1. Emmette Corporation uses an activity-based costing system with three activity cost pools.

The company has provided the following data concerning its costs and its activity based
costing system:

How much cost, in total, would be allocated in the first-stage allocation to the Setting Up
activity cost pool?
A. $325,000
B. $312,000
C. $333,000
D. $429,000

Total Setting Up Cost:

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2. Stoudmire Corporation uses an activity-based costing system with three activity cost pools.
The company has provided the following data concerning its costs:

How much cost, in total, would be allocated in the first-stage allocation to the Order
Processing activity cost pool?
A. $462,000
B. $407,000
C. $396,000
D. $431,000

Total Order Processing Cost:

3. Jasmine Company uses activity-based costing. The company has two products: A and B.
The annual production and sales of Product A is 10,000 units and of Product B is 4,000 units.
There are three activity cost pools, with estimated total cost and expected activity as follows:

The activity-based costing cost per unit of Product A is closest to:

A. $6.00
B. $9.70
C. $1.50
D. $3.00

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Cost per unit = Total cost Number of units produced= $97,000 10,000 = $9.70

4. Activity rates from Hample Corporation's activity-based costing system are listed below.
The company uses the activity rates to assign overhead costs to products:

Last year, Product J27W involved 30 customer orders, 152 assembly hours, and 54 batches.
How much overhead cost would be assigned to Product J27W using the activity-based
costing system?
A. $24,702.12
B. $5,419.38
C. $4,634.28
D. $104.67

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5. Morsell Corporation has provided the following data from its activity-based costing
accounting system:

The "Other" activity cost pool consists of the costs of idle capacity and organization-
sustaining costs that are not assigned to products.

How much supervisory wages and factory supplies cost would be assigned to the Batch
Processing activity cost pool?
A. $286,000
B. $520,000
C. $284,000
D. $260,000

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6. Data concerning Sonderegger Company's operations last year appear below:

Required:

a. Prepare an income statement for the year using absorption costing.

b. Prepare a contribution format income statement for the year using variable costing.

c. Prepare a report reconciling the difference in net operating income between absorption and
variable costing for the year.

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a.

* $6 = $2.00 + $1.00 + $1.00 + $140,000/70,000

**$150,000 + 60,000 units x $1.50 per unit

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7. Przygocki Inc., which produces a single product, has provided the following data for its
most recent month of operation:

The company had no beginning or ending inventories.

Required:

Compute the unit product cost under absorption costing. Show your work!

8. . Daughdrill Corporation is developing direct labor standards. The basic direct labor wage
rate is $10.95 per hour. Employment taxes are 9% of the basic wage rate. Fringe benefits are
$4.00 per direct labor-hour. The standard rate per direct labor-hour should be:
A. $5.96
B. $4.99
C. $10.95
D. $15.94

9. Harnish Corporation is developing standards for its products. One product requires an
input that is purchased for $55.00 per kilogram from the supplier. By paying cash, the
company gets a discount of 8% off this purchase price. Shipping costs from the supplier's
warehouse amount to $5.17 per kilogram. Receiving costs are $0.28 per kilogram. Each unit
of output of the product requires 0.75 kilogram of this input. The allowance for waste and
spoilage is 0.04 kilogram of this input for each unit of output. The allowance for rejects is
0.11 kilogram of this input for each unit of output.

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a. The standard quantity in kilograms of this input per unit of output should be:
A. 0.75
B. 0.71
C. 0.90
D. 0.60

b. The standard price per kilogram of this input should be:

A. $55.00
B. $56.05
C. $53.95
D. $64.85

The Apoundright Company uses standard costing and has established the following standards
for its single product:

Direct materials: 2 gallons at $3 per gallon

Direct labor: 0.5 hours at $8 per hour
Variable overhead: 0.5 hours at $2 per hour

During November, the company made 4,000 units and incurred the following costs:

Direct materials purchased: 8,100 gallons at $3.10 per gallon

Direct materials used: 7,600 gallons
Direct labor used: 2,200 hours at $8.25 per hour
Actual variable overhead: $4,175

The company applies variable overhead to products on the basis of standard direct labor-
hours.

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10. The materials price variance for November was:
A. $2,310 U
B. $2,310 F
C. $810 U
D. $810 F

Materials price variance = AQ (AP - SP) = 8,100 ($3.10 - $3.00) = $810 U

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11. The materials quantity variance for November was:
A. $1,200 U
B. $1,200 F
C. $300 U
D. $1,500 F

SQ = 4,000 x 2 = 8,000
Materials quantity variance = SP (AQ - SQ) = $3 (7,600 - 8,000) = $1,200 F

12. The labor rate variance for November was:

A. $1,050 U
B. $550 U
C. $2,150 U
D. $2,150 F

Direct labor rate variance = AH (AR - SR) = 2,200 ($8.25 - $8.00) = $550 U

13. The labor efficiency variance for November was:

A. $1,050 U
B. $550 U
C. $1,600 F
D. $1,600 U

SH = 4,000 x 0.5 = 2,000

Direct labor efficiency variance = SR (AH - SH) = $8 (2,200 - 2,000) = $1,600 U

14. The total variable overhead variance (including both the rate and efficiency variances) for
November was:
A. $175 U
B. $225 F
C. $225 U
D. $400 U

SH = 4,000 x 0.5 = 2,000

Total variable overhead variance = (AH x AR) - (SR x SH)
= $4,175 - ($2 x 2,000) = $175 U

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 Lantagne Corporation keeps careful track of the time required to fill orders. Data concerning
a particular order appear below:

15. The throughput time was:

A. 20.3 hours
B. 25.2 hours
C. 4.9 hours
D. 12.1 hours

Throughput time = Process time + Inspection time + Move time + Queue time
= 1.9 hours + 0.2 hours + 2.8 hours + 7.2 hours = 12.1 hours

16. The manufacturing cycle efficiency (MCE) was closest to:

A. 0.24
B. 0.16
C. 0.92
D. 0.08

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Throughput time = Process time + Inspection time + Move time + Queue time
= 1.9 hours + 0.2 hours + 2.8 hours + 7.2 hours = 12.1 hours
MCE = Process time Throughput time
MCE = 1.9 12.1 = 0.16 (rounded)

17. The delivery cycle time was:

A. 10 hours
B. 2.8 hours
C. 25.2 hours
D. 23.1 hours

Throughput time = Process time + Inspection time + Move time + Queue time
= 1.9 hours + 0.2 hours + 2.8 hours + 7.2 hours = 12.1 hours
Delivery cycle time = Wait time + Throughput time
= 13.1 + 12.1 = 25.2 hours

The following materials standards have been established for a particular product:

The following data pertain to operations concerning the product for the last month:

18. What is the materials price variance for the month?

A. $3,420 F
B. $3,720 F
C. $3,720 U
D. $3,420 U

AP = $113,460 6,200 = $18.30

Materials price variance = AQ (AP - SP)
= 6,200 ($18.30 - $17.70) = $3,720 U

19. What is the materials quantity variance for the month?

A. $9,150 U
B. $8,850 U
C. $15,921 U
D. $15,399 U

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SQ = 700 x 6.9 = 4,830
Materials quantity variance = SP (AQ - SQ)
= $17.70 (5,700 - 4,830) = $15,399 U

20. Villella Memorial Diner is a charity supported by donations that provides free meals to
the homeless. The diner's budget for October was based on 3,800 meals. The diner's director
has provided the following cost formulas to use in budgets:

The director has also provided the diner's statement of actual expenses for the month:

Required:

Prepare a report showing the spending variances for each of the expenses and for total
expenses for October. Label each variance as favorable (F) or unfavorable (U).

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