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Activity based costing, department allocation practice exam

The following are production and cost data for two products, X and Y.

Product X
Product Y
Contribution margin per unit
$450
$280
Machine set-ups needed per unit?
25
14

The company can only perform 14,000 set-ups each period yet there is unlimited demand for each product. What is the maximum contribution margin for the year?

A)$450,000
B)$252,000
C)$156,800
D)$280,000

Glendale Corporation uses an activity-based costing system with three activity cost pools. The company has provided the following data:

Costs:
Depreciation?
$225,000
Utilities?
150,000
Wages and Salaries
314,000
Total
$689,000

Resources are consumed as follows:
Activity Cost Pools

Assembly
Setting Up
Other
Total
Depreciation
30%
20%
50%
100%
Utilities
20%
40%
40%
100%
Wages and salaries
40%
45%
15%
100%

How much total cost would be allocated to the Assembly cost pool?
A) $223,100
B) $246,300
C)$347,900
D) $215,700

30)?Koreen Manufacturing Co. has three production departments. Koreen allocates maintenance costs to the departments based on their use of machine hours. The maintenance cost for March was $180,000. The departments usage of labor and machine hours in March were:

DepartmentMachine hours Labor hours
A 500? 3,000
B 500? 5,000
C 800? 2,000
 
How much maintenance cost should be allocated to the department B for March?

A)$50,000
B)$90,000
C)$60,000
D)$64,285

Solution Summary

Your tutorial is in excel with some instructional comments and helpful schedules. Please click in cells to see computations.

$2.19