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    Activity based costing, department allocation practice exam

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    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

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    https://brainmass.com/business/management-accounting/activity-based-costing-department-allocation-practice-exam-472713

    Solution Summary

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

    $2.19

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