Managerial Accounting: CHPT 5 & 6

5. A process costing system is most likely used by which of the following?
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Direct material costs $3 per unit, direct labor costs $5 per unit, and overhead is applied at the rate of 100% of the direct labor cost. What is the value of the inventory transferred to the next department if beginning inventory was 2,000 units; 9,000 units were started; and 1,000 units were in ending inventory?
6. TyeDye Lights makes two products: Party and Holiday. It takes 80,900 direct labor hours to manufacture the Party Line and 93,500 direct labor hours to manufacture the Holiday Line. Overhead consists of $225,000 in the machine setup cost pool and $149,960 in the packaging cost pool. The machine setup pool has 52,000 setups for the Party product and 98,000 setups for the Holiday product. The packaging cost pool has 26,000 parts in the Party product and 39,200 parts for the Holiday product. Using the traditional cost method of direct labor hours, what is the predetermined overhead rate?
Overhead costs are assigned to each product based on ________.the proportion of that product's use of the cost driverWhich is the correct formula for computing the overhead rate?estimated overhead for the activity/estimated use of the cost driver for the activityA company calculated the predetermined overhead based on an estimated overhead of $70,000, and the activity for the cost driver was estimated as 2,500 hours. If product A utilized 1,350 hours and product B utilized 1,100 hours, what was the total amount of overhead assigned to the products?68600What is the proper order of tasks in an ABC system?identify the cost drivers, identify the cost pools, calculate the overhead application rate for each cost pool, assign the costs to the productsWhich statement is correct?Activity-based cost systems are more accurate than traditional cost systems.Activity-based costing is preferable in a system:with multiple, diverse productsUnder variable costing, a unit of product includes which costs?direct material, direct labor, and variable manufacturing overheadA downside to absorption costing is:that it is not well designed for cost-volume-profit analysisProduct costs under variable costing are typically:lower than under absorption costing5. T/F Administrative labor is a prime cost.FalseThe cost of direct labor is $275,000 if the conversion costs are $330,000 and manufacturing overhead is $275,000.FalseThere were 1,000 units in ending inventory after transferring 16,000 units to finished goods inventory. If the beginning inventory was 2,000 units, then 15,000 units were started in process.TrueIn a process cost system, factory depreciation expense incurred is debited to finished goods inventory.False6 T/F A company anticipates the cost to heat the building will be $21,000. Product A takes up 500 square feet of space, while Product B takes up 200 square feet. The activity rate per product using activity-based costing would be $11/square foot.FalseAbsorption costing is also referred to as variable costing.FalseA unit of product includes direct material, direct labor, and manufacturing overhead under absorption costing.True