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Chapter 07 - Activity-Based Costing: A Tool to Aid Decision Making
Chapter 07
Activity-Based Costing: A Tool to Aid Decision Making
Multiple Choice Questions
1. Costs incurred at which of the following activity levels should NOT be allocated to
products for decision-making purposes?
A. Unit-level activities.
B. Batch-level activities.
C. Product-level activities.
D. Organization-sustaining activities.
Blooms: Understand
CPA Competency: 3.3.2 Evaluates and applies cost management techniques appropriate for specific costing decisions.
Difficulty: Medium
Learning Objective: 07-01 Explain the activity-based costing model and how it differs a traditional costing system.
Topic: 07-05 Overhead Cost Pools, Allocation Bases, and Activity-Based Costing
Topic: 07-06 Activity Rates Based on Capacity, Not Budget
2. Testing a prototype of a new product is an example of an activity at which of the following

levels?
A. Unit-level activity.
B. Batch-level activity.
C. Product-level activity.
D. Organization-sustaining activity.
Blooms: Remember
Difficulty: Easy
7-1
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
3. Setting up equipment is an example of an activity at which of the following levels?

Blooms: Remember
Difficulty: Medium
4. Which of the following activity levels is an example of the clerical activity associated with
processing purchase orders to produce an order for a standard product?
Blooms: Understand
Difficulty: Hard
5. Worker recreational facilities are examples of costs that would ordinarily be considered to
be incurred at which of the following activity levels?
Blooms: Understand
Difficulty: Medium
7-2
6. Arranging for a shipment of a number of different products to a customer is an example of

an activity at which of the following levels?
C. Customer-level activity.
Blooms: Understand
Difficulty: Medium
7. Human resource management is an example of an activity at which of the following

levels?
B. Product-level activity.
C. Batch-level activity.
Blooms: Understand
Difficulty: Medium
8. Which of the following would be classified as a product-level activity?

A. Machine setup for a batch of a standard product.
B. Cafeteria facilities available to and used by all employees.
C. Human resource management.
D. Advertising a product.
Blooms: Understand
Difficulty: Medium
7-3
9. Why may departmental overhead rates NOT correctly assign overhead costs?
A. Because of the use of direct labour hours in allocating overhead costs to products rather
than machine time or quantity of materials.
B. Because of the high correlation between direct labour hours and the incurrence of overhead
costs.
C. Because of the over-reliance on volume as a basis for allocating overhead costs where
products differ regarding the number of units produced, lot size, or complexity of production.
D. Because of the difficulties associated with identifying cost pools for the first stage of the
allocation process.
Blooms: Understand
Difficulty: Hard
Learning Objective: 07-02 Assign costs to cost pools using a first-stage allocation; and compute activity rates.
Topic: 07-08 Step 1: Identify and Define Activities, Activity Cost Pools, and Activity Measures
Topic: 07-09 Step 2: Assign Overhead Costs to Activity Cost Pools
10. Which of the following statements about overhead allocation based on volume alone is
correct?
A. It is a key aspect of the activity-based costing model.
B. It will systematically overcost high-volume products and undercost low-volume products.
C. It will systematically overcost low-volume products and undercost high-volume products.
D. It must be used for external financial reporting.
Blooms: Understand
CPA Competency: 3.1.3 Recommends improvements to reporting systems to meet information needs.
Difficulty: Medium
Learning Objective: 07-03 Assign costs to a cost object using a second-stage allocation.
Learning Objective: 07-05 Compare product costs computed using traditional and activity-based costing methods.
Topic: 07-12 Step 4: Assign Overhead Costs to Cost Objects Using the Activity Rates and Activity Measures
Topic: 07-17 The Differences between Activity-Based Costs and Traditional Product Costs
7-4
11. What is a duration driver?

A. A simple count of the number of times an activity occurs.
B. An activity measure that is used for the life of the company.
C. A measure of the amount of time required to perform an activity.
D. An activity measure that is used for the life of an activity-based costing system.
Blooms: Remember
Difficulty: Easy
12. What is a transactiondriver?

A. An event that causes a transactionto begin.
B. A measure of the amount of time required to perform an activity.
C. An event that causes a transactionto end.
D. A simple count of the number of times an activity occurs.
Blooms: Remember
Difficulty: Easy
13. Which of the following is NOT a limitation of activity-based costing?

A. Maintaining an activity-based costing system is more costly than maintaining a traditional
direct labour-based costing system.
B. Changing from a traditional direct labour-based costing system to an activity-based costing
system changes product margins and other key performance indicators used by managers.
Such changes are often resisted by managers.
C. In practice, most managers insist on fully allocating all costs to products, customers, and
other costing objects in an activity-based costing system. This results in overstated costs.
D. More accurate product costs may result in increasing the selling prices of some products.
Blooms: Understand
CPA Competency: 3.3.3 Recommends changes identified by applying process improvement methodologies.
CPA Competency: 3.3.4 Recommends cost management improvements across the entity.
Difficulty: Medium
Topic: 07-19 Activity-Based Costing and External Reports
7-5
14. (Appendix 7A) Why would an activity-based costing system that is designed for internal
decision making NOT conform to generally accepted accounting principles?
A. Some manufacturing costs (i.e., the costs of idle capacity and organization-sustaining
costs) will not be assigned to products.
B. Some non-manufacturing costs are assigned to products.
C. First-stage allocations may be based on subjective interview data.
D. All of the above.
Blooms: Understand
CPA Competency: 3.3.4 Recommends cost management improvements across the entity.
Difficulty: Medium
Learning Objective: 07-06 Activity Rates Based on Capacity; Not Budget.
15. Paul Company has two products: A and B. The company uses activity-based costing. The
estimated total cost and expected activity for each of the company's three activity cost pools
are as follows:
Expected Activity
Activity Cost Estimated Cost Product A Product B Total
Pool
Activity 1 $22,000 400 100 500
Activity 2 16,240 380 200 580
Activity 3 14,600 500 250 750
7-6
The activity rate under the activity-based costing system for Activity 3 is closest to which of
the following?
A. $19.47.
B. $28.87.
C. $58.40.
D. $70.45.
$14,600/750 = $19.47.
Blooms: Apply
Difficulty: Easy
Topic: 07-10 Step 3: Calculate Activity Rates
7-7
16. Selena Company has two products: A and B. The company uses activity-based costing.
The estimated total cost and expected activity for each of the company's three activity cost
pools are as follows:
Expected Activity
Pool
Activity 1 $17,600 800 300 1,100
Activity 2 12,000 500 200 700
Activity 3 26,000 800 400 1,200
The activity rate under the activity-based costing system for Activity 3 is closest to which of
the following?
A. $18.53.
B. $21.67.
C. $46.33.
D. $65.00.
$26,000/1,200 = $21.67.
Blooms: Apply
Difficulty: Easy
17. Matt Company uses activity-based costing. The company has two products: A and B. The
annual production and sales of Product A is 8,000 units and of Product B is 6,000 units. There
are three activity cost pools, with estimated total cost and expected activity as follows:
7-8
Expected Activity
Pool
Activity 1 $20,000 100 400 500
Activity 2 37,000 800 200 1,000
Activity 3 91,200 800 3,000 3,800
The cost per unit of Product A under activity-based costing is closest to which of the
following?
A. $2.40.
B. $3.90.
C. $6.60.
D. $10.59.
[(20,000/500) * 100 + (37,000/1,000) * 800 + (91,200/3,800) * 800]/8,000 = $6.60.
Blooms: Apply
Difficulty: Hard
7-9
18. Matt Company uses activity-based costing. The company has two products: A and B. The
Expected Activity
Pool
Activity 1 $24,000 200 400 600
Activity 2 36,000 700 200 900
Activity 3 81,200 800 3,000 3,800
The cost per unit of Product B under activity-based costing is closest to which of the
following?
A. $15.60
B. $14.92
C. $16.45
D. $13.50
[(24,000/600)*400 + (36,000/900)* 200 + (81,200/3,800)* 3,000]/7,000 = $14.92.
Blooms: Apply
Difficulty: Hard
Bridget Company uses activity-based costing. The company has two products: A and B. The
7-10
Expected Activity
Pool
Activity 1 $9,000 400 350 750
Activity 2 12,000 100 400 500
Activity 3 48,000 400 1,200 1,600
7-11
19. The cost per unit of Product A under activity-based costing is closest to which of the
following?
A. $6.00.
B. $8.63.
C. $9.60.
D. $13.80.
[(9,000/750) * 400 + (12,000/500) * 100 + 48,000/1,600 * 400]/2,000 = $9.60.
Blooms: Apply
Difficulty: Hard
20. The cost per unit of Product B under activity-based costing is closest to which of the
following?
A. $24.10.
B. $16.60.
C. $35.38.
D. $31.90.
[(9,000/750) * 350 + (12,000/500) * 400 + (48,000/1,600) * 1200]/3,000 = $16.60.
Blooms: Apply
Difficulty: Hard
7-12
Dideda Company uses an activity-based costing system with three activity cost pools. The
company has provided the following data concerning its costs and its activity-based costing
system:
Costs:
Manufacturing overhead $360,000
Selling and administrative expenses 240,000
Total $600,000
Distribution of Resource Consumption:
Activity Cost Pools

