101 potter weasley company had the following activities estimated indirect activity 4310412
101) Potter & Weasley Company had the following activities, estimated indirect activity costs, and allocation bases:
Activities |
Indirect Activity Costs |
Allocation Base |
Account inquiry (hours) |
$86,400 |
2,700 |
Account billing (lines) |
$56,000 |
32,000 |
Account verification (accounts) |
$38,250 |
25,500 |
Correspondence (letters) |
$80,000 |
10,000 |
Potter & Weasley uses activity based costing.
The above activities are used by Departments P and Q as follows:
Department P |
Department Q |
|
Account inquiry (hours) |
400 |
800 |
Account billing (lines) |
10,000 |
4,000 |
Account verification (accounts) |
6,000 |
7,000 |
Correspondence (letters) |
1,000 |
2,000 |
What is the cost per driver unit for the account verification activity?
A) $1.75
B) $1.50
C) $9.56
D) $8.00
102) Potter & Weasley Company had the following activities, estimated indirect activity costs, and allocation bases:
Activities |
Indirect Activity Costs |
Allocation Base |
Account inquiry (hours) |
$86,400 |
2,700 |
Account billing (lines) |
$56,000 |
32,000 |
Account verification (accounts) |
$38,250 |
25,500 |
Correspondence (letters) |
$80,000 |
10,000 |
Potter & Weasley uses activity based costing.
The above activities are used by Departments P and Q as follows:
Department P |
Department Q |
|
Account inquiry (hours) |
400 |
800 |
Account billing (lines) |
10,000 |
4,000 |
Account verification (accounts) |
6,000 |
7,000 |
Correspondence (letters) |
1,000 |
2,000 |
What is the cost per driver unit for the correspondence activity?
A) $8.00
B) $1.75
C) $29.63
D) $32.00
103) Potter & Weasley Company had the following activities, estimated indirect activity costs, and allocation bases:
Activities |
Indirect Activity Costs |
Allocation Base |
Account inquiry (hours) |
$86,400 |
2,700 |
Account billing (lines) |
$56,000 |
32,000 |
Account verification (accounts) |
$38,250 |
25,500 |
Correspondence (letters) |
$80,000 |
10,000 |
Potter & Weasley uses activity based costing.
The above activities are used by Departments P and Q as follows:
Department P |
Department Q |
|
Account inquiry (hours) |
400 |
800 |
Account billing (lines) |
10,000 |
4,000 |
Account verification (accounts) |
6,000 |
7,000 |
Correspondence (letters) |
1,000 |
2,000 |
How much of the account inquiry cost will be assigned to Department Q?
A) $6,400
B) $25,600
C) $12,800
D) $8,000
104) Potter & Weasley Company had the following activities, estimated indirect activity costs, and allocation bases:
Activities |
Indirect Activity Costs |
Allocation Base |
Account inquiry (hours) |
$86,400 |
2,700 |
Account billing (lines) |
$56,000 |
32,000 |
Account verification (accounts) |
$38,250 |
25,500 |
Correspondence (letters) |
$80,000 |
10,000 |
Potter & Weasley uses activity based costing.
The above activities are used by Departments P and Q as follows:
Department P |
Department Q |
|
Account inquiry (hours) |
400 |
800 |
Account billing (lines) |
10,000 |
4,000 |
Account verification (accounts) |
6,000 |
7,000 |
Correspondence (letters) |
1,000 |
2,000 |
How much of the correspondence cost will be assigned to Department P?
A) $16,000
B) $9,000
C) $8,000
D) $1,500
105) Potter & Weasley Company had the following activities, estimated indirect activity costs, and allocation bases:
Activities |
Indirect Activity Costs |
Allocation Base |
Account inquiry (hours) |
$86,400 |
2,700 |
Account billing (lines) |
$56,000 |
32,000 |
Account verification (accounts) |
$38,250 |
25,500 |
Correspondence (letters) |
$80,000 |
10,000 |
Potter & Weasley uses activity based costing.
The above activities are used by Departments P and Q as follows:
Department P |
Department Q |
|
Account inquiry (hours) |
400 |
800 |
Account billing (lines) |
10,000 |
4,000 |
Account verification (accounts) |
6,000 |
7,000 |
Correspondence (letters) |
1,000 |
2,000 |
How much of the account verification costs will be assigned to Department P?
A) $9,000
B) $8,000
C) $10,500
D) $3,000
106) Watson's Computer Company uses ABC to account for its manufacturing process.
Activities |
Indirect activity budget |
Allocation base (cost driver) |
Materials handling |
$ 52,000 |
Based on number of parts |
Machine setup |
$ 30,000 |
Based on number of setups |
Assembling |
$ 9,750 |
Based on number of parts |
Packaging |
$ 15,300 |
Based on number of finished units |
Watson's Computer Company expects to produce 2,250 computers. Watson's Computer Company also expects to use 13,000 parts and have 20 setups.
The allocation rate for materials handling will be
A) $4.00.
B) $6.80.
C) $23.11.
D) $7.01.
107) Watson's Computer Company uses ABC to account for its manufacturing process.
Activities |
Indirect activity budget |
Allocation base (cost driver) |
Materials handling |
$ 52,000 |
Based on number of parts |
Machine setup |
$ 30,000 |
Based on number of setups |
Assembling |
$ 9,750 |
Based on number of parts |
Packaging |
$ 15,300 |
Based on number of finished units |
Watson's Computer Company expects to produce 2,250 computers. Watson's Computer Company also expects to use 13,000 parts and have 20 setups.
The allocation rate for machine setups is
A) $7.01.
B) $1,500.
C) $488.
D) $765.
108) Watson's Computer Company uses ABC to account for its manufacturing process.
Activities |
Indirect activity budget |
Allocation base (cost driver) |
Materials handling |
$ 52,000 |
Based on number of parts |
Machine setup |
$ 30,000 |
Based on number of setups |
Assembling |
$ 9,750 |
Based on number of parts |
Packaging |
$ 15,300 |
Based on number of finished units |
Watson's Computer Company expects to produce 2,250 computers. Watson's Computer Company also expects to use 13,000 parts and have 20 setups.
The allocation rate for packaging is
A) $4.00.
B) $13.33.
C) $6.80.
D) $7.01.
109) Hummingbird Manufacturing manufactures small parts and uses an activity-based costing system.
Activity |
Est. Indirect Activity Costs |
Allocation base |
Cost allocation rate |
Materials |
$75,000 |
Material moves |
$3.00/move |
Assembling |
$255,000 |
Direct labor hours |
$10.00/dir. labor hour |
Packaging |
$90,000 |
# of finished units |
$1.00/finished unit |
The following parts were produced in October with the following information:
Part |
# Produced |
Materials Costs |
# Moves |
Dir. Labor Hrs. |
A |
2,250 |
$3,000 |
900 |
250 |
B |
4,000 |
$6,500 |
1,700 |
325 |
C |
4,750 |
$9,000 |
2,500 |
1,500 |
Total manufacturing costs for part A is
A) $7,450.
B) $5,200.
C) $10,450.
D