ACC 241 EXAM 2 ASU DALLMUS EXAMS
WITH CORRECT ANSWERS /GRADED A+
departmental overhead allocation - ANSWER-this kind of overheard
rate increases the accuracy of job costs when each department
incurs different types and amounts of manufacturing overhead and
each product, or job, uses the departments to a different extent
formula: total estimated departmental overhead cost pool/total
estimated amount of the departmental allocation base
steps of activity based costing - ANSWER-1.Identify the activities
and estimate the manufacturing overhead costs of each activity
2.Select the allocation base for each activity and estimate the total
amount that will be used during the year
3.Compute cost allocation rate for each activity : Estimated total
indirect costs of activity /Estimated total quantity of cost allocation
base
4. Allocate some manufacturing overhead from each activity to the
individual cost object
What are the four categories of activity costs in the cost hierarchy?
- ANSWER-1: Unit-Level Activities
2: Batch-Level Activities
3: Product-Level Activities
4: Facility-Level Activities
What are Unit-Level Activities? - ANSWER--Activities and costs
incurred for every unit-Ex: Inspecting/packaging each unit the
company produces
, What are Batch-Level Activities? - ANSWER--Activities/costs
incurred for every batch, regardless of the number of units in the
batch-Ex: Machine Setup --> Once the machines are set up to be
used in production, the company could produce a batch of 1, 10, or
100 units, while still only incurring the machine setup cost once for
the entire batch
What are Product-Level Activities? - ANSWER--Activities and costs
incurred for a particular product, regardless of the number of units
or batches of the product produced-Ex: The cost to research,
develop, design, and market new models
What are Facility-Level Activities? - ANSWER--Activities and costs
incurred no matter how many units, batches, or products are
produced in the plant-Ex: Facility upkeep --> The cost of
depreciation, insurance, property tax, and maintenance on the
entire production plant
activity based management - ANSWER-a management approach
that focuses on managing activities as a way of eliminating waste
and reducing delays and defects
-refers to the use of activity-based cost information to make
decisions that increase profits while satisfying customer needs
What are value-added activities? - ANSWER-Activities for which the
customer is willing to pay because these activities add value to the
final product
What are non-value-added activities? - ANSWER-Activities that
neither enhance the customer's image of the product nor provide a
competitive advantage
WITH CORRECT ANSWERS /GRADED A+
departmental overhead allocation - ANSWER-this kind of overheard
rate increases the accuracy of job costs when each department
incurs different types and amounts of manufacturing overhead and
each product, or job, uses the departments to a different extent
formula: total estimated departmental overhead cost pool/total
estimated amount of the departmental allocation base
steps of activity based costing - ANSWER-1.Identify the activities
and estimate the manufacturing overhead costs of each activity
2.Select the allocation base for each activity and estimate the total
amount that will be used during the year
3.Compute cost allocation rate for each activity : Estimated total
indirect costs of activity /Estimated total quantity of cost allocation
base
4. Allocate some manufacturing overhead from each activity to the
individual cost object
What are the four categories of activity costs in the cost hierarchy?
- ANSWER-1: Unit-Level Activities
2: Batch-Level Activities
3: Product-Level Activities
4: Facility-Level Activities
What are Unit-Level Activities? - ANSWER--Activities and costs
incurred for every unit-Ex: Inspecting/packaging each unit the
company produces
, What are Batch-Level Activities? - ANSWER--Activities/costs
incurred for every batch, regardless of the number of units in the
batch-Ex: Machine Setup --> Once the machines are set up to be
used in production, the company could produce a batch of 1, 10, or
100 units, while still only incurring the machine setup cost once for
the entire batch
What are Product-Level Activities? - ANSWER--Activities and costs
incurred for a particular product, regardless of the number of units
or batches of the product produced-Ex: The cost to research,
develop, design, and market new models
What are Facility-Level Activities? - ANSWER--Activities and costs
incurred no matter how many units, batches, or products are
produced in the plant-Ex: Facility upkeep --> The cost of
depreciation, insurance, property tax, and maintenance on the
entire production plant
activity based management - ANSWER-a management approach
that focuses on managing activities as a way of eliminating waste
and reducing delays and defects
-refers to the use of activity-based cost information to make
decisions that increase profits while satisfying customer needs
What are value-added activities? - ANSWER-Activities for which the
customer is willing to pay because these activities add value to the
final product
What are non-value-added activities? - ANSWER-Activities that
neither enhance the customer's image of the product nor provide a
competitive advantage