Order Size Customer Other Total
Support
Manufacturing 25% 65% 10% 100%
overhead
Selling and 60% 20% 20% 100%
administrative
expenses
The "Other" activity cost pool consists of the costs of idle capacity and organization-
sustaining costs. You have been asked to complete the first-stage allocation of costs to the
activity cost pools.
7-13
21. How much cost, in total, would be allocated in the first-stage allocation to the Order Size
activity cost pool?
A. $150,000.
B. $234,000.
C. $255,000.
D. $360,000.
360,000 *.25 + 240,000 *.6 = $234,000.
Blooms: Apply
Difficulty: Easy
7-14
22. How much cost, in total, would be allocated in the first-stage allocation to the Customer
Support activity cost pool?
A. $120,000.
B. $255,000.
C. $282,000.
D. $390,000.
360,000 *.65 + 240,000 *.2 = $282,000.
Blooms: Apply
Difficulty: Easy
23. How much cost, in total, should NOT be allocated to orders and customer support in the
second stage of the allocation process if the activity-based costing system is used for internal
decision making?
A. $0.
B. $60,000.
C. $84,000.
D. $120,000.
360,000 *.1 + 240,000 *.2 = $84,000.
Blooms: Apply
Difficulty: Medium
7-15
Diehl Company uses an activity-based costing system with three activity cost pools. The
system:
Costs:
Total $580,000
Activity Cost Pools

Support
overhead
Selling and 60% 20% 20% 100%
administrative
expenses
7-16
activity cost pool?
A. $29,000.
B. $84,000.
C. $188,000.
D. $348,000.
480,000 *.05 + 100,000 *.6 = $84,000.
Blooms: Apply
Difficulty: Easy
7-17
A. $116,000.
B. $304,500.
C. $428,000.
D. $493,000.
480,000 *.85 + 100,000 *.2 = $428,000.
Blooms: Apply
Difficulty: Easy
26. How much cost, in total, should not be allocated to orders and customer support in the
decision making?
A. $0.
B. $58,000.
C. $68,000.
D. $116,000.
480,000 *.1 + 100,000 *.2 = $68,000.
Blooms: Apply
Difficulty: Medium
7-18
Dierich Company uses an activity-based costing system with three activity cost pools. The
system:
Costs:
Total $820,000
Activity Cost Pools

Support
overhead
Selling and 60% 20% 20% 100%
administrative
expenses
7-19
activity cost pool?
A. $123,000.
B. $222,000.
C. $307,500.
D. $492,000.
600,000 *.15 + 220,000 *.6 = $222,000.
Blooms: Apply
Difficulty: Easy
7-20
A. $164,000.
B. $389,500.
C. $494,000.
D. $615,000.
600,000 *.75 + 220,000 *.2 = $494,000.
Blooms: Apply
Difficulty: Easy
29. How much cost, in total, should not be allocated to orders and customer support in the
decision making?
A. $0.
B. $82,000.
C. $104,000.
D. $164,000.
600,000 *.1 + 220,000 *.2 = $104,000.
Blooms: Apply
Difficulty: Medium
7-21
Davis Company uses an activity-based costing system in which there are three activity cost
pools. The company has provided the following data concerning its costs and its activity-
based costing system:
Costs:
Total $600,000
Activity Cost Pools

Support
overhead
Selling and 50% 30% 20% 100%
administrative
expenses
sustaining costs. You have been asked to complete the first-stage allocation of the costs to the
7-22
activity cost pool?
A. $210,000.
B. $240,000.
C. $255,000.
D. $300,000.
400,000 *.35 + 200,000 *.5 = $240,000.
Blooms: Apply
Difficulty: Easy
7-23
A. $180,000.
B. $255,000.
C. $280,000.
D. $330,000.
400,000 *.55 + 200,000 *.3 = $280,000.
Blooms: Apply
Difficulty: Easy
32. How much cost, in total should not be allocated to orders and customer support in the
decision making?
A. $0.
B. $60,000.
C. $80,000.
D. $120,000.
400,000 *.1 = 200,000 *.2 = $80,000.
Blooms: Apply
Difficulty: Medium
7-24
Furniture Company uses an activity-based costing system in which there are three activity
cost pools. The company has provided the following data concerning its costs and its activity-
based costing system:
Costs:
Total $900,000
Activity Cost Pools

Support
overhead
Selling and 40% 45% 15% 100%
administrative
expenses
sustaining costs. You have been asked to complete the first-stage allocation of the costs to the
7-25
activity cost pool?
A. $210,000.
B. $240,000.
C. $390,000
D. $300,000.
600,000 *.45 + 300,000 *.4 = $390,000.
Blooms: Apply
Difficulty: Easy
7-26
A. $280,000.
B. $355,000.
C. $380,000.
D. $435,000.
600,000 *.5 + 300,000 *.45 = $435,000.
Blooms: Apply
Difficulty: Easy
35. How much cost, in total should not be allocated to orders and customer support in the
decision making?
A. $0.
B. $75,000.
C. $80,000.
D. $120,000.
600,000 *.0.05 + 300,000 *.15 = $75,000.
Blooms: Apply
Difficulty: Medium
7-27
Escau Company is a wholesale distributor that uses activity-based costing for all of its
overhead costs. The company has provided the following data concerning its annual overhead
costs and its activity-based costing system:
Overhead costs:
Wages and salaries $380,000
Other expenses 100,000
Total $480,000
Activity Cost Pools

Filling Orders Customer Other Total
Support
Wages and 30% 60% 10% 100%
salaries
Other expenses 35% 45% 20% 100%
sustaining costs. The activity measures for the activity cost pools for the year are as follows:
Activity Cost Pool Activity

Filling orders 3,000 orders
Customer support 20 customers
7-28
36. What would be the total overhead cost per order according to the activity-based costing
system, rounded to the nearest whole cent? In other words, what would be the overall activity
rate for the Filling Orders activity cost pool?
A. $48.00.
B. $49.67.
C. $52.00.
D. $56.00.
(380,000 *.3 + 100,000 *.35)/3,000 = $49.67.
Blooms: Apply
Difficulty: Medium
7-29
37. What would be the total overhead cost per customer according to the activity-based
costing system, rounded to the nearest whole dollar? In other words, what would be the
overall activity rate for the Customer Support activity cost pool?
A. $10,800.
B. $12,600.
C. $13,650.
D. $14,400.
(380,000 *.6 + 100,000 *.45)/20 = $13,650.
Blooms: Apply
Difficulty: Medium
38. To the nearest whole dollar, how much wages and salaries cost would be allocated to a
customer who placed eight orders in a year?
A. $7,392.
B. $9,548.
C. $11,704.
D. $14,784.
Cost assigned = $380,000 *.3 = 114,000 and 380,000 *.6 = $228,000

($114,000/3,000) * 8 + ($228,000/20) * 1 = $11,704.
Blooms: Apply
Difficulty: Hard
7-30
Escalona Company is a wholesale distributor that uses activity-based costing for all of its
Overhead costs:
Total $780,000
Activity Cost Pools

Support
Wages and 40% 50% 10% 100%
salaries
sustaining costs. The amount of activity for the year is as follows:

