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1. Ext r e meMa nuf a c t ur i ngCompa nypr ovi de st hef ol l o wi ngABCc os t i ngi nf or ma t i on: Ac t i vi t i es Tot alCos t s Ac c ounti nqui r y $ 39 0, 00 0 Ac c ountbi l l i ng $ 27 5, 00 0 Ac c ountve r i fic a t i onac c ount s $ 13 0, 50 0 Cor r e s ponde nc el e t t e r s $ 22 , 000 Tot a lc os t s $ 81 7, 50 0

Ac t i vi t yc os tdr i ver s 1 3, 0 00hour s 5 , 00 0, 00 0l i ne s 6 0, 0 00a c c ount s 4, 0 00l e t t e r s

Theaboveac t i vi t i e sa r eus e dbyDe pa r t ment sAa ndBa sf ol l ows : Depar t me ntA Depar t me ntB Ac c ounti nqui r yhour s 2 , 50 0hour s 4 , 00 0hour s Ac c ountbi l l i ngl i ne s 8 00 , 000l i ne s 6 50 , 000l i ne s Ac c ountve r i fic a t i onac c ount s 9 , 00 0a c c ount s 7 , 00 0ac c ount s Cor r e s ponde nc el e t t e r s 2 , 00 0l e t t e r s 2 , 40 0l e t t e r s How muc hofc or r e s ponde nc ec os t swi l lbeas s i gne dt oDe par t me ntA? A)$2 2, 0 00 B)$ 49 , 500 C)$1 1, 0 00 D)$ 11 , 24 2 Ans we r :C Expl ana t i on:Cor r e s ponde nc ec os t s-De par t me ntA=( $2 2, 0 00÷4, 0 00 )×2, 0 00=$ 11, 0 00

2. Col umbusCompanypr ovi de st hef ol l owi ngABCc os t i ngi nf or ma t i on: Ac t i vi t i es La bor Gas I nvoi c e s Tot a lc os t s

Tot a lCos t s $ 33 6, 00 0 hour s $ 84 , 000 gal l ons $ 18 0, 00 0 i nvoi c e s $ 60 0, 00 0

Ac t i vi t yc os tdr i ver s 8, 0 00 7 , 00 0 7 , 50 0

Theaboveac t i vi t i e sus e dbyt he i rt hr e ede par t me nt sa r e :

La bor Gas I nvoi c e s

La wnDepar t ment Bus hDepar t ment Pl owi ngDepa r t ment 3, 1 00 hour s1 , 50 0 hour s 3 , 40 0hour s 1 , 90 0 gal l ons90 0 gal l ons 4 , 200ga l l ons 1, 3 00 i nvoi c e s4 00 i nvoi c e s 5 , 80 0i nvoi c e s

I fl aborhour sa r eus e dt oal l oc a t et henonl abor ,ove r he adc os t s ,wha ti st heove r he a da l l oc a t i onr a t e ? A)$7 5. 0 0pe rhour B)$ 26 . 67pe rhour

C)$4 2. 0 0pe rhour D)$ 33 . 00pe rhour Ans we r :D Expl ana t i on:Ove r he ada l l oc a t i onr a t e=( $8 4, 0 00+$1 80 , 00 0)÷8 , 00 0=$ 33 . 00

3. Mi l a nCompanyhasi de nt i fie dt hr e ec os tpool st oal l oc a t eo ve r he adc os t s .Thef ol l owi nge s t i ma t e sa r e pr ovi de df ort hec omi ngye a r : Cos tPool Supe r vi s i onofdi r e c tl abor Ma c hi nemai nt e nanc e Fa c i l i t yr e nt Tot a love r he a dc os t s

Over he adCos t s $6 24 , 000 $ 10 0, 00 0 $ 21 6, 00 0 $ 94 0, 00 0

Cos tdr i ver Di r e c tl abor hour s Mac hi ne hour s Squar ef e e tofa r e a

Ac t i vi t yl e ve l 9 40 , 000 8 40 , 000 1 40 , 000

Theac c ount i ngr e c or dss how t heMos s manJ obc ons ume dt hef ol l owi ngr e s our c e s : Cos tdr i ver Di r e c tl abor hour s Ma c hi ne hour s Squa r ef e e tofar e a

