44. Indirect production costs do NOT include ________. A) property taxes on factory building B) rent expense on factory building C) wages of forklift truck operators in assembly area D) wages of security guards at corporate headquarters

45. Busy Company has identified the following activities related to indirect production costs:

Activity Activity Costs Cost Drivers Machine Setup $180,000 1,500 setup hours Materials Handling $50,000 12,500 pounds of materials Electric Power $20,000 20,000 kilowatt hours

Busy Company has obtained the following data concerning two products: Product 1 Product 2 Number of units produced 4,000 20,000 Direct materials cost $20,000 $25,000 Direct labor cost $12,000 $20,000 Number of setup hours 100 120 Pounds of materials used 500 1,500 Kilowatt-hours 1,000 2,000

Using activity-based costing, what amount of machine setup cost is assigned to Products 1 and 2? Product 1 Product 2 A) $12,000 $14,400 B) $30,000 $150,000 C) $50,000 $130,000 D) $81,818 $98,182

46. Lifetime Company has identified the following activities related to indirect production costs:

Activity Activity Costs Cost Drivers Machine Setup $180,000 1,500 setup hours Materials Handling $50,000 12,500 pounds of materials Electric Power $20,000 20,000 kilowatt hours

Lifetime Company has obtained the following data concerning two products: Product A Product B Number of units produced 4,000 20,000 Direct materials cost $20,000 $25,000 Direct labor cost $12,000 $20,000 Number of setup hours 100 120 Pounds of materials used 500 1,500 Kilowatt-hours 1,000 2,000

Using activity-based costing, what is the total production cost per unit for Product B? A) $3.00 per unit B) $3.25 per unit C) $3.37 per unit D) $3.73 per unit

47. In activity-based costing systems, the system first accumulates indirect costs for ________, and then assigns these costs to ________. A) products; departments B) products; territories C) activities; cost objects D) cost objects; types of customers

48. In two-stage activity-based costing systems, the cost objects in the first stage are ________ and the cost objects in the second stage are ________. A) resources; departments B) activities; products or services C) departments; products or services D) departments; territories

49. ________ is a name for a system that first accumulates indirect resource costs for each of the activities of an organization and then assigns the cost of each activity to the cost objects that require that activity.

A) Activity-based management B) Activity-based cost allocation C) Activity-based costing D) Cost accounting

50. Slocum Company has determined the following information about a new product. The manufacturing process used for the product is very complex and it has a higher proportion of indirect costs than direct costs. The company wants a 100% markup on cost. The following data is available:

Product cost according to traditional costing system $4.00 per unit Product cost according to activity-based costing system $7.00 per unit

What price per unit should Slocum Company use for this new product? A) $4.00 B) $7.00 C) $8.00 D) $14.00