Transcribed Image Text: 26. Urban Products Co. incurs $1,050,000 of overhead costs each year in its three main departments, macning ($600,000),

Excerpt
decisions. D) more accurate product costing. D) 221000 30. Activity-based costing A) one plantwide pool and a single cost driver. B) numerous cost pools and numerous cost drivers. C) one uses plantwide pool and numerous cost drivers D) departmental pools and a single cost driver.

Transcribed Image Text: 26. Urban Products Co. incurs $1,050,000 of overhead costs each year in its three main
departments, macning ($600,000), inspections ($300,000) and packing ($150,000).
The macning department works 4,000 hours per year, there are 600 inspections per
year, and the packing department packs 1,000 orders per year. Information about Urban’s
two products is as follows:
brs
Product Y
3,000
500
Product X
1,000
100
Macning hours
Inspections
Orders packed
Direct labor hours
CA
650
350
022
1,700
1,800
(D
Using ABC, how much overhead is assigned to Product X ts year?
A) $363,462
B) $252,500
C) $525,000
D) $510,000
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27. One of Clay Company’s activity cost pools is macne setups, with estimated overhead
of $360,000. Clay produces sparklers (400 setups) and lighters (600 setups). How much
of the macne setup cost pool should be assigned to sparklers?
A) $144,000
B) $360,000
C) $216,000
D) $180,000
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28. Identifying and classifying activities is the
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A) first step under ABC.
B) second step under ABC.
C) last step under ABC.
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D) None of these answers is correct.
29. The primary benefit of Activity-Based Costing is it provides
A) enhanced control over overhead costs.
B) more cost pools.
C) better management decisions.
D) more accurate product costing.
D) 221000
30. Activity-based costing
A) one plantwide pool and a single cost driver.
B) numerous cost pools and numerous cost drivers.
C) one
uses
plantwide pool and numerous cost drivers
D) departmental pools and a single cost driver.

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