Select a letter A through D that corresponds to the description of that term. Some letters are used more than once.
A.
Uses more than one rate to allocate overhead costs to products.
B.
Uses only volume-based measures such as direct labor hours to allocate overhead costs to products.
C.
Typically uses the most overhead allocation rates.
D.
Focuses on the costs of carrying out activities.
Term
1.
Activity-based costing
2.
Plantwide overhead rate method
3.
Departmental overhead rate method
| Select a letter A through D that corresponds to the description of that term. Some letters are used more than once. |
| A. | Uses more than one rate to allocate overhead costs to products. |
| B. | Uses only volume-based measures such as direct labor hours to allocate overhead costs to products. |
| C. | Typically uses the most overhead allocation rates. |
| D. | Focuses on the costs of carrying out activities. |
| Term | ||
| 1. | Activity-based costing | |
| 2. | Plantwide overhead rate method | |
| 3. | Departmental overhead rate method |
Related questions
| 1. | Which costing method assumes all products use overhead costs in the same proportions? | ||||||||
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| 2. | Which of the following would usually not be used in computing plantwide overhead rates? | ||||||||
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| 3. | With ABC, overhead costs should be traced to which cost object first? | ||||||||
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Stewart Marketing Inc. manufactures two products, A andB. Presently, the company uses a single plant-wide factory overheadrate for allocating overhead to products. However, management isconsidering moving to a multiple department rate system forallocating overhead. From the following information, using a singleplant-wide rate, determine the overhead rate per unit for ProductA:
|
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A | B | |||
| Painting Dept. | $248,000 | 10,000 dlh | 16 dlh | 4 dlh |
| Finishing Dept. | 72,000 | 10,000 | 4 | 16 |
| Totals | $320,000 | 20,000 dlh | 20 dlh | 20 dlh |
======== | ========== | ====== | ====== | |
| $496.00 per unit |
| $320.00 per unit |
| $144.00 per unit |
| $640.00 per unit |
Stewart Marketing Inc. manufactures two products, A andB. Presently, the company uses a single plant-wide factory overheadrate for allocating overhead to products. However, management isconsidering moving to a multiple department rate system forallocating overhead. From the following information, using a singleplant-wide rate, determine the overhead rate per unit for ProductB:
| Overhead | Direct Labor Hours (dlh) | Product | ||
| A | B | |||
| Painting Dept. | $248,000 | 10,000 dlh | 16 dlh | 4 dlh |
| Finishing Dept. | 72,000 | 10,000 | 4 | 16 |
| Totals | $320,000 | 20,000 dlh | 20 dlh | 20 dlh |
| ======== | ========== | ====== | ====== | |
| $320.00 |
| $496.00 |
| $144.00 |
| $640.00 |
The single plantwide factory overhead rate is $52 perdirect labor hour. The company implements activity-based costingusing four different activity bases, including direct labor hours(and three others). What can be said about the direct labor rateunder activity-based costing relative to the single plantwiderate?
| The direct labor rate under activity-based costing will beequal to $52 per direct labor hour. |
| The direct labor rate under activity-based costing cannot becompared meaningfully to the $52 per direct labor hour rate. |
| The direct labor rate under activity-based costing must be lessthan $52 per direct labor hour. |
| The direct labor rate under activity-based costing must begreater than $52 per direct labor hour. |
The Nite Lite Factory produces two products - smalllamps and desk lamps. It has two separate departments - finishingand production. The overhead budget for the finishing department is$550,000, using 500,000 direct labor hours. The overhead budget forthe production department is $400,000 using 80,000 direct laborhours. If the budget estimates that a desk lamp will require 1hours of finishing and 2 hours of production, how much factoryoverhead will be allocated to each unit of desk lamps using themultiple production department factory overhead rate method with anallocation base of direct labor hours?
| $11.10 |
| $10.00 |
| $4.91 |
| $5.00 |
The Delph Company produces two products, Blinks andDinks. They are manufactured in two departments, Fabrication andassembly. Data for the products and departments are listedbelow.
| Product | Number of units | Labor hrs per unit | Machine hours per unit |
| Blinks | 1,000 | 4 | 5 |
| Dinks | 2,000 | 2 | 8 |
All of the Machine hours take place in the Fabricationdepartment, which has an estimated overhead of $84,000. All of thelabor hours take place in the Assembly department, which has anestimated total overhead of $72,000.
The Delph Company usesa departmental overheadrates. The fabrication department uses machinehours for an allocation base, and the assembly department useslabor hours. What is the overhead cost per unit forDinks?
| $64 |
| $44 |
| $56 |
| $50 |