7-31
A. $273.00.
B. $292.50.
C. $302.00.
D. $312.00
(580,000 *.4 + 200,000 *.35)/1,000 = $302.
Blooms: Apply
Difficulty: Medium
7-32
A. $11,700.
B. $12,350.
C. $12,667.
D. $13,000.
(580,000 *.5 + 200,000 *.45)/30 = $12,667.
Blooms: Apply
Difficulty: Medium
customer who placed four orders in a year? Do not round intermediate calculations.
A. $7,124.
B. $8,859.
C. $10,595.
D. $14,248.
Cost assigned = $580,000 *.4 = 232,000 and 580,000 *.5 = $290,000: ($232,000/1,000) * 4 +
($290,000/30) * 1 = $10,595.
Blooms: Apply
Difficulty: Hard
7-33
Escoto Company is a wholesale distributor that uses activity-based costing for all of its
Overhead costs:
Total $740,000
Activity Cost Pools

Support
Wages and 10% 80% 10% 100%
salaries

7-34
A. $18.50.
B. $23.50.
C. $27.75.
D. $37.00.
(540,000 *.1 + 200,000 *.2)/4,000 = $23.50.
Blooms: Apply
Difficulty: Medium
7-35
A. $11,100.
B. $12,950.
C. $13,800.
D. $14,800.
(540,000 *.8 + 200,000 *.6)/40 = $13,800.
Blooms: Apply
Difficulty: Medium
customer who placed eight orders in a year?
A. $7,474.
B. $9,191.
C. $10,908.
D. $14,948.
54,000/4 * 8 + 432,000/40 * 1 = $10,908. Note the numerator in each fraction represents the
cost assigned to each pool for wages and salaries.
Blooms: Apply
Difficulty: Hard
7-36
Acton Company has two products: A and B. The annual production and sales of Product A is
800 units and of Product B is 500 units. The company has traditionally used direct labour
hours as the basis for applying all manufacturing overhead to products. Product A requires 0.3
direct labour hours per unit, and Product B requires 0.2 direct labour hours per unit. The total
estimated overhead for next period is $92,023.
The company is considering switching to an activity-based costing system for the purpose of
computing unit product costs for external reports. The new activity-based costing system
would have three overhead activity cost pools-Activity 1, Activity 2, and General Factory-
with estimated overhead costs and expected activity as follows:
Expected Activity
Activity Cost Estimated Product A Product B Total
Pool Overhead Cost
Activity 1 $14,487 500 600 1,100
Activity 2 64,800 2,500 500 3,000
General Factory 12,736 240 100 340
Total $92,023
(Note: The General Factory activity cost pool's costs are allocated on the basis of direct labour
hours.)
7-37
45. The predetermined overhead rate under the traditional costing system is closest to which
of the following?
A. $13.17.
B. $21.60.
C. $37.46.
D. $270.66.
$92,023/(800 *.3hrs + 500 *.2hrs) = $270.66.
Blooms: Apply
Difficulty: Medium
Topic: 07-16 Product Margins Computed Using the Traditional Costing System
7-38
46. The overhead cost per unit of Product B under the traditional costing system is closest to
which of the following?
A. $2.63.
B. $4.32.
C. $7.49.
D. $54.13.
$270.66 *.2 hrs = $54.13.
Blooms: Apply
Difficulty: Medium
47. The predetermined overhead rate (i.e., activity rate) for Activity 1 under the activity-based
costing system is closest to which of the following?
A. $13.17.
B. $24.15.
C. $28.97.
D. $83.66.
$14,487/1,100 = $13.17.
Blooms: Apply
Difficulty: Easy
7-39
48. The overhead cost per unit of Product A under the activity-based costing system is closest
to which of the following?
A. $11.24.
B. $70.79.
C. $81.20.
D. $86.97.
[(14,487/1,100) * 500 + (64,800/3,000) * 2,500 + (12,736/340) * 240]/800 units = $86.97.
Blooms: Apply
Difficulty: Hard
Addy Company has two products: A and B. The annual production and sales of Product A is
1,700 units and of Product B is 1,100 units. The company has traditionally used direct labour
hours as the basis for applying all manufacturing overhead to products. Product A requires 0.3
direct labour hours per unit, and Product B requires 0.6 direct labour hours per unit. The total
computing unit product costs for externalreports. The new activity-based costing system
would have three factory overhead activity cost pools-Activity 1, Activity 2, and General
Factory-with estimated overhead costs and expected activity as follows:
7-40
Expected Activity
Pool Overhead Cost
Activity 1 $30,528 1,000 600 1,600
Activity 2 17,385 1,700 200 1,900
General Factory 50,872 510 660 1,170
Total $98,785
hours.)
7-41
49. The predetermined overhead rate under the traditional costing system is closest to which
of the following?
A. $9.15.
B. $19.08.
C. $43.48.
D. $84.43.
$98,785/(1,700 *.3hrs + 1,100 *.6) = $84.43.
Blooms: Apply
Difficulty: Medium
50. The overhead cost per unit of Product B under the traditional costing system is closest to
A. $5.49.
B. $11.45.
C. $26.09.
D. $50.66.
$84.43 *.6 hrs = $50.66.
Blooms: Apply
Difficulty: Medium
7-42
51. (Appendix 7A) The predetermined overhead rate (i.e., activity rate) for Activity 2 under
the activity-based costing system is closest to which of the following?
A. $9.15.
B. $10.23.
C. $51.99.
D. $86.93.
$17,385/1,900 = $9.15.
Blooms: Apply
Difficulty: Easy
52. The overhead cost per unit of Product B under the activity-based costing system is closest
to which of the following?
A. $26.09.
B. $35.28.
C. $38.16.
D. $50.66.
(30,528/1,600 * 600 + 17,385/1,900 * 200 + 50,872/1170 * 660)/1,100 units = $38.16.
Blooms: Apply
Difficulty: Hard
Abel Company uses activity-based costing. The company has two products: A and B. The
annual production and sales of Product A is 200 units and of Product B is 400 units. There are
three activity cost pools, with estimated costs and expected activity as follows:
7-43
Expected Activity
Pool
Activity 1 $16,660 600 100 700
Activity 2 18,450 1,100 700 1,800
Activity 3 9,731 60 160 220
7-44
53. The predetermined overhead rate (i.e., activity rate) for Activity 2 under the activity-based
costing system is closest to which of the following?
A. $10.25.
B. $16.77.
C. $24.91.
D. $26.36.
$18,450/1,800 = $10.25.
Blooms: Apply
Difficulty: Easy
54. The cost per unit of Product B is closest to which of the following?
A. $17.69.
B. $41.58.
C. $74.73.
D. $81.53.
[(16,660/700) * 100 + (18,450/1,800) * 700 + (9,731/220) * 160]/400 = $41.58.
Blooms: Apply
Difficulty: Hard
7-45
55. The cost per unit of Product A is closest to which of the following?
A. $27.91.
B. $56.38.
C. $141.04.
D. $70.52.
[(16,660/700) * 600 + (18,450/1,800) * 1100 + (9,731/220) * 60]/200 = $141.04.
Blooms: Apply
Difficulty: Hard
Accola Company uses activity-based costing. The company has two products: A and B. The
annual production and sales of Product A is 1,100 units and of Product B is 700 units. The
direct production costs (material and labour) for Product A are $110,600 and for B is $70,000.
There are three activity cost pools for overhead, with estimated costs and expected activity as
follows:
7-46
Expected Activity
Pool
Activity 1 $18,270 600 500 1,100
Activity 2 35,891 1,600 300 1,900
Activity 3 48,796 440 420 860
56. The activity rate for Activity 3 is closest to which of the following?
A. $26.67.
B. $56.74.
C. $116.18.
D. $119.72.
$48,976/860 = $56.74.
Blooms: Apply
Difficulty: Easy
7-47
57. The overhead cost per unit of Product A is closest to which of the following?
A. $22.70.
B. $47.89.
C. $57.20.
D. $59.23.
[(18,270/1,100) * 600 + (35,891/1,900) * 1,600 +(48,796/860) * 440]/100 = $59.23.
Blooms: Apply
Difficulty: Hard
58. The total annual production cost for Product B is closest to which of the following?
A. $37,816.
B. $107,802.
C. $65,231.
D. $70,000.
[$70,000 + (18,270/1,100) * 500 + (35,891/1,900) * 300 + (48,796/860) * 420] = $107,802.
Blooms: Apply
Difficulty: Hard
Learning Objective: 07-04 Manufacturing Costs Excluded under Activity-Based Costing.
7-48
Arthur Company has two products: S and D. The company uses activity-based costing and
has prepared the following analysis, showing the estimated total overhead cost and expected
activity for each of its three activity cost pools:
Expected Activity
Activity Cost Estimated Cost Product S Product D Total
Pool
Activity 1 $20,000 100 400 500
Activity 2 14,600 500 250 750
Activity 3 90,000 300 2,700 3,000
The annual production and sales of Product S is 4,547 units. The annual production and sales
of Product D is 7,913. Direct costs/unit for each product are as follows:
Product S Product D
Direct Material $1.50 $1.20
Direct Labour $2.00 $2.50
59. The activity rate under the activity-based costing system for Activity 3 is closest to which
of the following?
A. $29.32.
B. $30.00.
C. $33.33.
D. $41.53.
$90,000/3,000 = $30.
Blooms: Apply
Difficulty: Easy
7-49
60. The overhead cost per unit of Product S under activity-based costing is closest to which of
the following? Do not round intermediate calculations.
A. $1.83.
B. $1.98.
C. $5.00.
D. $10.00.
[(20,000/500) * 100 + (14,600/750) * 500 + (90,000/3,000) * 300]/4,547 = $5.0.
Blooms: Apply
Difficulty: Hard
61. The total production cost per unit of Product D under activity-based costing is closest to
A. $16.15.
B. $12.87.
C. $16.37.
D. $16.57.
$1.20 + $2.50 + (20,000/500 * 400 + 14,600/750 * 250 + 90,000/3,000 * 2,700)/7,913 =

