What is the proper order of tasks in an ABC system? a.identify the cost pools, identify the cost drivers, calculate the overhead application rate for each cost pool, assign the costs to the products b.assign the costs to the products, identify the cost drivers, calculate the overhead application rate for each cost pool, identify the cost pools c.identify the cost drivers, identify the cost pools, calculate the overhead application rate for each cost pool, assign the costs to the products d.identify the cost drivers, assign the costs to the products, calculate the overhead application rate for each cost pool, identify the cost pools

What is the proper order of tasks in an ABC system? a.identify the cost pools, identify the cost drivers, calculate the overhead application rate for each cost pool, assign the costs to the products b.assign the costs to the products, identify the cost drivers, calculate the overhead application rate for each cost pool, identify the cost pools c.identify the cost drivers, identify the cost pools, calculate the overhead application rate for each cost pool, assign the costs to the products d.identify the cost drivers, assign the costs to the products, calculate the overhead application rate for each cost pool, identify the cost pools

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 10MC: What is the proper order of tasks In an ABC system? identify the cost drivers, assign the costs to...

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What is the proper order of tasks In an ABC system? identify the cost drivers, assign the costs to the products, calculate the overhead application rate for each cost pool, identify the cost pools assign the costs to the products, identify the cost drivers, calculate the overhead application rate for each cost pool, identify the cost pools identify the cost drivers, identify the cost pools, calculate the overhead application rate for each cost pool, assign the costs to the products identify the cost pools, identify the cost drivers, calculate the overhead application rate for each cost pool, assign the costs to the products
Identify appropriate cost drivers for these cost pools: A. setup cost pools B. assembly cost pool C. supervising cost pool D. testing cost pool
Customs has three cost pools and an associated cost driver to allocate the costs to the product. The cost pools, cost driver, estimated overhead, and estimated activity for the cost pool are: What is the predetermined overhead rate for each activity?
Frenchys has three cost pools and an associated cost driver to allocate the costs to the product. The cost pools, cost driver, estimated overhead, and estimated activity for the cost pool are: What is the predetermined overhead rate for each activity?
Which is the correct formula for computing the overhead rate? A. estimated use of the cost driver for production/estimated overhead for the activity B. estimated overhead for the product/estimated use of the cost driver for the activity C. estimated use of the cost driver for production/estimated overhead for the activity D. estimated overhead for the activity/estimated use of the cost driver for the activity
Match each of the following cost pools with the most appropriate cost allocation base and determine the overhead rates, using each allocation base only once:
What are the objectives of a cost management information system?
When is an activity-based costing system better than a traditional allocation system?
Identify appropriate cost drivers for these cost pools: A. material cost pool B. machine cost pooi C. painting cost pool D. maintenance cost pool
Activity-based management includes both process value analysis and activity-based costing. Which of the following features is primarily associated with process value analysis? a. Defining root causes of each activity b. Identifying cost objects and activity drivers c. Calculating activity rate d. Assigning costs to cost objects
Define and explain the two major subsystems of the cost management information system.
The following items are associated with a traditional cost accounting information system, an activity-based cost accounting information system, or both (that is, some elements are common to the two systems): a. Usage of direct materials b. Direct materials cost assigned to products using direct tracing c. Direct labor cost incurrence d. Direct labor cost assigned to products using direct tracing e. Setup cost incurrence f. Setup cost assigned using number of setups as the activity driver g. Setup cost assigned using direct labor hours as the activity driver h. Cost accounting personnel i. Submission of a bid, using product cost plus 25 percent j. Purchasing cost incurrence k. Purchasing cost assigned to products using direct labor hours as the activity driver l. Purchasing cost assigned to products using number of orders as the activity driver m. Materials handling cost incurrence n. Materials handling cost assigned using the number of moves as the activity driver o. Materials handling cost assigned using direct labor hours as the activity driver p. Computer q. Costing out of products r. Decision to continue making a part rather than buying it s. Printer t. Customer service cost incurred u. Customer service cost assigned to products using number of complaints as the activity driver v. Report detailing individual product costs w. Commission cost x. Commission cost assigned to products using units sold as the activity driver y. Plant depreciation z. Plant depreciation assigned to products using direct labor hours Required: 1. For each cost system, classify the relevant items into one of the following categories: a. Interrelated parts b. Processes c. Objectives d. Inputs e. Outputs f. User actions 2. Explain the choices that differ between the two systems. Which system will provide the best support for the user actions? Explain. 3. Draw an operational model that illustrates each cost accounting systemwith the items that belong to the system used as examples for each component of the model. 4. Based on the operational models, comment on the relative costs and benefits of the two systems. Which system should be chosen?