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

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