56) Hinckley & Granger Company had the following activities, estimated indirect activity costs, and allocation bases:
Activities
|
Indirect Activity Costs
|
Allocation Base
|
Account inquiry (hours)
|
$75,000
|
2,500
|
Account billing (lines)
|
$45,000
|
30,000
|
Account verification (accounts)
|
$18,000
|
24,000
|
Correspondence (letters)
|
$40,000
|
4,000
|
Hinckley & Granger uses activity-based costing.
The above activities are used by Departments P and Q as follows:
|
Department P
|
Department Q
|
Account inquiry (hours)
|
300
|
600
|
Account billing (lines)
|
8,000
|
6,000
|
Account verification (accounts)
|
5,000
|
4,500
|
Correspondence (letters)
|
500
|
600
|
How much of the account inquiry cost will be assigned to Department Q?
A) $6,000
B) $9,000
C) $18,000
D) $6,000
57) Hinckley & Granger Company had the following activities, estimated indirect activity costs, and allocation bases:
Activities
|
Indirect Activity Costs
|
Allocation Base
|
Account inquiry (hours)
|
$75,000
|
2,500
|
Account billing (lines)
|
$45,000
|
30,000
|
Account verification (accounts)
|
$18,000
|
24,000
|
Correspondence (letters)
|
$40,000
|
4,000
|
Hinckley & Granger uses activity-based costing.
The above activities are used by Departments P and Q as follows:
|
Department P
|
Department Q
|
Account inquiry (hours)
|
300
|
600
|
Account billing (lines)
|
8,000
|
6,000
|
Account verification (accounts)
|
5,000
|
4,500
|
Correspondence (letters)
|
500
|
600
|
How much of the correspondence cost will be assigned to Department P?
A) $5,000
B) $6,000
C) $375
D) $3,750
58) Hinckley & Granger Company had the following activities, estimated indirect activity costs, and allocation bases:
Activities
|
Indirect Activity Costs
|
Allocation Base
|
Account inquiry (hours)
|
$75,000
|
2,500
|
Account billing (lines)
|
$45,000
|
30,000
|
Account verification (accounts)
|
$18,000
|
24,000
|
Correspondence (letters)
|
$40,000
|
4,000
|
Hinckley & Granger uses activity-based costing.
The above activities are used by Departments P and Q as follows:
|
Department P
|
Department Q
|
Account inquiry (hours)
|
300
|
600
|
Account billing (lines)
|
8,000
|
6,000
|
Account verification (accounts)
|
5,000
|
4,500
|
Correspondence (letters)
|
500
|
600
|
How much of the account verification costs will be assigned to Department P?
A) $450
B) $3,375
C) $5,000
D) $3,750
59) Durable Engines Company uses ABC to account for it manufacturing process.
Activities
|
Indirect activity budget
|
Allocation base (cost driver)
|
Materials handling
|
$36,000
|
Based on number of parts
|
Machine setup
|
$19,200
|
Based on number of setups
|
Assembling
|
$6,000
|
Based on number of parts
|
Packaging
|
$12,800
|
Based on number of finished units
|
Durable Engines Company expects to produce 2,000 engines. Durable Engines Company also expects to use 12,000 parts and have 16 setups.
The allocation rate for materials handling will be:
A) $5.28.
B) $6.40.
C) $3.00.
D) $18.00.
60) Durable Engines Company uses ABC to account for it manufacturing process.
Activities
|
Indirect activity budget
|
Allocation base (cost driver)
|
Materials handling
|
$36,000
|
Based on number of parts
|
Machine setup
|
$19,200
|
Based on number of setups
|
Assembling
|
$6,000
|
Based on number of parts
|
Packaging
|
$12,800
|
Based on number of finished units
|
Durable Engines Company expects to produce 2,000 engines. Durable Engines Company also expects to use 12,000 parts and have 16 setups.
The allocation rate for engine setups is:
A) $1,200.
B) $800.
C) $375.
D) $5.28.
61) Durable Engines Company uses ABC to account for it manufacturing process.
