All of the following are examples of facility level costs except: Costs of clean

Question

All of the following are examples of facility level costs except: Costs of cleaning the workplace. Costs of custodial work. Costs of personnel support. Costs of receiving shipments. Costs of providing electricity. What are three advantages of activity-based costing over traditional volume-based allocation methods? Ease of use, more accurate product costing, and more effective cost control. Fewer allocation bases, ease of use, and a direct correlation to production volume. More accurate product costing, more effective cost control, and better focus on the relevant factors for decision making. More accurate product costing, fewer cost objects, and a direct correlation to production volume. More accurate product costing, ease of use, less costly to implement. A company allocates $7.50 overhead to each unit produced. The company uses a plantwide overhead rate with direct labor hours as the allocation base. Given the amounts below, how many direct labor hours does the company expect in department 2? 9,914 DLH 6,612 DLH 3,109 DLH 7,454 DLH 16,254 DLH

Explanation / Answer

Q 6) DETERMINATION OF DIRECT LABOR HOUR OF DEPARTMENT 2

Total overhead costs of Department 1 and Department 2 = $ 74358 + $ 49572 = $ 123930

Overhead allocated to per unit of product = $ 7.50

Therefore total DLH needed for producing each unit of product = $ 123930 / $ 7.50 = 16524 DLH

Given, DLH for Department 1 = 6610 DLH

Therefore, DLH for Department 2 = 16524 - 6610 = 9914 DLH

Q5) The three advantages of activity based costing over traditional volume based allocation method-

More accurate product costing,More effective cost control and better focus on the relevant factor for decision making.

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