10 MCQ Poodle Company manufactures two products

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Poodle Company manufactures two products, Mini A and Maxi B. Poodle’s overhead costs consist of setting up machines, $800,000; machining, $1,800,000; and inspecting, $600,000. Mini A is expected to use 15,000 direct labor hours and Maxi B is expected to use 25,000 direct labor hours.
Overhead applied to Maxi B using traditional costing using direct labor hours is
Question 1 options:
A) $1,670,000.
B) $2,000,000.
C) $1,280,000.
D) $1,536,000.

Question 2 (10 points)
Poodle Company manufactures two products, Mini A and Maxi B. Poodle’s overhead costs consist of setting up machines, $800,000; machining, $1,800,000; and inspecting, $600,000. Mini A is expected to use 600 machine setups, 24,000 machine hours, and 800 inspections. Maxi B is expected to use 400 machine setups, 26,000 machine hours, and 700 inspections.
Overhead applied to Mini A using activity-based costing is
Question 2 options:
A) $1,536,000.
B) $1,200,000.
C) $1,920,000.
D) $1,664,000.

Question 3 (10 points)
Poodle Company manufactures two products, Mini A and Maxi B. Poodle’s overhead costs consist of setting up machines, $800,000; machining, $1,800,000; and inspecting, $600,000. Mini A is expected to use 600 machine setups, 24,000 machine hours, and 800 inspections. Maxi B is expected to use 400 machine setups, 26,000 machine hours, and 700 inspections.
Overhead applied to Maxi B using activity-based costing?
Question 3 options:
A) $1,664,000.
B) $2,000,000.
C) $1,536,000.
D) $1,280,000.

Question 4 (10 points)
Which of the following factors would suggest a switch to activity-based costing?
Question 4 options:
A) Production managers use data provided by the existing system.
B) Product lines similar in volume and manufacturing complexity.
C) Overhead costs constitute a significant portion of total costs.
D) The manufacturing process has been stable.

Question 5 (10 points)
Which of the following is not a benefit of activity-based costing?
Question 5 options:
A) More accurate product costing
B) Better management decisions
C) Less costly to use
D) Enhanced control over overhead costs

Question 6 (10 points)
All of the following are examples of a value-added activity in a service company except
Question 6 options:
A) ordering supplies.
B) providing legal research for legal services.
C) performing surgery.
D) delivering packages by a delivery service.

Question 7 (10 points)
A well-designed activity-based costing system starts with
Question 7 options:
A) analyzing to activities performed to manufacture a product.
B) assigning manufacturing overhead costs for each activity cost pool to products.
C) computing the activity-based overhead rate.
D) identifying the activity-cost pools.

Question 8 (10 points)
Which of the following is not typical to traditional costing systems?
Question 8 options:
A) Use of a single predetermined overhead rate.
B) Use of direct labor hours or direct labor cost to assign overhead.
C) Assumption of correlation between direct labor and occurrence of overhead cost.
D) Use of multiple cost drivers to allocate overhead.

Question 9 (10 points)
Which would be an appropriate cost driver for the ordering and receiving activity cost pool?
Question 9 options:
A) Purchase orders
B) Inspections
C) Machine hours
D) Machine setups

Question 10 (10 points)
Poodle Company manufactures two products, Mini A and Maxi B. Poodle’s overhead costs consist of setting up machines, $800,000; machining, $1,800,000; and inspecting, $600,000. Mini A is expected to use 15,000 direct labor hours and Maxi B is expected to use 25,000 direct labor hours.
Overhead applied to Mini A using traditional costing using direct labor hours is
Question 10 options:
A) $1,200,000.
B) $1,920,000.
C) $1,670,000.
D) $1,536,000.

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