1. Mission Company is preparing its annual profit plan.

As part of its analysis of the profitability

of individual products, the controller estimates the amount of overhead that should be
allocated to the individual product lines from the information provided below. (CMA adapted)
Wall Mirrors Specialty Windows
Units produced 40 20
Material moves per product line 5 15
Direct labor-hours per product
line
200 300
Budgeted material handling costs: $50,000

Under an activity-based costing (ABC) system, the materials handling costs allocated to one unit of
Specialty Windows would be:

A. $1,875.00.
B. $937.50.
C. $312.50.
D. $1,500.00.

2. Mission Company is preparing its annual profit plan. As part of its analysis of the profitability
of individual products, the controller estimates the amount of overhead that should be
allocated to the individual product lines from the information provided below. (CMA adapted)
Wall Mirrors Specialty Windows
Units produced 40 20
Material moves per product line 5 15
Direct labor-hours per product line 200 300
Budgeted material handling costs: $50,000

Under a traditional costing system that allocates overhead on the basis of direct labor-hours, the
materials handling costs allocated to one unit of Specialty Windows would be:

A. $1,500.
B. $500.
C. $2,000.
D. $5,000.

3. Miracle Consulting Corporation has its headquarters in Chicago and operates from three
branch offices in Portland, Dallas, and Miami. Two of the company's activity cost pools are
General Service and Research Service. These costs are allocated to the three branch offices
using an activity-based costing system. Information for next year follows:
Activity Cost PoolActivity Measure Estimated Cost

General service % of time devoted to branch $ 700,000

Research service Computer time $ 140,000

Estimated branch data for next year is as follows:

 % of time Computer time

Portlan
d
30% 200,000 minutes

Dallas 60% 150,000 minutes

Miami 10% 50,000 minutes

How much of the headquarters cost allocation should the Dallas office expect to receive next year?

A. $280,000
B. $409,500
C. $472,500
D. $504,000

4. Cassidy Manufacturing Corporation has a traditional costing system in which it applies

manufacturing overhead to its products using a predetermined overhead rate based on direct
labor-hours (DLHs). The company has two products, VIP and Kommander, about which it
has provided the following data:
VIP Kommander

Direct materials per unit $ 27.50 $ 62.10

Direct labor per unit $ 15.60 $ 52.00

Direct labor-hours per

unit
0.60 2.00

Annual production 40,000 15,000

The company's estimated total manufacturing overhead for the year is $2,449,440 and the
company's estimated total direct labor-hours for the year is 54,000.

The company is considering using a variation of activity-based costing to determine its unit product
costs for external reports. Data for this proposed activity-based costing system appear below:
Activities and Activity Measures Estimated Overhead Cost

Assembling products (DLHs) $ 918,000

Preparing batches (batches) 397,440

Product support (product

variations)
1,134,000

Total $ 2,449,440
 Expected Activity

VIP Kommander Total

24,00
DLHs 30,000 54,000
0

Batches 1,458 1,026 2,484

Product variations 2,592 1,188 3,780

Unit overhead cost of Product Kommander under the activity-based costing system is closest to:

A. $204.82.
B. $68.70.
C. $182.80.
D. $114.10.

5. Markham Company makes two products: Basic Product and Deluxe Product. Annual
production and sales are 1,700 units of Basic Product and 1,100 units of Deluxe Product.
The company has traditionally used direct labor-hours as the basis for applying all
manufacturing overhead to products. Basic Product requires 0.3 direct labor-hours per unit
and Deluxe Product requires 0.6 direct labor-hours per unit. The total estimated overhead for
next period is $98,785.

The company is considering switching to an activity-based costing system for the purpose of
computing unit product costs for external reports. The new activity-based costing system would have
three overhead activity cost pools (Activity 1, Activity 2, and General Factory) with estimated
overhead costs and expected activity as follows:
Estimated Expected Activity

Activity Cost Deluxe

Pool Overhead Costs Basic Product Product Total

Activity 1 $ 30,528 1,000 600 1,600

Activity 2 17,385 1,700 200 1,900

General Factory 50,872 510 660 1,170

Total $ 98,785

(Note: The General Factory costs are allocated on the basis of direct labor-hours.)

The overhead cost per unit of Deluxe Product under the activity-based costing system is closest to:
 A. $50.66.
B. $26.09.
C. $35.28.
D. $38.16.

