# chap 3 quiz 2

Topics: Cost, Price, Costs Pages: 5 (511 words) Published: June 15, 2015
﻿Quiz Submissions - Practice Quiz - Chapter 3

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Attempt 2
Written: Jan 27, 2015 7:38 PM - Jan 27, 2015 8:45 PM
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Chapter 3 Practice Questions

Question 1

1 / 1 point
Aujla Corporation uses activity-based costing to determine product costs for external financial reports. The company has provided the following data concerning its activity-based costing system:

The activity rate for the batch setup activity cost pool is closest to:

a)
\$70.40

b)
\$29.40

c)
\$26.10

d)
\$234.90

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Activity rate = Estimated overhead cost ÷ Expected activity = \$234,900 ÷ 9,000 setups = \$26.10 per setup

Question 2

1 / 1 point
Accola Company uses activity-based costing. The company has two products: A and B. The annual production and sales of Product A is 1,100 units and of Product B is 700 units. There are three activity cost pools, with estimated costs and expected activity as follows:

The activity rate for Activity 3 is closest to:

a)
\$119.72

b)
\$116.18

c)
\$26.67

d)
\$56.70

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Activity rate = Estimated overhead cost ÷ Expected activity = \$48,762 ÷ 860 = \$56.70

Question 3

1 / 1 point
Activity rates from Quattrone Corporation's activity-based costing system are listed below. The company uses the activity rates to assign overhead costs to products:

Last year, Product F76D included the following activities: 2 customer orders, 434 assembly hours, and 20 batches. How much overhead cost would be assigned to Product F76D using the activity-based costing system?

a)
\$1,041.80

b)
\$2,000.04

c)
\$66,908.88

d)
\$146.73

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Question 4

1 / 1 point
When switching from a traditional costing system to an activity-based costing system that includes some batch-level costs:

a)
the unit product costs of high volume products typically change less than the unit product costs of low volume products.

b)
the unit product costs of high volume products typically change more than the unit product costs of low volume products.

c)
the unit product costs of high volume products change as much as the unit product costs of low volume products.

d)
the unit product costs of high volume do not change.

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correct

Question 5

1 / 1 point
Njombe Corporation manufactures a variety of products. In the past, Njombe has been using a traditional costing system in which the predetermined overhead rate was 150% of direct labor cost. Selling prices had been set by multiplying total product cost by 200%. Sensing that this system was distorting costs and selling prices, Njombe has decided to switch to an activity-based costing system for manufacturing overhead costs using three activity cost pools. Selling prices are still to be set at 200% of unit product cost under the new system. Information on these cost pools for next year are as follows:

Information (on a per unit basis) related to three popular products at Njombe are as follows:

Under the traditional system, what would be the selling price of one unit of Model #36?

a)
\$2,536

b)
\$2,712

c)
\$4,080

d)
\$5,506

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