Question

ivities within a cost pool have a simlar relationship with the cost driver, which 44) of the following could be said about the cost pool? A) the cost pool is considered a homogeneous cost pool B) the cost pool is considered contains only direct variable costs C) the casts accumulated in the cost pool are not used for customer-profitability analysis D) there is a need for need multiple cost drivers to allocate costs from the pool to customers 45) Alfred, owner of Hi-Tech Fiberglass Fabricators, Inc, is interested in using the reciprocal allocation 45) method. The following data from operations were collected for analysis: Budgeted mamfacturing overhead costs: 380,000 $60,000 $210,000 $150,000 Plant Maintenance Data Processing PM (Support Dept) DP (Support Dept) M (Operating Dept) C (Operating Dept) Capping Services furnished: By Plant Maintenance (budgeted labor-hours): to Data Processing to Machining to Capping 3600 5400 8000 By Data Processing (budgeted computer time): 800 4200 600 to Plant Maintenance to Machining to Capping What is the complete reciprocated cost of the Plant Maintenance Department? (Do not round any intermediary calculations.) D) $404,957 C) $400,693 B) $411,143 A) $440,000 46) A company produces three products from a joint production process: A, B, and C. As a percentage 46 of total sales value, a represents 50%, B 49.5%, and C .5%, Product C could be considered a B) primary product D) byproduct A) waste product C) main product 47 47) Which of the following is true regarding estimates of completion of units in a process costing system? A) estimating the degree of completion with regards to conversion costs is usually easier and more accurate than estimating the degree of completion with regards to direct materlals more accurate than estimating the degree of completion with regards to conversion costs an art B) estimating the degree of completion with regards to direct materials is usually easier and C) estimating the degree of completion with regards to conversion costs is more of a science than D) when degree of completion, the degree of completion with regards to conversion ly a portion similar to the degree of completion with regards to direct materials estimating

Answer 1

44) A. the cost pool is considered homogeneous cost pool

Reason: A homogenous cost pool is where in similar are grouped together to allocate costs based on a single cost driver.

45.

DP = 60,000 + (3,600/17,000) PM
PM = 380,000 + (800/5600) DP
PM = 380,000 + (800/5600) ×[ 60,000 + (3,600/17,000) PM]

PM = 400693.

Option C.

46. D. By product

47. B. Estimating the degree of completion with regards to direct materials is usually easier and more accurate than estimating the degree of completion with regards to conversion costs.