Multiple Choice (2 marks each) Select the best answer. Clearly indicate the answer selected. 1.Paul Company has two products: A and B. The company uses activity-based costing. The estimated total cost and expected activity for each of the company's three activity cost pools are as follows: Activity Estimated Expected Activity Cost Pool Cost Product A Product B Total Activity 1 $22.000 400 100 500 Activity 2 $16.240 380 200 580 Activity 3 $14,600 500 250 750 The activity rate under the activity-based costing system for Activity 3 is closest to which of the following? A) $19.47 B) $28.87 C) $58.40 D) $70.45 Use the following to answer questions 2-3: Escau Company is a wholesale distributor that uses activity-based costing for all of its overhead costs. The company has provided the following data concerning its annual overhead costs and its activity-based costing system: Overhead Costs: Wages and Salaries $380,000 Other Expenses $100,000 Total $480,000 Distribution of Resource Consumption: Use the following to answer questions 2-3: Escau Company is a wholesale distributor that uses activity-based costing for all of its overhead costs. The company has provided the following data concerning its annual overhead costs and its activity-based costing system: Overhead Costs: Wages and Salaries $380,000 Other Expenses $100,000 Total $480.000 Total 100% 100% Distribution of Resource Consumption: Activity Cost Pools Filling Customer Orders Support Other Wages and Salaries 30% 60% 10% Other Expenses 35% 45% 20% The "Other" activity cost pool consists of the costs of idle capacity and organization- sustaining costs. The activity measures for the activity cost pools for the year are as follows: Activity Cost Pool Activity Filling Orders 3,000 orders Customer Support 20 customers 2. What would be the activity rate for the Filling Orders activity cost pool? A) $48.00 B) $49.67 C) S52.00. D $56.00. 3. What would be the activity rate for the Customer Support activity cost pool? A) $10.800 B) $12,600 $13.650 D) $14.400. Use the following to answer questions 4-5: Monson Company has two products: G and P. The company uses activity-based costing and has prepared the following analysis, showing the estimated total cost and expected activity for each of its three activity cost pools: Activity Estimated Expected Activity Cost Pool Cost Product G Product P Total Activity 1 S30,000 200 400 600 Activity 2 S24.000 600 900 Activity 3 S80,000 400 3.600 4.000 The annual production and sales of Product G is 10.640 units. The annual production and sales of Product P is 26,600 4. The activity rate under the activity-based costing system for Activity 2 is closest to which of the following? A) $16.00 B) $21.97 C) $26.67 D) $89.33 1,500 5. The overhead cost per unit of Product Punder activity-based costing is closest to which of the following? A) S 4.00 B) S 6.88 C) S10.00. D) $30.16. The following information is to be used to answer questions b and A firm produces and sells two products, Alpha and Zeta. The following information is available relating to setup costs (a part of factory overhead): Product Alpha Product Zeta Units produced Batch size (units) Number of setups Direct labour hours per unit Total direct labour hours 250 10 25 3 750 20,000 500 40 3 60.000 Cost per setup $ 1.000 Total setup cost $ 65,000 6. With traditional allocation of setup overhead, using direct labour hours as the allocation base (driver), the setup cost portion of overhead allocated to each unit of product is (rounded to nearest cent): Product Alpha Product Zeta A) $ 1.07 $ 1.07 B) $267.49 $21,399.18 C) $ 3.21 $ 3.21 D) $260.00 S 3.25 E) $ 3.25 $ 3.25 7. Use of activity-based costing would allocate the following amounts of setup cost to each unit (rounded to nearest cent): A) B) C) D) Product Alpha $_3.21 $100.00 $130.00 $ 9.63 $40.00 Product Zeta $ 3.21 $ 2.00 $ 2.00 $ 9.63 S250 D) Focus