Ac t uall eve l 2 90 1, 6 81 . 68 5 0

Unde rac t i vi t ybas e dc os t i ng,wha ti st hea mountofmac hi nemai nt e nanc ec os t sa l l oc a t e dt ot heMos s man J ob?( Donotr oundanyi nt e r me di ar yc a l c ul a t i ons . ) A)$1 , 88 1. 8 8 B)$ 20 0. 20 C)$1 , 68 1. 6 8 D)$ 21 0. 4 5 Ans we r :B Expl ana t i on:Mac hi nemai nt e na nc ec os t s=1, 6 81 . 68mh×( $ 100 , 00 0÷84 0, 0 00)=$2 00 . 20

4. Da r t mout hCor por a t i onmanuf a c t ur e st womode l sofoffic ec ha i r s , as t andar dandade l ux emode l . The f ol l owi ngac t i vi t ya ndc os ti nf or ma t i onha sbe e nc ompi l e d:

Pr oduc t St andar d De l ux e Ove r he adc os t s

Numbe rof Se t ups 1 8 3 2

Numbe rof Component s 9 14

$ 75 , 000

$ 87 , 400

Numbe rof Di r ec tLa borHour s 2 75 2 15

Numbe rofs e t upsa ndnumbe rofc ompone nt sa r ei de nt i fie dasa c t i vi t yc os tdr i ve r sf orove r he ad. As s umi nga nac t i vi t ybas e dc os t i ngs ys t e mi sus e d,wha ti st het ot alamountofo ve r he adc os t sas s i gne dt o t hes t andar dmode l ? A)$8 1, 2 00 B)$ 81 , 900 C)$6 1, 2 00 D)$ 10 1, 2 00 Ans we r :C

Expl ana t i on:Se t ups :$ 75 , 00 0÷( 1 8+3 2)=$1 , 50 0 Compone nt s :$8 7, 4 00÷( 9+14 )=$ 3, 8 00 Tot a lamountofove r he adc os t s=( $ 1, 5 00×18 )+( $ 3, 80 0×9)=$6 1, 2 00

5. Nor t hSt r e e tCor por a t i onmanuf a c t ur e st womode l sofmot or i ze dgoc ar t s , as t a nda r dandade l uxe mode l .Thef ol l owi nga c t i vi t ya ndc os ti nf or ma t i onhasbe e nc ompi l e d:

Pr oduc t St andar d De l ux e Ove r he adc os t s

Numberof Se t ups 1 7 3 3

Numberof Component s 7 12

$ 16 , 000

$ 18 , 050

Numberof Di r ec tLaborHour s 7 20 4 1 0

Numbe rofs e t upsa ndnumbe rofc ompone nt sa r ei de nt i fie dasa c t i vi t yc os tdr i ve r sf orove r he ad. As s umi nga nac t i vi t ybas e dc os t i ngs ys t e mi sus e d,wha ti st het ot alamountofo ve r he adc os tas s i gne dt o t hede l ux emode l ? A)$2 1, 9 60 B)$ 17 , 025 C)$1 6, 8 40 D)$ 17 , 21 0 Ans we r :A Expl ana t i on:Se t ups :1 6, 0 00÷( 17+33 )=$3 20 Compone nt s :$1 8, 0 50÷( 7+12 )=$ 95 0 Tot a lamountofove r he adc os t=( $ 32 0×33 )+( $ 95 0×12 )=$2 1, 9 60

6. Ti ge rPr i depr oduc e st wopr oduc tl i ne s :Ts hi r t sa ndS we a t s hi r t s .Pr oduc tpr ofit a bi l i t yi sanal yze da s f ol l ows :

Pr oduc t i onands al e svol ume

TSHI RTS 72, 0 00uni t s

SWEATSHI RTS 2 6, 2 50uni t s

Se l l i ngpr i c e Di r e c tma t e r i al Di r e c tl abor Ma nuf a c t ur i ngove r he ad Gr os spr ofit Se l l i nganda dmi ni s t r a t i ve Ope r a t i ngpr ofit

