Distribution of Resource Consumption across Activity Cost Pools: Tint Customer Orders Product Processing Activity Cost Pools Indirect facetory wages Factory equipment depreciation other Total 44 438 134 14% 100 58V 100 The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs that are not assigned to products. Required: a. Determine the total...
Beckley Corporation has provided the following data from its activity-based costing accounting system: Indirect factory wages...
Beckley Corporation has provided the following data from its activity-based costing accounting system: Indirect factory wages $ 26,000 Factory equipment depreciation $ 203,000 Distribution of Resource Consumption across Activity Cost Pools: Activity Cost Pools Customer Orders Product Processing Other Total Indirect factory wages 48 % 47 % 5 % 100 % Factory equipment depreciation 62 % 24 % 14 % 100 % The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs that are not...
Desilets Corporation has provided the following data from its activity-based costing accounting system: Supervisory wages Factory...
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Lehner Corporation has provided the following data from its activity-based costing accounting system: Indirect factory wages...
Lehner Corporation has provided the following data from its activity-based costing accounting system: Indirect factory wages Factory equipment depreciation $550,000 $273,000 Distribution of Resource Consumption across Activity Cost Pools: Activity Cost Pools Customer Product Orders Processing Other Total 50% 30% 20% 100% Indirect factory wages Factory equipment depreciation 25% 60% 15% 100% The "Other" activity cost pool consists of the costs of idle capacity and organization- sustaining costs that are not assigned to products. How much indirect factory wages and...
amherst metal works
ABC systems commonly use a cost hierarchy with four levels to identify cost-allocation bases that are cost drivers of the activity cost pools: (1) Output unit-level costs: the costs of activity performed on each individual unit of a product or service. (2) Batch-level costs: the costs of activities related to a group of units of a product or service. (3) Product-sustaining costs (service-sustaining costs): the costs of activities undertaken to support individual products or services, regardless of...
Roberta, Inc., manufactures elliptical machines for several
well-known companies. The machines differ significantly in their
complexity and their manufacturing batch sizes. The following costs
were incurred in 2017:
Requirement 1. Classify each of the preceding
costs as output unit-level, batch-level, product-sustaining, or
facility-sustaining. Explain each answer (answer options
are in bold on the cost-type row pick one).
Cost Item
Cost Type
a. Indirect manufacturing labor costs such as
supervision that supports direct manufacturing labor,
$935,000
(Batch Level, Facility-sustaining, Output unit-level,...
Holliston Test Laboratories does heat testing (HT) and stress testing (ST) on materials and operates at capacity. Under its current simple costing system, Holliston aggregates all operating costs of $1,275,000 into a single overhead cost pool. Holliston calculates a rate per test-hour of $15 ($1,275,000 / 85,000 total test-hours). HT uses 60,000 test-hours, and ST uses 25,000 test-hours. Gary Sarsfield, Holliston's controller, believes that there is enough variation in test procedures and cost structures to establish separate costing and billing...
Beckley Corporation has provided the following data from its activity-based costing accounting system: Indirect factory wages Factory equipment depreciation $ 22,000 $199.000 ok Distribution of Resource Consumption across Activity Cost Pools: Tint Customer Orders Product Processing Activity Cost Pools Indirect facetory wages Factory equipment depreciation other Total 44 438 134 14% 100 58V 100 The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs that are not assigned to products. Required: a. Determine the total...
Desilets Corporation has provided the following data from its activity-based costing accounting system: Supervisory wages Factory utilities $ 83,400 $308,000 Distribution of Resource Consumption across Activity Cost Pools: Batch Set- Ups 648 274 Activity Cost Pools Supervisory wages Factory utilities Unit Processing 303 other Total 1008 1008 118 The "Other activity cost pool consists of the costs of idle capacity and organization-sustaining costs that are not assigned to products. Required: a. Determine the total amount of supervisory wages and factory...
Lehner Corporation has provided the following data from its activity-based costing accounting system: Indirect factory wages Factory equipment depreciation $550,000 $273,000 Distribution of Resource Consumption across Activity Cost Pools: Activity Cost Pools Customer Product Orders Processing Other Total 50% 30% 20% 100% Indirect factory wages Factory equipment depreciation 25% 60% 15% 100% The "Other" activity cost pool consists of the costs of idle capacity and organization- sustaining costs that are not assigned to products. How much indirect factory wages and...
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