Question

1.In the predetermined factory overhead rate the budgeted activity units used in the denominator or formula known as cost driver are measured in all the following except: Select one: a. direct labor hours b. machine hours c. direct labor costs d. indirect labor costs e. production units

2.Activity-based costs include the following steps except: Select one: a. identify activities that consume resources b. identify the cost drivers associated with each activity or activity pool c. calculate an applied rate for each activity d. assign costs to products by multiplying the cost pool rate by the number of cost driver units e. identify predetermined rates

3.Activity cost drivers for marketing expenses include: Select one: a. selling – sales calls, orders, volume of sales b. warehousing – number of items stored, volume of items stored c. credit and collection –number of customer orders, dollar amounts d. all the above e. none of the above

4.Manufacturing organizations perform all the following except: Select one: a. design and manufacture products for sale b. reflect three inventory accounts on balance sheets c. determine the cost of goods manufactured d. include and determine cost of goods in calculation of cost of goods sold e. maintain only one inventory account on the balance sheet

Answer 1

.1 In the predetermined factory overhead rate the budgeted activity units used in the denominator or formula known as cost driver are measured in direct labor hours,machine hours ,direct labor costs,production units

It is not measured in indirect labor cost.

Hence ,

d. indirect labor costs

.2 . Activity-based costs include the following steps identify activities that consume resources,identify the cost drivers associated with each activity or activity pool, calculate an applied rate for each activity and assign costs to products by multiplying the cost pool rate by the number of cost driver units

It does not include following step.

“identify predetermined rates”

e. identify predetermined rates

.3. Activity cost drivers for marketing expenses includes. selling – sales calls, orders, volume of sales

It does not include: warehousing – number of items stored, volume of items stored, credit and collection –number of customer orders, dollar amounts,

1. selling – sales calls, orders, volume of sales

.4. Manufacturing organizations perform all the following design and manufacture products for sale, determine the cost of goods manufactured ,include and determine cost of goods in calculation of cost of goods sold ,maintain only one inventory account on the balance sheet

b. reflect three inventory accounts on balance sheets