6. The Mega Construction Company recently switched to activity-based costing (ABC) from the
department allocation method. The department method allocated overhead costs at a rate of
$60 per machine hour. The cost accountant for the Finishing Department has gathered the
following data:
Activity Cost Drivers Rate

Material
handling
Tons of material handled $ 80

Machine setups Number of production runs 3,750

Utilities Machine-hours 25

Quality control Number of inspections 500

During April, Mega purchased and used $100,000 of direct materials at $20 per ton. There were 8
production runs using a total of 12,000 machine-hours in April. The manager of the Finishing
Department needed 12 inspections. Actual overhead costs totaled $820,000 for the month.

How much overhead costs were applied to the Work-in-Process Inventory during April using
traditional costing?

A. $536,000
B. $720,000
C. $736,000
D. $820,000

7. Allure Company manufactures and distributes two products, M and XY. Overhead costs are
currently allocated using the number of units produced as the allocation base. The controller
has recommended changing to an activity-based costing (ABC) system. She has collected
the following information:
Activity Cost Driver Amount M XY

Production setups Number of setups $ 72,000 12 28

Material handling Number of parts 50,000 54 36

Packaging costs Number of units 355,000 108,00 72,000

0
 Activity Cost Driver Amount M XY

$ 477,000

What is the total overhead per unit allocated to Product XY using activity-based costing (ABC)?
Note: Do not round intermediate calculations; round your final answer to the nearest cent.

A. $1.69
B. $2.95
C. $2.65
D. $2.45

8. Allure Company manufactures and distributes two products, M and XY. Overhead costs are
currently allocated using the number of units produced as the allocation base. The controller
has recommended changing to an activity-based costing (ABC) system. She has collected
the following information:
Activity Cost Driver Amount M XY

Production
setups
Number of setups $ 73,000 12 28

Material handling Number of parts 42,000 72 18

Packaging costs Number of units 153,750 75,000 50,000

$ 268,750

What is the total overhead allocated to Product XY using the current system?

A. $121,000
B. $107,500
C. $147,750
D. $161,250
 9. Donnati Corporation has provided the following data from its activity-based costing system:
Activity Cost Pool Total Cost Total Activity

Assembly $ 383,180 23,000 machine-hours

Processing
orders
$ 50,798 1,100 orders

Inspection $ 106,110 1,620 inspection-hours

Data concerning one of the company's products, Product A43V, appear below:
Selling price per unit $ 124.60

Direct materials cost per unit $ 22.08

Direct labor cost per unit $ 45.77

Annual unit production and

sales
210

Annual machine-hours 320

Annual orders 80

Annual inspection-hours 10

According to the activity-based costing system, the product margin for Product A43V is:

A. $2,891.90.
B. $5,931.30.
C. $11,917.50.
D. $2,236.90.

10. Pinnocle Corporation has provided the following data from its activity-based costing system:
Activity Cost Pool Total Cost Total Activity

Assembly $ 1,114,920 57,000 machine-hours

Processing orders $ 47,016 1,800 orders

 Activity Cost Pool Total Cost Total Activity

Inspection $ 107,328 1,560 inspection-hours

The company makes 430 units of product S78N a year, requiring a total of 1,120 machine-hours, 40
orders, and 30 inspection-hours per year. The product's direct materials cost is $49.81 per unit and
its direct labor cost is $12.34 per unit. The product sells for $129.90 per unit.

According to the activity-based costing system, the product margin for product S78N is:

A. $4,116.50.
B. $29,132.50.
C. $6,180.50.
D. $5,161.30.

11. Vanguard Corporation has provided the following data from its activity-based costing system:
Activity Cost Pool Total Cost Total Activity

Assembly $ 942,480 66,000 machine-hours

Processing orders $ 85,050 1,800 orders

Inspection $ 126,854 1,820 inspection-hours

The company makes 430 units of product O37W a year, requiring a total of 690 machine-hours, 40
orders, and 10 inspection-hours per year. The product's direct materials cost is $35.72 per unit and
its direct labor cost is $29.46 per unit.

According to the activity-based costing system, the average cost of product O37W is closest to:

A. 94.11 per unit.

B. $89.72 per unit.
C. $65.18 per unit.
D. $92.49 per unit.

12. Banc Corporation Trust is considering either a bank-wide overhead rate or department
overhead rates to allocate $396,000 of indirect costs. The bank-wide rate could be based on
either direct labor-hours (DLH) or the number of loans processed. The departmental rates
would be based on direct labor-hours for Consumer Loans and a dual rate based on direct
labor-hours and the number of loans processed for Commercial Loans. The following
information was gathered for the upcoming period:
 Loans
Department DLH Processed Direct Costs

Consumer 14,000 700 $ 280,000

Commercia
l
8,000 300 $ 180,000

What is the overhead rate if Banc Corporation Trust allocates the indirect costs using direct labor-
hours?

