Question 1
Put the following ABC implementation steps in order ________.
| A | Compute the allocation rates. |
| B | Compute the total cost of the products. |
| C | Identify the products that are the cost objects. |
| D | Select the cost allocation bases. |
◦ DACB
◦ DBCA
◦ BADC
◦ CDAB
Question 2
Tiger Pride produces two product lines: T-shirts and Sweatshirts. Product profitability is analyzed as follows:
| Production and sales volume | 180,000 units | 24,000 units |
| Selling price | $20.00 | $29.00 |
| Direct material | $1.80 | $ 5.00 |
| Manufacturing overhead | $6.00 | $ 3.00 |
| Selling and administrative | $4.30 | $ 7.00 |
| Operating profit | $3.20 | $ 6.80 |
Tiger Pride's managers have decided to revise their current assignment of overhead costs to reflect the following ABC cost information:
| Activity | Activity cost | Activity-cost driver |
| Supervision | $97,200 | Direct labor hours (DLH) |
| Inspection | $164,050 | Inspections |
| T-SHIRTS | SWEATSHIRTS |
| 0.25 DLH/unit | 1.50 DLH/unit |
| 45,000 DLHs | 36,000 DLHs |
| 80,000 inspections | 16,500 inspections |
Under the revised ABC system, the activity-cost driver rate for the supervision activity is ________.
◦ $1.70
◦ $2.70
◦ $2.16
◦ $1.2
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