$ 15 . 00 $1. 5 0 $ 4. 2 0 $ 1 . 80 $7. 5 0 $ 3. 6 0 $ 3. 9 0

$ 29 . 00 $5. 0 0 $7 . 20 $3. 0 0 $1 3. 8 0 $7 . 00 $6 . 80

Ti ge rPr i de ' smana ge r sha vede c i de dt or e vi s et he i rc ur r e ntas s i gnme ntofove r he adc os t st or e fle c tt he f ol l owi ngABCc os ti nf or ma t i on: Ac t i vi t y Supe r vi s i on I ns pe c t i on

Ac t i vi t yc os t $ 10 8, 48 0 $ 93, 00 0

Ac t i vi t yc os tdr i ver Di r e c tl aborhour s( DLH) I ns pe c t i ons

Ac t i vi t i esde ma nded TSHI RTS SWEATSHI RTS 0 . 75DLH/uni t 1 . 60DLH/uni t 5 4, 0 00DLHs 4 2, 00 0DLHs 6 0, 0 00i ns pe c t i ons 1 7, 5 00i ns pe c t i ons Unde rt her e vi s e dABCs ys t e m,t ot a love r he a dc os t sa l l oc a t e dt oS we a t s hi r t swi l lbe__ __ __ __ .

A)$4 7, 460 B)$ 68 , 460 C)$2 01 , 48 0 D)Noneoft he s eans we r sar ec or r e c t . Ans we r :B Expl ana t i on:$9 3, 00 0/( 6 0, 0 00i ns pe c t i ons+17, 50 0i ns pe c t i ons )=$ 1. 2 0pe ri ns pe c t i on×17 , 50 0=$ 21 , 00 0 pl us $ 10 8, 48 0/( 54 , 00 0dl h+42 , 00 0dl h)=$ 1. 13pe rdl h×42 , 00 0dl h=$4 7, 4 60; $ 21 , 000+$4 7, 46 0=$68 , 46 0

7. Ca nt onCor p.manuf a c t ur e st wos i ze sofc e r a mi cpape r we i ght s ,r e gul arandj umbo.Thef ol l owi ng i nf or ma t i ona ppl i e st ot he i re xpe c t a t i onsf ort hepl anni ngpe r i od: Cos tPool Over he adCos t s Ma t e r i a l shandl i ng $ 46 , 000 Ma c hi nemai nt e nanc e $ 31 0, 0 00 Se t ups $ 26 1, 00 0 I ns pe c t i ons $ 13 2, 37 0 Tot a ls uppor tc os t s $ 7 49, 37 0

Ac t i vi t yc os tdr i ver 9 4, 0 00or de r s 20 , 00 0ma i nt e na nc ehour s 45 , 000s e t ups 21 , 700i ns pe c t i ons

Pr oduc t i onEs t i mat es Pr oduc t i onuni t s : Re gul ar =8 , 00 0, 0 00uni t s J umbo =1 6, 0 00 , 000uni t s Ma c hi ne hour s =5 00 , 00 0mh La bor hour s =1, 00 0, 0 00dl h Expe c t e ddi r e c tc os t sa mount st o$9 42, 00 0f ort hepe r i od.Suppor tc os tr e qui r e me nt sofbot hpr oduc t sar e s ubs t ant i al l ydi ffe r e ntf r om oneanot he r .Ca nt onus e sanABCc os t i ngs ys t e m. Thes e t upsac t i vi t yc os tdr i ve rr a t ei s__ __ __ __ . A)$6 . 10pe rs e t up B)$ 5. 8 0pe rs e t up C)$4 . 15pe rs e t up D)$ 15 . 50pe rs e t up Ans we r :B Expl ana t i on:Se t upsac t i vi t yc os tdr i ve rr a t e=$2 61 , 00 0÷45 , 00 0s e t ups=$5 . 80pe rs e t up 1 . For20 18 ,Re s t We l lBe ddi ngus e smac hi ne hour sa st heonl yove r he a dc os t a l l oc a t i onba s e .Thedi r e c tc os t r a t ei s$6 . 00pe runi t . Thes e l l i ngpr i c eoft hepr oduc ti s$2 1. 0 0.Thee s t i ma t e dmanuf a c t ur i ngove r he ad c os t sar e$ 27 5, 00 0ande s t i ma t e d40 , 00 0mac hi nehour s . Thea c t ualmanuf a c t ur i ngove r he adc os t sar e $ 35 0, 00 0anda c t ualmac hi nehour sar e5 0, 0 00 . Us i ngj obc os t i ng, t he2 018a c t uali ndi r e c t c os tr a t ei s__ __ __ __ . A)$7 . 00pe rmac hi ne hour B)$ 5. 5 0pe rmac hi ne hour C)$8 . 75pe rma c hi ne hour D)$ 8. 5 0pe rmac hi ne hour Ans we r :A Expl ana t i on:$3 50 , 00 0/50 , 000mh=$7 . 00

