- An activity cost pool is:
- A company produces numerous blends of coffee, two of which are known as the Irish Blend and the Columbian Blend. The company’s ABC system divides its total manufacturing overhead of $1,982,500 into four activity cost pools as shown below.
| Activity | Activity Measure | Expected Activity | Estimated Cost | |
| Purchasing | Purchase orders | 1,500 | orders | $ 330,000 |
| Materials handling | Number of setups | 1,800 | setups | $ 540,000 |
| Quality control | Number of batches | 600 | batches | $ 210,000 |
| Roasting | Roasting hours | 95,000 | hours | $ 902,500 |
Data regarding production of the Irish and Columbian blends is as follows:
| Irish Blend | Columbian Blend | |||
| Expected sales | 100,000 | pounds | 5,000 | pounds |
| Batch size | 10,000 | pounds | 1,250 | pounds |
| Setups | 3 | per batch | 3 | per batch |
| Purchase order size | 20,000 | pounds | 500 | pounds |
| Roasting time per 100 pounds | 0.5 | hours | 0.5 | hours |
- Assume the company uses activity-based costing. What is the activity rate for Quality Control?
Assume a company’s activity-based costing system includes three activities. The following information is available with respect to those activities:
| Activity Cost Pool | Estimated Overhead Cost | Expected Activity | |
| Testing | $ 150,000 | 100,000 | testing minutes |
| Setups | $ 116,600 | 2,200 | setup hours |
| Molding | $ 220,000 | 10,000 | machine hours |
What is the activity rate for the Setups activity?
- Assume a company’s activity-based costing system includes three activities with the following activity rates:
| Activity Cost Pool | Activity Rate | |
| Testing | $ 2 | per testing minute |
| Setups | $ 50 | per setup hour |
| Molding | $ 22 | per machine-hour |
Two of the company’s many products include Product A and Product B. These two products consumed the company’s activities as follows:
| Total Expected Activity | ||
| Product A | Product B | |
| Testing (number of testing minutes) | 280 | 250 |
| Setups (number of setup hours) | 15 | 5 |
| Molding (number of machine-hours) | 20 | 12 |
How much cost would be assigned from the Testing activity to Product A?
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- Which of the following statements is false with respect to job-order costing and process costing?
- Assume the following information:
| Milling Department | Materials | Conversion | Total |
| Cost of beginning work in process inventory | $ 10,000 | $ 15,000 | $ 25,000 |
| Costs added during the period | 290,000 | 388,500 | 678,500 |
| Total cost | $ 300,000 | $ 403,500 | $ 703,500 |
If the equivalent units of production for conversion is 5,000 units using the weighted-average method, then what is the cost per equivalent unit for conversion?
Note: Round your final answer to nearest whole dollar amount.
- Assume the following information:
| Milling Department | Units | Percent Complete | |
| Materials | Conversion | ||
| Beginning work in process inventory | 200 | 40% | 30% |
| Units started into production during March | 6,200 | ||
| Units completed during the period and transferred to the next department | 5,800 | 100% | 100% |
| Ending work in process inventory | 600 | 70% | 60% |
| Milling Department | Materials | Conversion |
| Cost of beginning work in process inventory | $ 10,000 | $ 15,000 |
| Costs added during the period | 296,000 | 385,000 |
| Total cost | $ 306,000 | $ 400,000 |
Using the weighted-average method, the total cost of the ending work in process inventory with respect to materials is closest to:
- Assume the following information:
| Milling Department | Materials | Conversion | Total |
| Cost of beginning work in process inventory | $ 10,000 | $ 15,000 | $ 25,000 |
| Costs added during the period | 291,600 | 389,000 | 680,600 |
| Total cost | $ 301,600 | $ 404,000 | $ 705,600 |
Assume the equivalent units of production for materials and conversion, when using the weighted-average method, are 5,200 units and 5,000 units, respectively. If the equivalent units in ending work in process inventory for materials and conversion are 400 units and 200 units, respectively, then what is the total cost of ending work in process for the Milling Department?
- Assume the following information for the Milling Department:
| Milling Department | Units |
| Beginning work in process inventory | 300 |
| Units started into production during the period | 6,000 |
| Units completed during the period and transferred to the next department | 5,710 |
| Ending work in process inventory | ?question mark |
Using the weighted-average method, how many units were in ending work in process inventory?
- Assume the following information:
| Milling Department | Units | Percent Complete | |
| Materials | Conversion | ||
| Beginning work in process inventory | 200 | 40% | 30% |
| Units started into production during March | 6,200 | ||
| Units completed during the period and transferred to the next department | 5,780 | 100% | 100% |
| Ending work in process inventory | 620 | 70% | 75% |
| Milling Department | Materials | Conversion |
| Cost of beginning work in process inventory | $ 10,000 | $ 15,000 |
| Costs added during the period | 290,000 | 385,000 |
| Total cost | $ 300,000 | $ 400,000 |
Using the weighted-average method, what is the equivalent units of production for conversion?Top of Form