$16.57.
Blooms: Apply
Difficulty: Hard
Topic: 07-14 Step 5: Prepare Management Reports
7-50
Monson Company has two products: G and P. The company uses activity-based costing and
has prepared the following analysis, showing the estimated total overhead cost and expected
Expected Activity
Activity Cost Estimated Cost Product G Product P Total
Pool
Activity 1 $30,000 200 400 600
Activity 2 24,000 600 900 1,500
Activity 3 80,000 400 3,600 4,000
The annual production and sales of Product G is 10,640 units. The annual production and
sales of Product P is 26,600.
of the following?
A. $16.00.
B. $21.97.
C. $26.67.
D. $89.33.
24,000/1,500 = $16.
Blooms: Apply
Difficulty: Easy
7-51
63. The overhead cost per unit of Product P under activity-based costing is closest to which of
the following?
A. $4.00.
B. $6.88.
C. $10.00.
D. $30.16.
[(30,000/600) * 400 + (24,000/1,500) * 900 + (80,000/4,000) * 3,600]/26,600 = $4.
Blooms: Apply
Difficulty: Hard
64. The overhead cost per unit of Product G under activity-based costing is closest to which of
the following?
A. $4.00.
B. $28.66.
C. $2.59.
D. $10.04.
[(30,000/600) * 200 + (24,000/1,500) * 600 + (80,000/4,000) * 400]/10,640 = $2.59.
Blooms: Apply
Difficulty: Hard
7-52
Sarah Company has two products: T and V. The company uses activity-based costing and has
prepared the following analysis, showing the estimated total overhead cost and expected
Expected Activity
Activity Cost Estimated Cost Product T Product V Total
Pool
Activity 1 $30,000 200 400 600
Activity 2 39,000 400 900 1,300
Activity 3 80,000 400 3,600 4,000
The annual production and sales of Product T is 10,640 units. The annual production and sales
of Product V is 26,600.
of the following?
A. $16.00.
B. $21.97.
C. $26.67.
D. $30.00.
39,000/1,300 = $30.
Blooms: Apply
Difficulty: Easy
7-53
66. The overhead cost per unit of Product V under activity-based costing is closest to which of
the following?
A. $4.50.
B. $6.88.
C. $10.00.
D. $30.16.
[(30,000/600) * 400 + (39,000/1,300) * 900 + (80,000/4,000) * 3,600]/26,600 = $4.5.
Blooms: Apply
Difficulty: Hard
67. The overhead cost per unit of Product T under activity-based costing is closest to which of
the following?
A. $4.00.
B. $28.66.
C. $2.81
D. $10.04.
[(30,000/600) * 200 + (39,000/1,300) * 400 + (80,000/4,000) * 400]/10,640 = $2.81.
Blooms: Apply
Difficulty: Hard
7-54
Forse Florist specializes in large floral bouquets for hotels and other commercial spaces. The
company has provided the following data concerning its annual overhead costs and its
activity-based costing system:
Overhead costs:
Total $120,000
Activity Cost Pools

Making Bouquets Delivery Other
Wages and salaries 60% 30% 10%
Other expenses 45% 25% 30%

Making bouquets 60,000 bouquets
Delivery 5,000 deliveries
7-55
68. What would be the total overhead cost per bouquet according to the activity-based costing
rate for the Making Bouquets activity cost pool?
A. $0.90.
B. $1.05.
C. $1.10.
D. $1.20.
(80,000 *.6 + 40,000 *.5)/60,000 = $1.10.
Blooms: Apply
Difficulty: Medium
7-56
69. What would be the total overhead cost per delivery according to the activity-based costing
rate for the Deliveries activity cost pool?
A. $6.00
B. $6.60
C. $6.80
D. $7.20
(80,000 *.3 + 40,000 *.25)/5,000 = $6.80.
Blooms: Apply
Difficulty: Medium
Foster Florist specializes in large floral bouquets for hotels and other commercial spaces. The
Overhead costs:
Total $120,000
Activity Cost Pools

Making Bouquets Delivery Other
Wages and salaries 70% 20% 10%
Other expenses 45% 25% 30%
7-57

Delivery 1,000 delive
7-58
A. $1.35.
B. $1.73.
C. $1.79.
D. $2.10.
(70,000 *.7 + 50,000 *.45)/40,000 = $1.79.
Blooms: Apply
Difficulty: Medium
A. $24.00.
B. $26.50.
C. $27.00.
D. $30.00.
(70,000 *.2 + 50,000 *.25)/1,000 = $26.50.
Blooms: Apply
Difficulty: Medium
7-59
Foss Florist specializes in large floral bouquets for hotels and other commercial spaces. The
Overhead costs:
Total $110,000
Activity Cost Pools

Making Delivery Other Total
Bouquets
Wages and 55% 35% 10% 100%
salaries

Delivery 7,000 deliveries
7-60
A. $2.48.
B. $2.75.
C. $2.83.
D. $3.03.
(70,000 *.55 + 40,000 *.45)/20,000 = $2.83.
Blooms: Apply
Difficulty: Medium
7-61
A. $3.93.
B. $4.71.
C. $4.93.
D. $5.50.
(70,000 *.35 + 40,000 *.25)/7,000 = $4.93.
Blooms: Apply
Difficulty: Medium
Grogam Catering uses activity-based costing for its overhead costs. The company has
provided the following data concerning the activity rates in its activity-based costing system:
Activity Cost Pools

Preparing Meals Arranging Functions
Wages $1.15 $110.00
Supplies $0.35 $380.00
Other expenses $0.25 $70.00
The number of meals served is the measure of activity for the Preparing Meals activity cost
pool. The number of functions catered is used as the activity measure for the Arranging
Functions activity cost pool.
Management would like to know whether the company made any money on a recent function
at which 100 meals were served. The company catered the function for a fixed price of $21.00
per meal. The cost of the raw ingredients for the meals was $8.25 per meal. This cost is in
addition to the costs of wages, supplies, and other expenses detailed above.
7-62
74. According to the activity-based costing system, what was the total cost (including the
costs of raw ingredients) of the function mentioned above, rounded to the nearest whole
dollar?
A. $910.
B. $1,060.
C. $1,560.
D. $1,760.
100 * $8.25 + 100 * (1.15 + 0.35 + 0.25) + 1 * (110 + 380 + 70) = $1,560.
Blooms: Analyze
Difficulty: Hard
75. According to the activity-based costing system, what is the total profit margin for this
function?
A. $1,365.
B. $540.
C. $1,040.
D. $1,190.
$21/meal * 100 - 1,560 (Total Cost) = $540.
Blooms: Analyze
Difficulty: Hard
7-63
Groce Catering uses activity-based costing for its overhead costs. The company has provided
the following data concerning the activity rates in its activity-based costing system:
Activity Cost Pools

Wages $0.70 $145.00
Supplies $0.45 $230.00
dollar?
A. $1,370.
B. $1,520.
C. $2,020.
D. $2,220.
150 * $8.75 + 150 * (0.70 + 0.45 + 0.40) + 1 * (145 + 230 + 100) = $2,020.
Blooms: Analyze
Difficulty: Hard
7-64
function?
A. ($70).
B. ($20).
C. $80.
D. $230.
150 * $14 - 2,020 (total cost) = $80.
Blooms: Analyze
Difficulty: Hard
Grodt Catering uses activity-based costing for its overhead costs. The company has provided
the following data concerning the activity rates in its activity-based costing system:
Activity Cost Pools

