Question: 15 Assume a companys activity-based costing system includes three activities. The following information is available with respect to those activities: Activity Cost Pool Estimated Overhead
15
Assume a companys 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 | |
|---|---|---|---|
| Travel | $ 130,000 | 100,000 | miles driven |
| Deliveries | $ 110,000 | 2,200 | customer deliveries |
| Customer service | $ 220,000 | 10,000 | phone calls |
What is the activity rate for the Travel activity?
Multiple Choice
-
$1.13 per mile driven
-
$0.13 per mile driven
-
$1.30 per mile driven
-
$13.00 per mile driven
14
Assume a companys activity-based costing system includes three activities with the following activity rates:
| Activity Cost Pool | Activity Rate | |
|---|---|---|
| Travel | $ 2 | per mile driven |
| Deliveries | $ 65 | per delivery |
| Customer service | $ 22 | per phone call |
Two of the companys many customers include Customer A and Customer B. These two customers consumed the companys activities as follows:
| Total Expected Activity | ||
|---|---|---|
| Customer A | Customer B | |
| Travel (number of miles driven) | 300 | 250 |
| Deliveries (number of deliveries) | 15 | 7 |
| Customer service (number of phone calls) | 20 | 12 |
How much cost would be assigned from the Deliveries activity to Customer B?
Multiple Choice
-
$455
-
$1,410
-
$955
-
$14
13
Assume a service company has implemented an activity-based costing system with five activities as shown below:
| Activity Cost Pool (Activity Measure) | Total Cost | Total Activity | |
|---|---|---|---|
| Customer deliveries (Number of deliveries) | $ 400,000 | 8,000 | deliveries |
| Manual order processing (Number of manual orders) | $ 280,000 | 2,000 | manual orders |
| Electronic order processing (Number of electronic orders) | $ 150,000 | 15,000 | electronic orders |
| Line item picking (Number of line items picked) | $ 450,000 | 375,000 | line items |
| Other organization-sustaining costs (None) | $ 300,000 | ||
The company serves numerous customers, two of which include Hospital A and Hospital B. The activity demands pertaining to these two customers are as follows:
| Activity Measure | Activity | |
|---|---|---|
| Hospital A | Hospital B | |
| Number of deliveries | 10 | 25 |
| Number of manual orders | 0 | 35 |
| Number of electronic orders | 15 | 0 |
| Number of line items picked | 120 | 250 |
How much cost would be assigned from the Manual Order Processing activity to Hospital B?
Multiple Choice
-
$2,800
-
$284,900
-
$280,000
-
$4,900
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