2. Be t t e rPr oduc t sCompanymanuf a c t ur e si ns ul a t i onanda ppl i e smanuf a c t ur i ngove r he adc os t st o pr oduc t i ona tabudge t e di ndi r e c t c os tr a t eof$1 8pe rdi r e c tl abor hour .Thef ol l owi ngda t aa r eobt ai ne d f r om t heac c ount i ngr e c or dsf orOc t obe r20 18 : Di r e c tma t e r i al s Di r e c tl abor( 3 , 30 0hour s@$1 7/hour ) I ndi r e c tl abor Pl antf a c i l i t yr e nt De pr ec i a t i ononpl antmac hi ne r yande qui pme nt Sa l e sc ommi s s i ons Admi ni s t r a t i vee xpe ns e s

$ 37 0, 00 0 5 6, 1 00 2 2, 0 00 5 3, 0 00 4 1, 0 00 1 7, 0 00 2 9, 0 00

Theac t uala mountofmanuf ac t ur i ngove r he adc os t si nc ur r e di nOc t obe r20 18t ot a l s___ __ __ _. A)$2 77 , 50 0 B)$ 11 6, 00 0 C)$1 62 , 00 0 D)$ 12 3, 0 00 Ans we r :B

Expl ana t i on: $ 22 , 000+$5 3, 00 0+$41 , 00 0=$1 16 , 00 0

3. Fr a nc i sandHar t l e yLa w Offic ee mpl oys12f ul l t i mea t t or ne ysand10par a pr of e s s i ona l s . Di r e c ta nd i ndi r e c tc os t sar eappl i e donapr of e s s i ona ll a bor hourba s i st ha ti nc l ude sbot ha t t or ne yand par apr of e s s i onalhour s .Fol l owi ngi si nf or ma t i onf or20 18 :

I ndi r e c tc os t s Annua ls a l ar yofe ac ha t t or ne y Annua ls a l ar yofe ac hpa r apr of e s s i onal Tot a lpr of e s s i onall abor hour s dl h dl h

Budget $2 70 , 00 0 $10 0, 00 0 $ 29 , 000 5 0, 0 00 60 , 00 0

Ac t ua l $3 00 , 00 0 $1 10 , 00 0 $ 30 , 000

How muc hs houl dt hec l i e ntbebi l l e di nanac t ualc os t i ngs ys t e mi f22 0pr of e s s i ona ll abor hour sar eus e d? A)$5 , 94 0 B)$ 7, 7 44 C)$8 , 22 8 D)$ 7, 0 40 Ans we r :D Expl ana t i on:[ ( $ 11 0, 00 0×12 )+( $ 30 , 00 0×10) ]/60 , 00 0×22 0= $ 5, 9 40 +$ 30 0, 0 00/60 , 00 0×22 0 = $1 , 100 =7 , 04 0

