1) An increase in inventory will result in _____ net operating income when using absorption costing as opposed to variable costing.
A. higher
B. equal
C. lower
2)
A manufacturing company uses an activity-based costing system with three activity cost pools. The company has provided the following data concerning its costs:
Costs:
Wages and salaries
$400,000
Depreciation
40,000
Occupancy
120,000
Total
$560,000
The distribution of resource consumption across the three activity cost pools is given below:
Activity Cost Pools
Order
Fabricating
Processing
Other
Total
Wages and salaries
80%
15%
5%
100%
Depreciation
70%
25%
5%
100%
Occupancy
40%
50%
10%
100%
How much cost, in total, would be allocated in the first-stage allocation to the Order Processing cost pool?
A. $186,667
B. $280,000
C. $130,000
D. $84,000
1) An increase in inventory will result in _____ net operating income when using absorption costing as opposed to variable costing.
| A. | higher | |
| B. | equal | |
| C. | lower |
2)
A manufacturing company uses an activity-based costing system with three activity cost pools. The company has provided the following data concerning its costs:
| Costs: | |
| Wages and salaries | $400,000 |
| Depreciation | 40,000 |
| Occupancy | 120,000 |
| Total | $560,000 |
The distribution of resource consumption across the three activity cost pools is given below:
| Activity Cost Pools | ||||
| Order | ||||
| Fabricating | Processing | Other | Total | |
| Wages and salaries | 80% | 15% | 5% | 100% |
| Depreciation | 70% | 25% | 5% | 100% |
| Occupancy | 40% | 50% | 10% | 100% |
How much cost, in total, would be allocated in the first-stage allocation to the Order Processing cost pool?
| A. | $186,667 | |
| B. | $280,000 | |
| C. | $130,000 | |
| D. | $84,000 |
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Related questions
Agouti Legal Corp, a law firm, uses an activity-based costing inwhich there are three activity cost pools. The company has providedthe following data concerning its costs and its activity basedcosting system:
Costs:
Wages and salaries | $ 275,000 |
Travel expenses | 50,000 |
Other expenses | 125,000 |
Total | $ 450,000 |
Distribution of resource consumption:
Activity Cost Pools | ||||
Working on | Business | |||
Engagements | Development | Other | Total | |
Wages and salaries | 80% | 15% | 5% | 100% |
Travel expenses | 75% | 20% | 5% | 100% |
Other expenses | 10% | 35% | 55% | 100% |
Required:
a. How much cost, in total, would be allocated to the Working OnEngagements activity cost pool?
b. How much cost, in total, would be allocated to the BusinessDevelopment activity cost pool?
c. How much cost, in total, would be allocated to the Otheractivity cost pool?
You must show your calculations.
Agouti Legal Corp, a law firm, uses an activity-based costing inwhich there are three activity cost pools. The company has providedthe following data concerning its costs and its activity basedcosting system:
Costs:
Wages and salaries | $ 275,000 |
Travel expenses | 50,000 |
Other expenses | 125,000 |
Total | $ 450,000 |
Distribution of resource consumption:
Activity Cost Pools | ||||
Working on | Business | |||
Engagements | Development | Other | Total | |
Wages and salaries | 80% | 15% | 5% | 100% |
Travel expenses | 75% | 20% | 5% | 100% |
Other expenses | 10% | 35% | 55% | 100% |
Required:
a. How much cost, in total, would be allocated to the Working OnEngagements activity cost pool?
b. How much cost, in total, would be allocated to the BusinessDevelopment activity cost pool?
c. How much cost, in total, would be allocated to the Otheractivity cost pool?
You must show your calculations.
IF YOU DO NOT SHOW YOUR CALCULATIONS I WILL MARK ITINCOMPLETE!!!!!! don't have to be a lot, just show me how you didit
