1. Activity based costing for selling and administrative expenses can also be beneficial in allocating expenses to various products. Which of the following is the best allocation base for help desk costs?
a. Number of calls

b. Square footage of the help desk office
c. Number of products sold
d. Number of employees

2. A bank may decide to use activity-based costing to determine all of the following except:
a. the amounts charged to customers for services provided
b. service quality
c. profitability by services provided
d. all are correct

3. The Baffin Factory has determined that its budgeted factory overhead budget for the year is $7,750,000. They plan to produce 1,000,000 units. Budgeted direct labor hours are 500,000 and budgeted machine hours are 375,000. Using the single plant wide factory overhead rate based on direct labor hours, calculate the factory overhead rate for the year.
a. $15.50
b. $20.67
c. $7.75
d. $77.50

4. The Cunningham Factory has determined that its budgeted factory overhead budget for the year is $6,750,000 and budgeted direct labor hours are 5,000,000. If the actual direct labors for the period are 180,000 how much overhead would be allocated to the period?
a. $375,000
b. $133,333
c. $243,000
d. $180,000

5. Using multiple department factory overhead rates instead of a single plant wide factory overhead rate:
a. results in more accurate product costs
b. results in distorted product costs
c. is simpler and less expensive than a plant wide rate
d. applies overhead costs to all departments equally