4. Ra l l yCompanymanuf ac t ur e sgar a ges t or a ges ys t e msf orhome owner s .I tus e sanor malc os t i ngs ys t e m wi t ht wodi r e c tc os tc a t e gor i e s-di r e c tma t e r i al sa nddi r e c tl abor-anonei ndi r e c t c os tpool , ma nuf a c t ur i ngove r he adc os t s . For20 18 : Budge t e dmanuf ac t ur i ngove r he adc os t s$1 , 00 0, 00 0 Budge t e dmanuf ac t ur i ngl abor hour s20 , 00 0hour s Ac t ualmanuf a c t ur i ngove r he a dc os t s$1 , 10 0, 000 Ac t ualdi r e c tma nuf a c t ur i ngl abor hour s2 2, 0 00 Ac t ualdi r e c tma t e r i alc os t s$10 , 00 0 Ac t ualdi r e c tma nuf a c t ur i ngl aborhour s2 00 Ac t ualdi r e c tma nuf a c t ur i ngl aborr a t e$2 0pe rhour Re qui r ed: Ca l c ul a t et het ot a lmanuf a c t ur i ngc os t sus i ngnor malc os t i ng. Ans we r :$24,000 = $10,000 + (200 x $20) + (200 x $50)

5. For20 18 ,Fr ankl i nManuf ac t ur i ngus e sma c hi ne hour sa st heonl yove r he adc os t a l l oc a t i onba s e .The e s t i ma t e dmanuf a c t ur i ngove r he adc os t sa r e$3 40, 00 0a nde s t i ma t e dmac hi nehour sar e40 , 00 0.Theac t ual

ma nuf a c t ur i ngove r he adc os t sar e$4 50, 00 0a ndac t ualma c hi nehour sar e50 , 00 0.Wha ti st hedi ffe r e nc e be t we e nt hebudge t e da ndt heac t ualmanuf a c t ur i ngove r he a dus i ngj obc os t i ng?( Roundi nt e r i m andt he fina lans we rt ot hene ar e s tc e nt . ) A)$2 . 75 B)$ 2. 2 0 C)$0 . 50 D)$ 2. 2 5 Ans we r :C Expl ana t i on:Budge t e dmanuf ac t ur i ngove r he adr a t e :$3 40 , 00 0/4 0, 00 0mh=$8 . 50pe rmac hi ne hour Ac t ualmanuf a c t ur i ngove r he a di s$4 50 , 00 0/50 , 00 0=$ 9. 0 0pe rmac hi nehour . Di ffe r e nc ei s$9 . 00-$8 . 50=$0 . 50

6. SkyHi ghCompa nyhast wode pa r t me nt s , XandY. Thef ol l owi nge s t i ma t e sa r ef ort hec omi ngye ar :

Di r e c tmanuf a c t ur i ngl a bor hour s Ma c hi ne hour s Ma nuf a c t ur i ngove r he a d

X

Y

2 0, 0 00 3 0, 0 00 $ 30 0, 00 0

30 , 00 0 20 , 00 0 $ 330 , 00 0

Thebudge t e di ndi r e c t c os tdr i ve rr a t ef orYbas e dont henumbe rofmac hi ne hour si si ne x c e s sofXby _ __ ___ __ .( Roundi nt e r i m andt hefina lans we rt ot hene ar e s tc e nt . ) A)$6 . 50pe rmac hi ne hour B)$ 21 . 50pe rmac hi nehour C)$1 . 50pe rma c hi ne hour D)$ 16 . 50pe rmac hi ne hour Ans we r :A Expl ana t i on:X=$ 30 0, 0 00/30 , 000mh=$1 0. 00 Y=$ 33 0, 0 00/20 , 00 0mh=$1 6. 50 ;Ex c e s s=$1 6. 5 0−$ 10 . 00=$6 . 50

7. La nc e l otMa nuf a c t ur i ngi sas ma l lt e xt i l emanuf a c t ur e rus i ngmac hi nehour sast hes i ngl ei ndi r e c t c os t r a t et oal l oc a t emanuf ac t ur i ngove r he adc os t st ot hevar i ousj obsc ont r a c t e ddur i ngt heye a r .Thef ol l owi ng e s t i ma t e sa r epr ovi de df ort hec omi ngye a rf ort hec ompa nya ndf ort heCas eHi ghSc hoolbandj ac ke tj ob.