A. $18 per hour

B. $396 per loan
C. $460 per loan
D. $20.91 per hour

13. Banc Corporation Trust is considering either a bank-wide overhead rate or department
overhead rates to allocate $396,000 of indirect costs. The bank-wide rate could be based on
either direct labor-hours (DLH) or the number of loans processed. The departmental rates
would be based on direct labor-hours for Consumer Loans and a dual rate based on direct
labor-hours and the number of loans processed for Commercial Loans. The following
information was gathered for the upcoming period:
Loans
Department DLH Processed Direct Costs

Consumer 14,000 700 $ 280,000

Commercia
l
8,000 300 $ 180,000

If Banc Corporation Trust uses a bank-wide rate based on the number of loans processed, what
would be the total costs for the Commercial Department?

A. $118,800
B. $180,000
C. $298,800
D. $318,000

14. Flawless Cosmetic Company manufactures and distributes several different products. The
company currently uses a plantwide allocation method for allocating overhead at a rate of $7
per direct labor-hour. Loren is the department manager of the Makeup Department that
produces Concealer (C) and Glow Cream (GC). Jennifer is the department manager of the
Hair Care Department that manufactures Shampoo (S). The product costs (per case of 24
bottles) and other information are as follows:
 Products

C GC S

Direct materials $ 100.00 $ 72.00 $ 48.00

Direct labor 42.00 31.50 12.00

Overhead 28.00 21.00 14.00

$ 170.00 $ 124.50 $ 74.00

Machine-hours 4 2 3

Number of cases (per

year)
300 500 600

If Flawless changes its allocation basis to machine-hours, what is the total product cost per case for
Product C?
Note: Do not round intermediate calculations.

A. $161.50
B. $169.30
C. $182.44
D. $183.36

Allocation basic: theo số lượng sản phẩm

Từ allocation basic, nhân ra tổng overhead để chia tổng machine-hour -> ra $ per machine-hour =
$6.825
15. Miracle Consulting Corporation has its headquarters in Chicago and operates from three
branch offices in Portland, Dallas, and Miami. Two of the company's activity cost pools are
General Service and Research Service. These costs are allocated to the three branch offices
using an activity-based costing system. Information for next year follows:
Activity Cost Pool Activity Measure Estimated Cost

General service % of time devoted to branch $ 830,000

Research service Computer time $ 229,440

Estimated branch data for next year is as follows:

% of time Computer time

Portlan
d
30% 226,000 minutes

Dallas 60% 176,000 minutes

 % of time Computer time

Miami 10% 76,000 minutes

How much of the headquarters cost allocation should the Dallas office expect to receive next year?

A. $345,000
B. $504,800
C. $582,480
D. $621,000

16. Cassidy Manufacturing Corporation has a traditional costing system in which it applies
manufacturing overhead to its products using a predetermined overhead rate based on direct
labor-hours (DLHs). The company has two products, VIP and Kommander, about which it
has provided the following data:
VIP Kommander

Direct materials per unit $ 27.50 $ 62.10

Direct labor per unit $ 15.60 $ 52.00

Direct labor-hours per

unit
0.60 2.00

Annual production 43,800 18,800

The company's estimated total manufacturing overhead for the year is $4,933,272 and the
company's estimated total direct labor-hours for the year is 63,880.

The company is considering using a variation of activity-based costing to determine its unit product
costs for external reports. Data for this proposed activity-based costing system appear below:
Activities and Activity Measures Estimated Overhead Cost

Assembling products (DLHs) $ 2,628,000

Preparing batches (batches) 642,312

 Activities and Activity Measures Estimated Overhead Cost

Product support (product

variations)
1,662,960

Total $ 4,933,272

Expected Activity

VIP Kommander Total

26,28
DLHs 37,600 63,880
0

Batches 1,838 1,406 3,244

Product variations 3,162 1,758 4,920

Unit overhead cost of Product Kommander under the activity-based costing system is closest to:

A. $383.65.
B. $128.69.
C. $342.46.
D. $213.77.

17. Upton Manufacturing Corporation has a traditional costing system in which it applies
manufacturing overhead to its products using a predetermined overhead rate based on direct
labor-hours (DLHs). The company has two products, Long and Short, about which it has
provided the following data:
Long Short

Direct materials per unit $ 14.20 $ 48.30

Direct labor per unit $ 16.80 $ 50.40

Direct labor-hours per unit 0.80 2.40

Annual production 45,000 10,000

The company's estimated total manufacturing overhead for the year is $3,170,400 and the
company's estimated total direct labor-hours for the year is 60,000.

