44. Indirect production costs do NOT include ________. A) property taxes on fact

Question

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

Explanation / Answer

44. Indirect production costs do NOT include ________.

So answer is d) wages of security guards at corporate headquarters

45) Machine setup rate = 180000/1500 = 120 per setup

Product A = 120*100 = 12000

Product B = 120*120 = 14400

So answer is A) $12,000 $14,400

46) Calculate unit cost for product B

so answer is c) $3.37

47) . In activity-based costing systems, the system first accumulates indirect costs for ________, and then assigns these costs to ________.

So answer is c) Activity; Cost object

Note : Please post rest questions as individual question because only first 4 question can be done in one time as per chegg guidelines

Direct material 25000 Direct labour 20000 Machine setup 14400 Materials Handling 6000 Electric Power 2000 Total cost 67400 Unit 20000 Unit cost 3.37

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