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    PCPAR Activity Based Costing

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    doora keys
    This document discusses activity-based costing and provides two examples. Problem A details the overhead costs and cost drivers for two products at Hondakars Manufacturing. It then asks several questions about calculating overhead costs for each product using different allocation methods. Problem B provides the activities, traceable costs, physical drivers, and activity volumes for two branches of VDO Savings and Loan. It asks questions about calculating the cost per driver unit for each activity and assigning costs to each branch based on their activity volumes.

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    PCPAR Activity Based Costing

    Uploaded by

    doora keys
    39 views3 pages
    This document discusses activity-based costing and provides two examples. Problem A details the overhead costs and cost drivers for two products at Hondakars Manufacturing. It then asks several questions about calculating overhead costs for each product using different allocation methods. Problem B provides the activities, traceable costs, physical drivers, and activity volumes for two branches of VDO Savings and Loan. It asks questions about calculating the cost per driver unit for each activity and assigning costs to each branch based on their activity volumes.

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    PCPAR-Activity-Based-Costing

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    This document discusses activity-based costing and provides two examples. Problem A details the overhead costs and cost drivers for two products at Hondakars Manufacturing. It then asks several questions about calculating overhead costs for each product using different allocation methods. Problem B provides the activities, traceable costs, physical drivers, and activity volumes for two branches of VDO Savings and Loan. It asks questions about calculating the cost per driver unit for each activity and assigning costs to each branch based on their activity volumes.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    39 views3 pages

    PCPAR Activity Based Costing

    Uploaded by

    doora keys
    This document discusses activity-based costing and provides two examples. Problem A details the overhead costs and cost drivers for two products at Hondakars Manufacturing. It then asks several questions about calculating overhead costs for each product using different allocation methods. Problem B provides the activities, traceable costs, physical drivers, and activity volumes for two branches of VDO Savings and Loan. It asks questions about calculating the cost per driver unit for each activity and assigning costs to each branch based on their activity volumes.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 3

    ACTIVITY BASED COSTING

    Problem A: The accountant of Hondakars Manufacturing collected the following


    information:

    Activity Overhead Cost driver Product X1 Product X2


    costs
    Machining
    Dept.
    Setup P200,000 Number of setups 200 50
    Machining 700,000 Machine hours 20,000 15,000
    Packaging
    Dept.
    Assembly 300,000 Direct labor hours 40,000 60,000
    Inspection 180,000 Number of 120 60
    inspections

    1. If Hondakars Manufacturing uses a plantwide rate based on direct labor


    hours to allocate overhead costs, how much is product X1’s share of
    overhead?
    a. P324,000.
    b. P416,000.
    c. P638,000.
    d. P552,000.

    2. If the department allocation method is used, what is the overhead rate for
    the Machining department with machine hours as the allocation base?
    a. P39.43 per machine hour.
    b. P13.71 per machine hour.
    c. P20 per machine hour.
    d. P25.71 per machine hour.

    3. When activity-based costing is used, what is product X2’s share of the


    Packaging department overhead costs?
    a. P270,000.
    b. P240,000.
    c. P580,000.
    d. P380,000.

    4. When activity-based costing is used, how much of the overhead cost is


    allocated to product X1?
    a. P580,000.
    b. P800,000.
    c. P950,000.
    d. P670,000.
    PROBLEM B: VDO Savings and Loan had the following activities, traceable costs,
    and physical flow of driver units:

    Traceable Physical flow of


    Activities Costs Driver Units

    Open new accounts P50,000 1,000 accounts


    Process deposits 36,000 400,000 deposits
    Process withdrawals 15,000 200,000 withdrawals
    Process loan applications 27,000 900 applications

    The above activities are used by the Morayta branch and the Makati branch:
    Morayta Makati

    New accounts 200 400


    Deposits 40,000 20,000
    Withdrawals 15,000 18,000
    Loan applications 100 160

    5. What is the cost per driver unit for new account activity?
    a. P0.09
    b. P0.075
    c. P 30.00
    d. P 50.00

    6. What is the cost per driver unit for the deposit activity?
    a. P0.09
    b. P0.075
    c. P 30.00
    d. P 50.00

    7. What is the cost per driver unit for the withdrawal activity?
    a. P0.09
    b. P0.075
    c. P 30.00
    d. P 50.00

    8. What is the cost per driver unit for the loan application activity?
    a. P0.09
    b. P0.075
    c. P 30.00
    d. P 50.00
    9. How much of the loan application cost will be assigned to the Morayta
    branch?
    a. P3,000
    b. P4,800
    c. P 7,800
    d. P 27,000

    10. How much of the deposit cost will be assigned to the Makati branch?
    a. P1,800
    b. P3,600
    c. P 5,400
    d. P 36,000

    11. How much of the new account cost will be assigned to the Makati branch?

    a. P10,000
    b. P20,000
    c. P 30,000
    d. P 50,000

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