Wages $0.85 $110.00
Supplies $0.50 $310.00
7-65
dollar?
A. $505.
B. $655.
C. $1,155.
D. $1,355.
60 * $8.60 + 60 * (0.85 + 0.50 + 0.30) + 1 * (110 + 310 + 120) = $1,155.
Blooms: Analyze
Difficulty: Hard
function?
A. ($165).
B. ($115).
C. ($15).
D. $135.
60 * $19 - 1,155 = ($15).
Blooms: Analyze
Difficulty: Medium
7-66
Addison Company has two products: A and B. Annual production and sales are 800 units of
Product A and 700 units of Product B. The company has traditionally used direct labour-hours
as the basis for applying all manufacturing overhead to products. Product A requires 0.2 direct
labour hours per unit and Product B requires 0.6 direct labour hours per unit. The total
computing unit product costs for externalreports. The new activity-based costing system
would have three factory overhead activity cost pools-Activity 1, Activity 2, and General
Factory-with estimated overhead costs and expected activity as follows:
Expected Activity
Pool Overhead Cost
Activity 1 $20,272 300 500 800
Activity 2 29,380 800 500 1,300
General Factory 21,634 160 420 580
Total $71,286
hours.)
7-67
80. (Appendix 7A) The predetermined overhead rate under the traditional costing system is
closest to:
A. $89.11
B. $101.84
C. $47.52
D. $122.91
$71,286/(800*.2 + 700*.6) = $122.91.
Blooms: Apply
Difficulty: Medium
7-68
81. (Appendix 7A) The overhead cost per unit of Product B under the traditional costing
system is closest to:
A. $22.38
B. $13.56
C. $73.74
D. $15.20
$122.91 *.6hrs = $73.74.
Blooms: Apply
Difficulty: Medium
82. (Appendix 7A) The predetermined overhead rate (i.e., activity rate) for Activity 2 under
the activity-based costing system is closest to:
A. $22.60
B. $54.84
C. $58.76
D. $36.73
$29,380/1,300 = $22.60.
Blooms: Apply
Difficulty: Easy
7-69
83. (Appendix 7A) The overhead cost per unit of Product B under the activity-based costing
system is closest to: (Do not round intermediate calculations)
A. $73.74
B. $56.62
C. $22.38
D. $47.52
[(20,272/800) * 500 + (29,380/1,300) * 500 + (21,634/580) * 420]/700 = $56.62.
Blooms: Apply
Difficulty: Hard
Koszyk Manufacturing Corporation has a traditional costing system in which it applies

manufacturing overhead to its products using a predetermined overhead rate based on direct
labour-hours (DLHs). The company has two products, P85G and C43S, about which it has
provided the following data:
P85G C43S
Direct materials per unit $36.50 $63.10
Direct labour per unit $20.80 $31.20
Direct labour hours per unit 0.80 1.20
Annual production 35,000 10,000
7-70
The company's estimated total manufacturing overhead for the year is $2,264,000 and the
company's estimated total direct labour-hours for the year is 40,000.
The company is considering using a variation of activity-based costing to determine its unit
product costs for externalreports. Data for this proposed activity-based costing system appear
below:
Activities and Activity Measures Estimated Overhead Cost

Supporting direct labour (DLHs) $1,160,000
Setting up machines (setups) 288,000
Parts administration (part types) 816,000
Total $2,264,000
Expected Activity
P85G C43S Total
DLHs 28,000 12,000 40,000
Setups 1,480 920 2,400
Part types 1,880 840 2,720
7-71
84. (Appendix 7A) The total cost of a unit of product P85G under the company's traditional
costing system is closest to:
A. $146.97
B. $102.58
C. $101.69
D. $80.50
OH rate = $2,264,000/40,000 = $56.60/DLH. OH cost = 56.60 *.8hrs = $45.28. Add to this

DM of $36.50 and DL of $20.80 = $102.58.
Blooms: Analyze
Difficulty: Hard
85. (Appendix 7A) The total cost of a unit of product C43S under the activity-based costing
A. $165.34
B. $233.26
C. $162.22
D. $105.34
OH/unit = [(1,160,000/40,000) * 12,000 + (288,000/2,400) * 920 + (816,000/2,720) *

840]/10,000 = $71.04. Add 63.10 DM + 31.20 DL = $165.34.
Blooms: Analyze
Difficulty: Hard
7-72
Binegar Manufacturing Corporation has a traditional costing system in which it applies

labour-hours (DLHs). The company has two products, R58G and R09O, about which it has
R58G R09O
below:

Assembling products (DLHs) $696,000
Preparing batches (batches) 252,000
Product support (product variations) 669,600
Total $1,617,600
Expected Activity
R58G R09O Total
DLHs 3,000 21,000 24,000
Batches 528 1,152 1,680
Production 1,056 1,176 2,232
variations
7-73
86. (Appendix 7A) The manufacturing overhead that would be applied to a unit of product
R58G under the company's traditional costing system is closest to:
A. $6.74
B. $16.10
C. $22.84
D. $2.90
$1,617,600/24,000hrs *.10hrs/unit = $6.74.
Blooms: Apply
Difficulty: Medium
7-74
87. (Appendix 7A) The manufacturing overhead that would be applied to a unit of product
R09O under the activity-based costing system is closest to:
A. $113.46
B. $255.00
C. $141.54
D. $17.28
[(696,000/24,000) * 21,000 + (252,000/1,680) * 1,152 + (669,600/2,232) * 1,176]/10,000 =

$113.46.
Blooms: Apply
Difficulty: Hard
Kebort Manufacturing Corporation has a traditional costing system in which it applies

labour-hours (DLHs). The company has two products, U86Y and M91F, about which it has
U86Y M91F
7-75
below:

Direct labour support (DLHs) $1,175,000
Total $2,541,760
Expected Activity
U86Y M91F Total
DLHs 28,000 19,000 47,000
Setups 2,256 658 2,914
Part types 1,034 2,162 3,196
7-76
88. (Appendix 7A) The unit product cost of product U86Y under the company's traditional
costing system is closest to:
A. $71.15
B. $55.50
C. $75.86
D. $38.00
$2,541,760/47,000 *.7 + 19.80 + 18.20 = $75.86.
Blooms: Analyze
Difficulty: Medium
89. (Appendix 7A) The unit product cost of product M91F under the activity-based costing
A. $95.20
B. $121.57
C. $216.77
D. $197.95
(1,175,000/47,000 * 19,000 + 407,960/2,914 * 658 + 958,800/3,196 * 2162)/10,000 + $19.80

+ $18.20 = $216.77.
Blooms: Analyze
Difficulty: Hard
7-77
90. Which of the following types of costs present the greatest difficulty in efforts to trace
them to products and services?
A. Unit-level costs
B. Batch-level costs
C. Product/service-level costs
D. Organization-sustaining costs
Blooms: Understand
Difficulty: Hard
Topic: 07-03 Non-manufacturing Costs and Activity-Based Costing
Topic: 07-04 Manufacturing Costs Excluded under Activity-Based Costing
91. Which of the following is a distinctive feature of an ABC system in comparison to a

departmental overhead application system?
A. It is a two-stage allocation system.
B. It uses transactionaldrivers.
C. It must include at least one non unit-level driver.
D. It uses duration drivers.
Blooms: Understand
Difficulty: Hard
True / False Questions
7-78
92. Most organizations that use ABC have two costing systems-the official costing system,
which is used to prepare external financial reports, and the ABC system, which is used for
internal decision making and for managing activities.
TRUE
Blooms: Remember
Difficulty: Easy
Topic: 07-01 Measuring the Cost of Product Complexity
93. When combining activities in an activity-based costing system, activities should be

