Cost Accumulation Systems Paper 4

Sanscom Corporation utilizes an activity-based costing system for applying costs to its two products, P and Q. In the assembly department, material handling costs vary directly with the number of parts inserted into the product. Machinery is recalibrated and oiled each weekend regardless of the number of parts inserted during the previous week. Both material handling and machinery maintenance costs are charged to the product on the basis of the number of parts inserted. Due to reengineering of the production process for Product P, the number of insertion parts per finished unit has been reduced. How will the redesign of the production process for Product P affect the activity-based cost of Product Q?

When using activity-based costing techniques, which one of the following departmental activities would be expected to use machine hours as a cost driver to allocate overhead costs to production?

A company is considering the implementation of an activity-based costing and management program. The company

All of the following are likely to be used as a cost allocation base in activity-based costing except the

Which one of the following is least likely to be an objective of a cost accounting system?

In a broad sense, cost accounting can best be defined within the accounting system as

A manufacturing firm produces multiple families of products requiring various combinations of different types of parts. The manufacturer has identified various cost pools, one of which consists of materials handling costs. This cost pool includes the wages and employee benefits of the workers involved in receiving materials, inspecting materials, storing materials in inventory, and moving materials to the workstations; depreciation and maintenance of materials handling equipment (e.g., forklift trucks); and costs of supplies used as well as other related costs. Of the following, the most appropriate cost driver for assigning materials handling costs to the various products most likely is

Which one of the following is the focus of activity-based management?

"Huntley Company has two departments, Machining and Assembly. This year’s budget for the plant contained the following information."
	Machining	Assembly
Manufacturing overhead	$4,000,000	$2,000,000
Direct labor hours	100,000	200,000
Machine hours	410,000	40,000

"If the plant uses a plantwide overhead rate based on direct labor hours, what would the rate be?"

"Huntley Company has two departments, Machining and Assembly, at its Milwaukee plant. This year’s budget for the plant contained the following information."
	Machining	Assembly
Manufacturing overhead	$4,000,000	$2,000,000
Direct labor hours	100,000	200,000
Machine hours	410,000	40,000

"Assume the Milwaukee plant uses machine hours as the overhead base in machining and direct labor in Assembly. If Job 2420 uses 20 direct labor hours in each department, 10 machines hours in Machining and 5 machine hours in Assembly, how much overhead would be assigned to the job?"