Activities
|
Indirect activity budget
|
Allocation base (cost driver)
|
Materials handling
|
$36,000
|
Based on number of parts
|
Machine setup
|
$19,200
|
Based on number of setups
|
Assembling
|
$6 ,000
|
Based on number of parts
|
Packaging
|
$12,800
|
Based on number of finished units
|
Durable Engines Company expects to produce 2,000 engines. Durable Engines Company also expects to use 12,000 parts and have 16 setups.
The allocation rate for packaging is:
A) $5.28.
B) $6.40.
C) $9.60.
D) $3.00.
62) Sparrow Manufacturing manufactures small parts and uses an activity-based costing system.
Activity
|
Est. Indirect Activity Costs
|
Allocation base
|
Cost allocation rate
|
Materials
|
$70,000
|
Material moves
|
$2.00/move
|
Assembling
|
$240,000
|
Direct labor hours
|
$8.00/dir. labor hour
|
Packaging
|
$80,000
|
# of finished units
|
$0.80/finished unit
|
The following parts were produced in October with the following information:
Part
|
# Produced
|
Materials Costs
|
# Moves
|
Dir. Labor Hrs.
|
A
|
2,500
|
$2,500
|
800
|
200
|
B
|
3,500
|
$7,000
|
1,500
|
300
|
C
|
4,500
|
$11,250
|
2,200
|
1,000
|
Total manufacturing costs for part A is:
A) $7,700.
B) $3,200.
C) $5,200.
D) $5,700.
63) Sparrow Manufacturing manufactures small parts and uses an activity-based costing system.
Activity
|
Est. Indirect Activity Costs
|
Allocation base
|
Cost allocation rate
|
Materials
|
$70,000
|
Material moves
|
$2.00/move
|
Assembling
|
$240,000
|
Direct labor hours
|
$8.00/dir. labor hour
|
Packaging
|
$80,000
|
# of finished units
|
$0.80/finished unit
|
The following parts were produced in October with the following information:
Part
|
# Produced
|
Materials Costs
|
# Moves
|
Dir. Labor Hrs.
|
A
|
2,500
|
$2,500
|
800
|
200
|
B
|
3,500
|
$7,000
|
1,500
|
300
|
C
|
4,500
|
$11,250
|
2,200
|
1,000
|
Total manufacturing costs for part B is:
A) $8,200.
B) $15,200.
C) $5,400.
D) $12,400.
64) Sparrow Manufacturing manufactures small parts and uses an activity-based costing system.
Activity
|
Est. Indirect Activity Costs
|
Allocation base
|
Cost allocation rate
|
Materials
|
$70,000
|
Material moves
|
$2.00/move
|
Assembling
|
$240,000
|
Direct labor hours
|
$8.00/dir. labor hour
|
Packaging
|
$80,000
|
# of finished units
|
$0.80/finished unit
|
The following parts were produced in October with the following information:
Part
|
# Produced
|
Materials Costs
|
# Moves
|
Dir. Labor Hrs.
|
A
|
2,500
|
$2,500
|
800
|
200
|
B
|
3,500
|
$7,000
|
1,500
|
300
|
C
|
4,500
|
$11,250
|
2,200
|
1,000
|
Total manufacturing costs for part C is:
A) $27,250.
B) $16,000.
C) $23,650.
D) $12,400.
65) Sparrow Manufacturing manufactures small parts and uses an activity-based costing system.
Activity
|
Est. Indirect Activity Costs
|
Allocation base
|
Cost allocation rate
|
Materials
|
$70,000
|
Material moves
|
$2.00/move
|
Assembling
|
$240,000
|
Direct labor hours
|
$8.00/dir. labor hour
|
Packaging
|
$80,000
|
# of finished units
|
$0.80/finished unit
|
The following parts were produced in October with the following information:
Part
|
# Produced
|
Materials Costs
|
# Moves
|
Dir. Labor Hrs.
|
A
|
2,500
|
$2,500
|
800
|
200
|
B
|
3,500
|
$7,000
|
1,500
|
300
|
C
|
4,500
|
$11,250
|
2,200
|
1,000
|
Total units costs for all parts is:
A) $4.34.
B) $6.06.
C) $7.98.
D) $13.48.