GROUP 1
Is this statement true or false?
Traditional absorption costing assumes that overhead expenditure is related to direct labour hours, machine hours or production units.!
True
Is this statement true or false?
In absorption costing, both fixed and variable production overheads are charged to production.
True
Which of the following is NOT an advantage of activity-based costing?
a)It considers both production and non-production overheads
b)It helps managers understand what drives overhead costs
c)It can lead to a reduction in total overheads
d)It may be impossible to allocate all overheads to specific activities
d)It may be impossible to allocate all overheads to specific activities
Which of the following statement(s) is/are true regarding activity-based costing?
(1) A cost pool is an activity which consumes resources and for which overhead costs are identified and allocated.
(2) An activity-based costing overhead absorption rate (OAR) is calculated in the same way as an absorption costing OAR, and will result in the same OAR being calculated for each cost pool.
A (1) only
B (2) only
C Neither (1) nor (2)
D Both (1) and (2)
C Neither (1) nor (2)
An activity cost pool is $480,000 and the total cost-driver volume is 12,000. A product uses 150 units of the driver..
Using ABC, what overhead is charged to that product (in $, to the nearest $)?
$6000
An ABC cost pool is $360,000 with driver volume 9,000; a product uses 120 driver units..
What overhead is charged ($, nearest $)?
$4800
What amount would be charged to the product if;
Set up cost = $50,000
No. of Set ups = 100
Material Movement = $10,000
No. of movements =3,000
Material procured =$30,000
Purchase order issued = 500
Product takes 2 set-ups, 8 materials were procured while 150 material movements were done?
$1980
question
A product requires:
What amount of overhead would be charged to the product?
$3020