grouped together at the same level. For example, batch-level activities should not be
combined with unit-level activities.
TRUE
Blooms: Remember
Difficulty: Easy
94. Unit-level activities arise as a result of the total volume of production and are performed
each time a unit is produced.
TRUE
Blooms: Understand
Difficulty: Easy
7-79
95. Unit-level production activities are performed each time a unit is made.
TRUE
Blooms: Understand
Difficulty: Easy
96. Organization-sustaining activities are carried out regardless of how many units are made,
how many batches are run, or how many different products are made.
TRUE
Blooms: Remember
Difficulty: Easy
97. Activity-based costing uses a number of activity cost pools, each of which is allocated to
products on the basis of direct labour hours.
FALSE
Blooms: Understand
Difficulty: Easy
98. The first-stage allocation in activity-based costing is the process by which overhead costs
are assigned to products before they are assigned to customers.
FALSE
Blooms: Understand
Difficulty: Medium
7-80
99. Activity rates in activity-based costing are computed by dividing costs from the first-stage
allocations by the activity measure for each activity cost pool.
TRUE
Blooms: Understand
Difficulty: Medium
100. In the second-stage allocation in activity-based costing, activity rates are used to apply
costs to products, customers, and other cost objects.
TRUE
Blooms: Understand
Difficulty: Medium
101. In traditional costing systems, all manufacturing costs are assigned to products-even
manufacturing costs that are not caused by the products.
TRUE
Blooms: Understand
Difficulty: Medium
7-81
102. When there are batch-level or product-level costs, in comparison to a traditional cost
system, an activity-based costing system ordinarily will shift costs from high-volume to low-
volume products.
TRUE
Blooms: Understand
Difficulty: Hard
103. An activity-based costing system is generally easier to set up and run than a traditional
cost system.
FALSE
Blooms: Understand
Difficulty: Medium
Topic: 07-01 Measuring the Cost of Product Complexity
Topic: 07-02 The Treatment of Costs Under the Activity—Based Costing Model
Topic: 07-11 Second-Stage Allocation Overhead Costs
104. Activity-based costing is a costing method that is designed to provide managers with cost
information for strategic and other decisions that potentially affect only variable costs.
FALSE
Blooms: Understand
Difficulty: Medium
7-82
105. In activity-based costing, as in traditional costing systems, non-manufacturing costs are

not assigned to products.
FALSE
Blooms: Understand
Difficulty: Medium
106. In activity-based costing, a plant-wide overhead rate is used to apply overhead to

products.
FALSE
Blooms: Understand
Difficulty: Medium
107. Changing a cost accounting system is likely to meet with little resistance in an
organization since it is a technical matter of little interest to individuals outside of the
accounting department.
FALSE
Blooms: Understand
Difficulty: Hard
7-83
108. Managing and sustaining product diversity requires many more overhead resources, such
as production schedulers and product design engineers, than managing and sustaining a single
product. The costs of these resources can be accurately allocated to products on the basis of
direct labour hours.
FALSE
Blooms: Understand
Difficulty: Medium
109. Transaction drivers usually take more effort to record than duration drivers.
FALSE
Blooms: Understand
Difficulty: Medium
110. In general, duration drivers are more accurate measures of the consumption of resources
than transaction drivers.
TRUE
Blooms: Understand
Difficulty: Medium
Short Answer Questions
7-84
111. Ingersol Draperies makes custom draperies for homes and businesses. The company uses
an activity-based costing system for its overhead costs. The company has provided the
following data concerning its annual overhead costs and its activity cost pools:
Overhead Costs:
Production overhead $120,000
Office expense 120,000
Total $240,000
Activity Cost Pools

Making Drapes Job Support Other Total
Production 35% 45% 20% 100%
overhead
Office expenses 5% 65% 30% 100%
Activity Cost Pool Annual Activity

Making drapes 2,000 metres
Job support 160 jobs
Other Not applicable
Required:
a) Prepare the first-stage allocation of overhead costs to the activity cost pools by filling in the
table below:

Production
overhead
Office expense
Total
7-85
b) Compute the activity rates (i.e., cost per unit of activity) for the Making Drapes and Job
Support activity cost pools by filling in the table below:
Making Drapes Job Support

Production overhead
Office expense
Total
c) Compute the total overhead assigned to a job that involves making 71 metres of drapes.
7-86
a) First-stage allocation

Production overhead $42,000 $54,000 $24,000 $120,000
Office expenses 6,000 78,000 36,000 120,000
Total $48,000 $132,000 $60,000 $240,000
Activity 2,000 metres 160 jobs
b) Activity rates (costs divided by activity)
Making Drapes Job Support

Production overhead $21.00 $337.50
Office expense 3.00 487.50
Total $24.00 $825.00
c) Overhead cost of the job.
Making Drapes Job Support Total

Activity 71 1
Production overhead $1,491.00 $337.50 $1,828.50
Office expense 213.00 487.50 700.50
Total $1,704.00 $825.00 $2,529.00
7-87
Blooms: Apply
Difficulty: Hard
7-88
112. Hasty Hardwood Floors installs oak and other hardwood floors in homes and businesses.
The company uses an activity-based costing system for its overhead costs. The company has
provided the following data concerning its annual overhead costs and its activity-based
costing system:
Overhead Costs:
Total $330,000
Activity Cost Pools

Installing Job Support Other Total
Floors
Production 40% 40% 20% 100%
overhead

Installing floors 200 squares
A "square" is a measure of area that is roughly equivalent to 1,000 square metres.
Required:
table below:
7-89

Floors
Production
overhead
Office expense
Total
b) Compute the activity rates (i.e., cost per unit of activity) for the Installing Floors and Job
Installing Floors Job Support

Production overhead
Office expense
Total
c) Compute the overhead cost, according to the activity-based costing system, of a job that
involves installing 3.4 squares.
7-90

Floors
Office expenses 14,000 84,000 42,000 140,000
Total $90,000 $160,000 $80,000 $330,000
Activity 200 squares 160 jobs
Installing Floors Job Support

Production overhead $380 $475
Office expense 70 525
Total $450 $1,000
Installing Floors Job Support Total

Activity 3.4 1
Production overhead $1,292 $475 $1,767
Office expense 238 525 763
Total $1,530 $1,000 $2,530
7-91
Blooms: Apply
Difficulty: Medium
7-92
113. Goel Company, a wholesale distributor, uses activity-based costing for its overhead
costs. The company has provided the following data concerning its annual overhead costs and
its activity-based costing system:
Overhead Costs:
Non-wage expenses 120,000
Total $580,000
Activity Cost Pools

Filling Orders Product Other Total
Support
Wages and salaries 15% 75% 10% 100%
Non-wage expenses 10% 70% 20% 100%

Product support 30 products
7-93
Required:
Compute the activity rates (i.e., cost per unit of activity) for the Filling Orders and Product
Filling Orders Product Support

Wages and salaries
Non-wage expenses
Total
First-stage allocation
Filling Orders Product Other Total

Support
Wages and salaries $69,000 $345,000 $46,000 $460,000
Non-wage expenses 12,000 84,000 24,000 120,000
Total $81,000 $429,000 $70,000 $580,000
Activity 4,000 orders 30 products
Activity rates (costs divided by activity):
Filling Orders Product Support

Wages and salaries $17.25 $11,500
Non-wage expenses 3.00 2,800
Total $20.25 $14,300
7-94
Blooms: Apply
Difficulty: Medium
7-95
114. Fife & Jones PLC, a consulting firm, uses an activity-based costing in which there are
three activity cost pools. The company has provided the following data concerning its costs
and its activity-based costing system:
Costs:
Travel expenses 100,000
Total $780,000
Activity Cost Pools

Working on Business Other Total
Engagements Development
Wages and salaries 50% 20% 30% 100%
Travel expenses 60% 30% 10% 100%
Required:
a) How much cost, in total, would be allocated to the Working On Engagements activity cost
pool?
b) How much cost, in total, would be allocated to the Business Development activity cost
pool?
c) How much cost, in total, would be allocated to the Other activity cost pool?
All three parts can be answered using a first-stage allocation of costs.
7-96
Working on Business Other Total

Engagements Development
Wages and salaries $270,000 $108,000 $162,000 $540,000
Travel expenses 60,000 30,000 10,000 100,000
Other expenses 49,000 35,000 56,000 140,000
Total $379,000 $173,000 $228,000 $780,000
a) $379,000
b) $173,000
c) $228,000
Blooms: Apply
Difficulty: Easy
7-97
115. Huish Awnings makes custom awnings for homes and businesses. The company uses an
activity-based costing system for its overhead costs. The company has provided the following
data concerning its annual overhead costs and its activity cost pools:
Overhead Costs:

Total $250,000
Distribution of resource consumption:
Activity Cost Pools

Making Job Support Other Total
Awnings
Production 45% 40% 15% 100%
overhead

Making awnings 5,000 metres
Required:
table below:
7-98

Awnings
Production
overhead
Office expense
Total
b) Compute the activity rates (i.e., cost per unit of activity) for the Making Awnings and Job
Making Awnings Job Support

