D196 (PA) UNIT 7 EXAM WITH 100%
CORRECT ANSWERS
Smartistry produces custom photo albums, calendars, and
stationery for customers. Which overhead allocation
system should the company use? - Correct Answer-Job
order costing
In a job order costing system, some actual production
costs are directly associated with a job or product or
project. Which production cost is allocated rather than
being directly associated with a job, product, or project? -
Correct Answer-Overhead
What is direct labor? - Correct Answer-Wages of factory
employees who work directly on the products
manufactured
In an ABC system, what is a cost pool? - Correct Answer-
The collection of overhead costs associated with a specific
overhead cost activity
Sara is frustrated with her company's costing system. She
suspects that too much overhead cost is being allocated to
generic, simple products, and too little overhead cost is
being allocated to custom-designed, complex products.
The existing overhead allocation system is very traditional,
with overhead being allocated strictly based on the number
of direct labor hours.
Which type of costing system should Sara's company be
using instead of its current system? - Correct Answer-
Activity-based costing
There are three general types of overhead cost activities in
an ABC system. What are those three general types of
activities? - Correct Answer-Unit-level, batch-level, and
product-line
CORRECT ANSWERS
Smartistry produces custom photo albums, calendars, and
stationery for customers. Which overhead allocation
system should the company use? - Correct Answer-Job
order costing
In a job order costing system, some actual production
costs are directly associated with a job or product or
project. Which production cost is allocated rather than
being directly associated with a job, product, or project? -
Correct Answer-Overhead
What is direct labor? - Correct Answer-Wages of factory
employees who work directly on the products
manufactured
In an ABC system, what is a cost pool? - Correct Answer-
The collection of overhead costs associated with a specific
overhead cost activity
Sara is frustrated with her company's costing system. She
suspects that too much overhead cost is being allocated to
generic, simple products, and too little overhead cost is
being allocated to custom-designed, complex products.
The existing overhead allocation system is very traditional,
with overhead being allocated strictly based on the number
of direct labor hours.
Which type of costing system should Sara's company be
using instead of its current system? - Correct Answer-
Activity-based costing
There are three general types of overhead cost activities in
an ABC system. What are those three general types of
activities? - Correct Answer-Unit-level, batch-level, and
product-line
