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BA 213 Practice Exam

Terms in this set (11)

When designing an activity-based costing system, related activities are frequentlycombined to reduce the amount of detail and record-keeping cos
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An activity cost pool in activity-based costing is a "cost bucket" in which costs related toa particular activity measure are accumulated
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Departmental overhead rates applied on the basis of a single activity measure willeliminate any distortions in unit costs due to product diversity.
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When raw materials are purchased, they are recorded as an asset
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The absorption cost approach provides for the absorption of all manufacturing costs,fixed and variable, into units of product.
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A department's overhead costs are generally caused by a variety of factors including therange of products processed in the department, the number of batch set-ups that arerequired, and the complexity of the products.
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The following entry would be used to record depreciation on manufacturing equipment:
Manufacturing Overhead XXX Accumulated Depreciation XXX
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If a company closes any underapplied or overapplied manufacturing overhead to the Costof Goods Sold account, then Cost of Goods Sold will be debited if manufacturingoverhead is overapplied for the period.
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A credit balance in the Manufacturing Overhead account at the end of the year meansthat manufacturing overhead was overapplied.
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The entire difference between the actual manufacturing overhead cost for a period and the applied manufacturing overhead cost is typically closed to the Work In Process account.
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Deveney, Inc., manufactures and sells two products: Product C7 and Product E9. Data concerningthe expected production of each product and the expected total direct labor-hours (DLHs) requiredto produce that output appear below:ExpectedProductionDirectLabor-HoursPer UnitTotal DirectLabor-HoursProduct C7 1,000 6.0 6,000Product E9 800 7.0 5,600Total direct labor-hours 11,600
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