Production overhead
Office expense
Total
c) Prepare a report in good form of a job that involves making 80 yards of awnings and has
direct materials and direct labour cost of $3,000. The sales revenue from this job is $4,000.
7-99

Awnings
Office expenses 8,000 65,000 27,000 100,000
Total $75,500 $125,000 $49,500 $250,000
Making Awnings Job Support

Total $15.10 $625.00
Making Awnings Job Support Total

Activity 80 1
Production overhead $1,080.00 $300.00 $1,380.00
Office expense 128.00 325.00 453.00
Total $1,208.00 $625.00 $1,833.00
Overhead assigned can also be calculated using the total rate for each activity:
7-100
Revenue:
Sales $4,000
Cost:
Direct Material and Labour $3,000
Making Awnings 1,208
Job Support 625 4,833
Product (JOB) Margin $(833)
Blooms: Apply
Difficulty: Hard
7-101
116. Phoenix Company makes custom covers for air conditioning units for homes and
businesses. The company uses an activity-based costing system for its overhead costs. The
company has provided the following data concerning its annual overhead costs and its activity
cost pools:
Overhead Costs:
Office expenses 50,000
Total $150,000
Activity Cost Pools

Making Covers Job Support Other Total
Production 40% 42% 18% 100%
overhead

Making covers 2,500 yards
Required:
table below:
7-102

Production
overhead
Office expense
Total
b) Compute the activity rates (i.e., cost per unit of activity) for the Making Covers and Job
Making Covers Job Support

Production overhead
Office expense
Total
c) Prepare a report in good form of a job that involves making 50 yards of covers and has
7-103

Office expenses 6,000 30,000 14,000 50,000
Total $46,000 $72,000 $32,000 $150,000
Making Covers Job Support

Total $18.40 $360.00
Making Covers Job Support Total

Activity 50 1
Production overhead $800.00 $210.00 $1,010.00
Office expense 120.00 150.00 270.00
Total $920.00 $360.00 $1,280.00
Overhead assigned can also be calculated using the total rate for each activity:
7-104
Revenue:
Sales $2,500
Cost:
Making Covers 920
Job Support 360 2,780
Product (JOB) Margin $(280)
Blooms: Apply
Difficulty: Hard
7-105
117. Jackson Painting paints the interiors and exteriors of homes and commercial buildings.
The company uses an activity-based costing system for its overhead costs. The company has
provided the following data concerning its activity-based costing system.
Activity Cost Pool Activity Measure Annual Activity

Painting overhead Square metres 10,000 square metres
Job support Jobs 320 jobs
Other None Not applicable
sustaining costs.
The company has already finished the first stage of the allocation process in which costs were
allocated to the activity cost centres. The results are listed below:
Painting Job Support Other Total

Painting $54,000 $42,000 $24,000 $120,000
overhead
Office expense 16,000 96,000 48,000 160,000
Total $70,000 $138,000 $72,000 $280,000
Required:
a) Compute the activity rates (i.e., cost per unit of activity) for the Painting and Job Support
activity cost pools by filling in the table below. Round off all calculations to the nearest whole
cent.
Painting Job Support

Production overhead
Office expense
Total
7-106
b) Prepare a report in good form of a job that involves painting 63 square metres and has
a) Activity rates (costs divided by activity)
Painting Job Support

Total $7.00 $431.25
b) Overhead cost of the job.
Painting Job Support Total

Activity 63 1
Production overhead $340.20 $131.25 $471.45
Office expense 100.80 300.00 400.80
Total $441.00 $431.25 $872.25
Revenue:
Sales $3,500
Cost:
Paining 441
Job Support 431.25 2,942.25
Product (JOB) Margin $557.75
7-107
Blooms: Apply
Difficulty: Medium
7-108
118. Cabanos Company manufactures two products, Product C and Product D. The company
estimated it would incur $160,790 in manufacturing overhead costs during the current period.
Overhead currently is applied to the products on the basis of direct labour hours. Data
concerning the current period's operations appear below:
Product C Product D
Estimated volume 3,400 units 4,800 units
Direct labour hours per unit 1.40 hours 1.90 hours
Direct materials cost per $7.40 $12.70
unit
Direct labour cost per unit $14.00 $19.00
Required:
a) Compute the predetermined overhead rate under the current method, and determine the unit
product cost of each product for the current year.
b) The company is considering using an activity-based costing system to compute unit
product costs for external financial reports instead of its traditional system based on direct
labour hours. The activity-based costing system would use three activity cost pools. Data
relating to these activities for the current period are given below:
Expected Activity
Activity Cost Estimated Product C Product D Total
Pool Overhead Cost
Machine setups $12,190 80 150 230
Purchase orders 79,200 730 920 1,650
General Factory 69,400 4,760 9,120 13,880
Total $160,790
Determine the unit product cost of each product for the current period using the activity-based
costing approach.
7-109
a) The expected total direct labour hours during the period are computed as follows:
Product C: 3,400 units x 1.4 hrs 4,760 hours

Product D: 4,800 units x 1.9 hrs 9,120 hours
Total direct labour hours 13,880 hours
Using these hours as a base, the predetermined overhead using direct labour hours would be:
Predetermined overhead rate = $160,790/13,880 DLHs = $11.58/DLH
Using this overhead rate, the unit product costs are:
Product C Product D
Direct Materials $7.40 $12.70
Direct Labour $14.00 $19.00
Manufacturing Overhead $16.22 $22.01
Total Unit Product Cost $37.62 $53.71
b) The overhead rates for each activity centre are as follows:
Estimated Expected Activity Overhead Rate

Overhead Cost
Machine setups $12,190 230 $53.00
Purchase orders 79,200 1,650 48.00
General Factory 69,400 13,880 5.00
7-110
The overhead cost charged to each product is:
Product C Product D
Activity Amount Activity Amount
Machine setups 80 $4,240 150 $7,950
Purchase orders 730 35,040 920 44,160
General Factory 4,760 23,800 9,120 45,600
Total overhead $63,080 $97,710
cost
Overhead cost per unit:
Product C: $63,080/3,400 units = $18.55 per unit.

Product D: $97,710/4,800 units = $20.36 per unit.
Using activity-based costing, the unit product cost of each product would be:
Product C Product D
Direct Labour 14.00 19.00
Manufacturing Overhead 18.55 20.36
Blooms: Analyze
Difficulty: Hard
7-111
119. Lionel Corporation manufactures two products, Product B and Product H. Product H is
of fairly recent origin, having been developed as an attempt to enter a market closely related
to that of Product B. Product H is the more complex of the two products, requiring two hours
of direct labour time per unit to manufacture, compared to one hour of direct labour time for
Product B. Product H is produced on an automated production line.
Overhead is currently assigned to the products on the basis of direct labour hours. The
company estimated it would incur $450,000 in manufacturing overhead costs and produce
7,500 units of Product H and 30,000 units of Product B during the current year. Unit costs for
materials and direct labour are:
Product B Product H
Direct materials $12 $25
Direct labour $10 $20
Required:
a) Compute the predetermined overhead rate under the current method of allocation, and
determine the unit product cost of each product for the current year.
b) The company's overhead costs can be attributed to four major activities. These activities
and the amount of overhead cost attributable to each for the current year are given below:
Expected Activity
Activity Cost Estimated Product B Product H Total
Pool Overhead Cost
Machine setups $180,000 600 1,200 1,800
required
Purchase orders 38,382 500 100 600
issued
Machine hours 92,650 6,800 10,200 17,000
required
Maintenance 138,968 693 907 1,600
requests issued
Total $450,000
Using the data above and an activity-based costing approach, determine the unit product cost
of each product for the current year.
7-112
a) The company expects to work 45,000 direct labour hours during the current year, computed
as follows:
Product B: 30,000 units x 1 hr 30,000 hours

Product H: 7,500 units x 2 hrs 15,000 hours

Using this overhead rate, the unit product cost of each product would be:
Product B Product H
Direct Materials $12 $25
Direct Labour $10 $20
Manufacturing Overhead:
Product B-one hour $10
Product H-two hours $20
Total $32 $65
b) The overhead rates are computed as follows:
Activity Cost Pool Estimated Total Expected Rate

Overhead Cost Activity
Machine setups $180,000 1,800 $100.000/setup
Purchase orders 38,382 600 63.970/order
Machine hours 92,650 17,000 5.450/hour
Maintenance 138,968 1,600 86.855/request
requests
Total $450,000
7-113
The overhead cost attributable to each product is:
Product B Product H
Machine setups, 600 $60,000 1,200 $120,000
$100.00/setup
Purchase orders, 500 31,985 100 6,397
$63.97/setup
Machine hours, 6,800 37,060 10,200 55,590
$5.45/hour
Maintenance 693 60,191 907 78,777
request, at
$86.855/request
$189,236 $260,764
Product B: $189,236/30,000 units = $6.3079/unit.

