Identify the choice that best completes the statement or answers the question.
____1.Which is NOT a characteristic of a functional-based costing system? a.It uses traditional product costing definitions.
b.It uses unit-based activity drivers to assign overhead to products. c.It is cheaper than an activity-based costing system.
d.It offers greater product costing accuracy than an activity-based costing system.
____2.Unit-based product costing uses which of the following procedures? a.Overhead costs are traced to departments, then costs are traced to products. b.Overhead costs are traced to activities, then costs are traced to products. c.Overhead costs are traced directly to products.
d.All overhead costs are expensed as incurred.
____3.A predetermined overhead rate is calculated using which of the following formulas? a.Actual annual overhead / Budgeted annual driver level
b.Budgeted annual overhead / Budgeted annual driver level
c.Budgeted annual overhead / Actual annual driver level
d.none of the above
____4.All of the following are nonunit-based activity drivers EXCEPT a.number of setups.
b.number of direct labor hours.
c.number of inspections.
d.number of material moves.
Adams Company predicted factory overhead for 2009 and 2010 would be $120,000 for each year. The predicted activity for 2009 and 2010 were 30,000 and 20,000 direct labor hours, respectively. Additional data are as follows:
Sales in units25,00025,000
Selling price per unit$20$20
Direct materials and direct labor per unit$10$10
The company assumes that the long-run normal production level is 20,000 direct labor hours per year. The actual factory overhead cost for the end of 2009 and 2010 was $120,000. Assume that it takes one direct labor hour to make one finished unit.
____5.Refer to Figure 4-1. When the annual estimated factory overhead rate is used, the gross profits for 2009 and 2010, respectively, are a.$150,000 and $150,000.
b.$250,000 and $250,000.
c.$150,000 and $110,000.
d.$150,000 and $100,000.
____6.The following information is provided for the year:
Actual direct labor hours worked36,000
Budgeted direct labor hours30,000
Actual overhead costs incurred$360,000
If normal costing is used, the amount of overhead applied for the year is a.$299,880.
____7.The following information is provided:
Estimated manufacturing overhead$690,000
Estimated machine hours46,000
Actual machine hours worked50,000
Actual costs incurred:
The amount of overapplied or underapplied overhead is
____8.The following information pertains to Black Corporation for 2010: Estimated total overhead costs for 2010$37,500
Estimated direct labor costs for 201025,000
Actual direct labor costs22,500
Actual overhead costs36,000
Activity baseDirect labor costs
What is the predetermined overhead rate for Black Corporation for 2010? a.150%
____9.The following information is provided for the year:
Actual machine hours worked25,000
Budgeted machine hours27,500
If normal costing is used, budgeted overhead used to calculate the predetermined rate would be
____10.Long Industries uses a job-order costing system. The Molding Department applies overhead based on machine hours, while the Assembly Department applies overhead based on direct labor hours. The company made the following estimates at the beginning of the current...