The company is considering using a variation of activity-based costing to determine its unit product
costs for external reports. Data for this proposed activity-based costing system appear below:
 Activities and Activity
Measures Estimated Overhead Cost

Direct labor support (DLHs) $ 1,740,000

Setting up machines (setups) 422,400

Part administration (part types) 1,008,000

Total $ 3,170,400

Expected Activity

Long Short Total

DLHs 36,000 24,000 60,000

Setups 1,140 1,500 2,640

Part
types
900 2,460 3,360

Unit overhead cost of Product Short under the activity-based costing system is closest to:

A. $266.10.
B. $98.70.
C. $167.40.
D. $225.52.

18. Upton Manufacturing Corporation has a traditional costing system in which it applies
manufacturing overhead to its products using a predetermined overhead rate based on direct labor-
hours (DLHs). The company has two products, Long and Short, about which it has provided the
following data:
Long Short

Direct materials per unit $ 15.00 $ 48.80

Direct labor per unit $ 17.60 $ 51.20

Direct labor-hours per unit 0.80 2.40

Annual production 40,000 20,000

The company's estimated total manufacturing overhead for the year is $4,547,200 and the
company's estimated total direct labor-hours for the year is 80,000.
The company is considering using a variation of activity-based costing to determine its unit product
costs for external reports. Data for this proposed activity-based costing system appear below:
Activities and Activity
Measures Estimated Overhead Cost

Direct labor support (DLHs) $ 3,081,600

Setting up machines (setups) 441,600

Part administration (part types) 1,024,000

Total $ 4,547,200

Expected Activity

Long Short Total

DLHs 32,000 48,000 80,000

Setups 1,220 1,900 3,120

Part types 980 2,860 3,840

The unit product cost of product Long under the company's traditional costing system is closest to:

A. $63.42.
B. $78.07.
C. $92.45.
D. $32.60.

19. Markham Company makes two products: Basic Product and Deluxe Product. Annual
production and sales are 1,700 units of Basic Product and 1,100 units of Deluxe Product.
The company has traditionally used direct labor-hours as the basis for applying all
manufacturing overhead to products. Basic Product requires 0.3 direct labor-hours per unit
and Deluxe Product requires 0.6 direct labor-hours per unit. The total estimated overhead for
next period is $98,785.

The company is considering switching to an activity-based costing system for the purpose of
computing unit product costs for external reports. The new activity-based costing system would have
three overhead activity cost pools (Activity 1, Activity 2, and General Factory) with estimated
overhead costs and expected activity as follows:
Estimated Expected Activity

Activity Cost Pool Overhead Costs Basic Product Deluxe Product Total

Activity 1 $ 30,528 1,000 600 1,600

 Estimated Expected Activity

Activity Cost Pool Overhead Costs Basic Product Deluxe Product Total

Activity 2 17,385 1,700 200 1,900

General Factory 50,872 510 660 1,170

Total $ 98,785

(Note: The General Factory costs are allocated on the basis of direct labor-hours.)

The overhead cost per unit of Deluxe Product under the activity-based costing system is closest to:

A. $50.66.
B. $26.09.
C. $35.28.
D. $38.16.

20. Vanguard Corporation has provided the following data from its activity-based costing system:
Activity Cost Pool Total Cost Total Activity

Assembly $ 951,720 66,000 machine-hours

Processing orders $ 99,960 2,100 orders

Inspection $ 149,248 2,120 inspection-hours

The company makes 460 units of product O37W a year, requiring a total of 710 machine-hours, 30
orders, and 15 inspection-hours per year. The product's direct materials cost is $36.28 per unit and
its direct labor cost is $29.74 per unit.

According to the activity-based costing system, the average cost of product O37W is closest to:

A. $93.68 per unit.

B. $90.57 per unit.
C. $66.02 per unit.
D. $91.38 per unit.