0 of 20 Questions completed
You have already completed the quiz before. Hence you can not start it again.
Quiz is loading…
You must sign in or sign up to start the quiz.
You must first complete the following:
0 of 20 Questions answered correctly
Time has elapsed
You have reached 0 of 0 point(s), (0)
Earned Point(s): 0 of 0, (0)
0 Essay(s) Pending (Possible Point(s): 0)
From the options below, select the ONE advantage of ABC (Activity Based Costing).CorrectIncorrect
A company manufactures 2 products, A and B. Both products go through several machine set-ups and a number of quality control checks. The total annual cost of setting up and checking is £1,250,000 and £1,440,000 respectively.
Per unit, product A requires 5 set-up changes and 8 checks. Annual production should be 10,000 units.
Per unit, product B requires 3 set-ups and 4 checks. Annual production should be 25,000 units.
Using Activity Based Costing with appropriate cost drivers, the total cost of setting-up and checking a unit of product B is:CorrectIncorrect
G Plc is considering switching over from traditional costing to an Activity Based costing method.
From the options below, select the scenario which will NOT be an implication of switching over to ABC.CorrectIncorrect
A private hospital has budgeted overheads for the upcoming year of $2,150,000. It uses an ABC system and has identified the following cost pools and associated cost drivers:
Activity/cost pool Cost driver Cost associated with activity Consultant salaries Number of patient appointments $800,000 Diagnostic testing equipment running costs Number of tests performed $600,000 Operating theatre costs Number of operations $750,000
Budgeted details on the three services are provided below:
Number of consultant appointments 5,000 Number of diagnostic tests performed 7,500 Number of operations performed 750
Calculate the amount of overhead attributed to a patient who requires three appointments with their consultant, has one diagnostic scan and requires one operation.CorrectIncorrect
Gallego Inc makes three products and uses an activity based costing system. The stores receiving costs, which are driven by the number of component deliveries, make up $10,250 of the total production overhead cost. Driver analysis for Gallego Inc revealed the following information:
Product: Q R S Budgeted production (units) 1,200 1,500 900 Number of component deliveries 400 800 900 Number of issues from stores 2,000 3,000 6,000
The total cost attributed to Product R for component deliveries using the proposed activity based costing system is (to the nearest whole $):
$ ____________(input answer without commas)CorrectIncorrect
A company produced three products, the standard costs of which are shown below:
P R S $ $ $ Direct material 50 40 30 Direct labour (@ $10 per hour) 30 40 50 Production overhead* 30 40 50 _____ _____ _____ 110 120 130 _____ _____ _____ Production units 10,000 20,000 30,000
*Absorbed on the basis of direct labour hours.
The company wishes to introduce ABC, and has identified two major cost pools for production overhead and their associated cost drivers.
Information on these activity cost pools and their drivers is given below:
Inspection costs $1,400,000 – driven by purchase requisitions.
Setup costs $1,200,000 – driven by number of setups.
Further relevant information on the three products is also given below:
P R S Number of purchase requisitions 1,200 1,800 2,000 Number of set ups 240 260 300
Calculate the total cost per unit of product P.CorrectIncorrect
P operates an activity based costing (ABC) system to attribute its overhead costs to cost objects.
In its budget for the year ending 31 August 20X6, the company expected to place a total of 2,895 purchase orders at a total cost of $110,010. This activity and its related costs were budgeted to occur at a constant rate throughout the budget year, which is divided into 13 four‐week periods.
During the four‐week period ended 30 June 20X6, a total of 210 purchase orders were placed at a cost of $7,650.
The over‐recovery of these costs for the four‐week period was:CorrectIncorrect
A food-processing company operates an activity based costing (ABC) system.
Which of the following would be classified as a product-sustaining activity? (Select all that apply).CorrectIncorrect
Which of the following explains why an activity based costing system may produce more accurate product costs than a traditional absorption costing system?CorrectIncorrect
Which of the following are benefits of activity based costing when compared to traditional absorption costing? (Select all that apply).CorrectIncorrect
A food‐processing company operates an activity-based costing (ABC) system. Determine which of the following would be classified as a product‐sustaining activityCorrectIncorrect
A food‐processing company operates an activity-based costing (ABC) system. Determine which of the following would be classified as a facility-sustaining activityCorrectIncorrect
From the options below, select the correct term by which overheads separated into groups during the first stage of Activity Based Costing are known as.CorrectIncorrect
From the options below, select under which heading in an ABC system would an activity/unit of work or task with differentiated purposes be classified?CorrectIncorrect
E Plc uses an activity based costing system to attribute overhead costs to its three products. The following budgeted data relates to the year to 31st December 2008:
Product X Y Z Production units (000) 15 25 20 Batch size (000 units) 2.5 5 4
Machine set up costs are caused by the number of batches of each product and have been estimated to be £600,000 for the year.
Calculate the machine set up costs that would be attributed to each unit of product Y.
£ __________________ (answer to two decimal places)CorrectIncorrect
A company uses an activity based costing system to attribute overhead costs to its three products. The following budgeted data relates to this year:
Product X Y Z Production (units) 50,000 25,000 20,000 Batch size 250 100 400
Set up costs are determined by the number of batches of each product and have been estimated to be $60,000 for the year.
What is the cost driver rate for set up costs.
The following data relates to production of Karlson Inc’s three products in period 8:
Product A Product B Product C Production and sales (units) 300 200 150 Machine hours per unit 30 10 10 No of production runs 7 2 1 No of deliveries to customers 5 5 5 No of deliveries of material into store 20 19 1 Production overhead costs £ Machining 35,750 Set-up costs 5,250 Materials handling (receiving) 17,500 Packing costs (despatch) 22,500
What is the overhead cost per unit of Product B using activity based costing?CorrectIncorrect
From the options below, select the TWO statements that are true when comparing Traditional Costing methods and Activity Based Costing methods.CorrectIncorrect
From the options below, choose the reasons why an activity based costing system is likely to yield more accurate product costs than a traditional absorption costing system.CorrectIncorrect
F Ltd is a manufacturing company based in the USA. For external reports, the company uses an activity-based costing system to calculate the costs of products. There are three cost pools within the company and the company uses pre-defined overhead rates for each one. All estimated and actual costs and activities for the current year are shown in the following table:
Calculate the overhead amount that was applied during the year:CorrectIncorrect