Di r e c tma t e r i al s Di r e c tl abor Ma nuf a c t ur i ngove r he a dc os t s Ma c hi ne hour s mh mh

Company Cas eHi ghSc hoolJ ob $ 60 , 000 $ 2, 4 00 $ 15 , 000 $ 60 0 $ 50 , 000 10 0, 00 0 1 , 00 0

Wha tamountofmanuf ac t ur i ngove r he a dc os t swi l lbeal l oc a t e dt ot hi sj ob? A)$5 00 B)$ 1, 2 50 C)$4 50 D)$ 65 0 Ans we r :A Expl ana t i on:1, 00 0mh×$ 50 , 000/10 0, 00 0mh=$ 500

8. Appl eVa l l e yCor por a t i onus e saj obc os ts ys t e m andha st wopr oduc t i onde pa r t me nt s , A andB.Budge t e d ma nuf a c t ur i ngc os t sf ort heye a rar e :

Di r e c tma t e r i al s Di r e c tmanuf a c t ur i ngl a bor Ma nuf a c t ur i ngove r he a d

Depa r t me ntA $ 60 0, 00 0 $ 10 0, 00 0 $ 40 0, 00 0

Depar t mentB $ 10 0, 00 0 $ 60 0, 00 0 $ 30 0, 00 0

Theac t ualma t e r i alandl aborc os t sc har ge dt oJ ob#4 32we r easf ol l ows :

Di r e c tma t e r i al s : Di r e c tl abor : De par t me ntA De par t me ntB

Tot a l $ 28 , 000 $ 18 , 000 $ 12 , 00 0 $ 30 , 000

Appl eVa l l e yappl i e smanuf a c t ur i ngove r he adc os t st oj obsont heba s i sofdi r e c tmanuf ac t ur i ngl aborc os t us i ngde par t me nt a lr a t e sde t e r mi ne da tt hebe gi nni ngoft heye a r . Ma nuf a c t ur i ngove r he a dc os t sal l oc a t e dt oJ ob# 43 2t ot al__ __ __ __ . A)$7 8, 000 B)$ 12 , 000 C)$3 6, 00 0 D)$ 48 , 00 0 Ans we r :A Expl ana t i on:[ ( $ 18 , 00 0×$40 0, 00 0/$ 10 0, 00 0) ]+[ $ 12 , 00 0×$ 300 , 00 0/$6 00 , 000 ]=$7 8, 0 00

8. Ni c hol sI nc . manuf ac t ur e sr e mot ec ont r ol s . Cur r e nt l yt hec ompa nyus e sapl ant wi der a t ef oral l oc a t i ng ma nuf a c t ur i ngove r he ad.Thepl antmana ge ri sc ons i de r i ngs wi t c hi ngove rt oABCc os t i ngs ys t e m andhas a s ke dt heac c ount i ngde pa r t me ntt oi de nt i f yt hepr i mar ypr oduc t i onac t i vi t i e sandt he i rc os tdr i ve r s whi c ha r easf ol l ows : Ac t i vi t i es Ma t e r i a lhandl i ng As s embl y I ns pe c t i on

Cos tdr i ver Numbe rofpar t s La borhour s Ti mea ti ns pe c t i ons t a t i on

Al l oc a t i onRa t e $ 5pe rpar t $20pe rhour $1 0pe rmi nut e

Thec ur r e ntt r a di t i ona lc os tme t hoda l l oc a t e sove r he a dba s e dondi r e c tmanuf ac t ur i ngl aborhour sus i nga r a t eof$2 0pe rl a borhour . Wha tar et hei ndi r e c tmanuf a c t ur i ngc os t spe rr e mot ec ont r olas s umi nganac t i vi t yba s e dc os t i ngme t hod i sus e dandaba t c hof10r e mot ec ont r ol sar epr oduc e d?Theba t c hr e qui r e s10 0pa r t s , 5di r e c t ma nuf a c t ur i ngl a borhour s , and3mi nut e sofi ns pe c t i ont i me . A)$2 . 00pe rr e mot ec ont r ol B)$ 63 . 00pe rr e mot ec ont r ol C)$3 5. 00pe rr e mot ec ont r ol D)$ 63 0. 0 0pe rr e mot ec ont r ol Ans we r :B Expl ana t i on:( $ 5×1 00 )+( $ 20×5)+( $10×3)=$6 30pe rba t c h/10uni t spe rba t c h=$63 . 00pe runi t...