Product H: $260,764/7,500 units = $34.7685/unit.
Product B Product H
7-114
Blooms: Analyze
Difficulty: Hard
7-115
120. Flyer Corporation manufactures two products, Product A and Product B. Product B is of
fairly recent origin, having been developed as an attempt to enter a market closely related to
that of Product A. Product B is the more complex of the two products, requiring three hours of
direct labour time per unit to manufacture, compared to one and one-half hours of direct
labour time for Product A. Product B is produced on an automated production line.
5,500 units of Product B and 22,000 units of Product A during the current year. Unit costs for
Product A Product B
Required:
Expected Activity
Pool Overhead Cost
Machine setups $170,000 700 1,000 1,700
required
issued
Machine hours 91,000 4,000 9,00 13,000
required
Maintenance 98,000 400 600 1,000
requests issued
Total $396,000
7-116
as follows:
Product A: 22,000 units x 1.5 hrs 33,000 hours

Product B: 5,500 units x 3.0 hrs 16,500 hours
Product A Product B
Direct Materials $9 $20
Direct Labour 7 15
Product B-1.5 hour 12
Product H-three hours 24
Total $28 $59

Machine setups $170,000 1,700 $100/setup
Purchase orders 37,000 500 74/order
Machine hours 91,000 13,000 7/hour
Maintenance 98,000 1,000 98/request
requests
Total $396,000
7-117
Product B Product H
Machine setups, 700 $70,000 1,000 $100,000
$100.00/setup
Purchase orders, 300 22,200 200 14,800
$74.00/order
Machine hours, 4,000 28,000 9,000 63,000
$7.00/hour
Maintenance 400 39,200 600 58,800
request, at
$98.00/request
$159,400 $236,600
Product A: $159,400/22,000 units = $7.2455/unit.

Product B: $236,600/5,500 units = $43.0182/unit.
Product A Product B
7-118
Blooms: Analyze
Difficulty: Hard
7-119
121. EMD Corporation manufactures two products, Product S and Product W. Product W is
of fairly recent origin, having been developed as an attempt to enter a market closely related
to that of Product S. Product W is the more complex of the two products, requiring one hour
of direct labour time per unit to manufacture, compared to a half-hour of direct labour time for
Product S. Product W is produced on an automated production line.
10,000 units of Product W and 60,000 units of Product S during the current year. Unit cost for
Product S Product W
Required:
Expected Activity
Activity Cost Estimated Product S Product W Total
Pool Overhead Cost
Machine setups $200,00 800 1,200 2,000
required
issued
Machine hours 104,000 3,000 10,000 13,000
required
Maintenance 152,500 860 1,140 2,000
requests issued
Total $500,000
7-120
as follows:
Product S: 60,000 units x 0.5 hr 30,000 hours

Product W: 10,000 units x 1.0 hrs 10,000 hours

Product S Product W
Product B-half hour 6.25
Product H-one hour 12.50
Total $24.25 $48.50

Machine setups $200,000 2,000 $100.00/setup
Purchase orders 43,500 600 72.50/order
Machine hours 104,000 13,000 8.00/hour
Maintenance 152,500 2,000 76.25/request
requests
Total $500,000
7-121
Product S Product W
Machine setups, 800 $80,000 1,200 $120,000
$100.00/setup
Purchase orders, 500 36,250 100 7,250
$72.50/order
Machine hours, 3,000 24,000 10,000 80,000
$8.00/hour
Maintenance 860 65,575 1,140 86,925
request, at
$76.25/require
$205,825 $294,175
Product S: $205,825/60,000 units = $3.4304/unit.

Product W: $294,175/10,000 units = $29.4175/unit.
Product S Product W
7-122
Blooms: Analyze
Difficulty: Hard
7-123
122. Daba Company manufactures two products, Product F and Product G. During the current
year, the company expects to produce and sell 1,400 units of Product F and 1,800 units of
Product G. The company uses activity-based costing to compute unit product costs for
external reports. Data relating to the company's three activity cost pools are given below for
the current year:
Expected Activity
Activity Cost Estimated Product F Product G Total
Pool Overhead Cost
Machine setups $10,800 80 100 180
Purchase orders 77,520 510 1,010 1,520
General factory 75,920 2,240 3,600 5,840
Required:
Using the activity-based costing approach, determine the overhead cost per unit for each
product.
The overhead rates for each activity centre are as follows:
Activity Centre Estimated Total Expected Overhead Rate

Machine setups $10,800 180 $60.00
General factory 75,920 5,840 13.00
The overhead cost charged to each product is:
7-124
Product F Product G
Machine setups 80 $4,800 100 $6,000
Purchase orders 510 26,010 1,010 51,510
General factory 2,240 29,120 3,600 46,800
Total overhead $59,930 $104,310
cost
Product F: $59,930/1,400 units = $42.81 per unit.

Product G: $104,310/1,800 units = $57.95 per unit.
Blooms: Apply
Difficulty: Medium
7-125
123. Eaker Company uses activity-based costing to compute product costs for external
reports. The company has three activity cost pools and applies overhead using predetermined
overhead rates for each activity cost pool. Estimated costs and activities for the current year
are presented below for the three activity centres:
Activity Centre Estimated Overhead Costs Expected Activity

Batch setups $20,400 1,200
Material handling 52,800 2,400
General factory 78,000 2,600
Actual costs and activities for the current year were as follows:
Activity Centre Actual Overhead Costs Expected Activity

Batch setups $20,740 1,230
Material handling 52,360 2,470
General factory 77,590 2,680
Required:
a) How much total overhead was applied to products during the year?
b) By how much was overhead overapplied or underapplied? (Be sure to clearly label your
Answer as to whether the overhead was overapplied or underapplied for each activity centre
as well as for the total.)
a) The overhead rates for each activity centre are as follows:
Activity Centre Estimated Total Expected Predetermined

Overhead Cost Activity Overhead Rate
Machine setups $20,400 1,200 $17.00
General factory 78,000 2,600 30.00
7-126
The amount of overhead applied to production is determined as follows:
Activity Centre Predetermined Actual Activity Applied Overhead

Overhead Rate
Machine setups $17.00 1,230 $20,910
Machine handling 22.00 2,470 54,340
General factory 30.00 2,680 80,400
Total overhead $155,650
applied
b) The amount of underapplied (overapplied) for each centre and all activity centres is as
follows:
Activity Centre Actual Overhead Applied Overhead Underapplied

(Overapplied)
Overhead
Machine setups $20,740 $20,910 ($170)
Machine handling 52,360 54,340 ($1,980)
General factory 77,590 80,400 ($2,810)
Total overhead $150,690 $155,650 ($4,960)
applied
Blooms: Analyze
Difficulty: Medium
7-127
124. Kya, Inc. manufactures two models of high-pressure steam valves, the XR7 model and
the ZD5 model. Budgeted manufacturing overhead cost and operating data regarding
production and sales of 2,000 units of the XR7 model and 8,000 units of the ZD5 model for
2005 follow:
Budgeted Level for Cost Driver

Activity Budgeted Cost Driver XR7 ZD5 Total
Cost Pool Overhead
Costs
Machine $800,000 Number of 150 100 250
setups setups
Vendor 200,000 Number of 800 200 1,000
negotiation parts
Assembly 400,000 Direct labour 4,000 36,000 40,000
hours
$1,400,000
Required:
a) Identify and briefly explain each of the three cost drivers as either unit-level or batch-level
or product-level or organization-sustaining level.
b) Calculate the budgeted manufacturing overhead cost for each unit of the two models, using
only one unit-level cost driver.
c) Calculate the budgeted manufacturing overhead cost for each unit of the two models, using
the activity-based-costing (ABC) method.
d) Assume Kya, Inc. will use only the unit-level driver. Compared to the ABC method, by
how much (in terms of total allocated/applied manufacturing overhead cost), if any, will the
total output of each model be either under-costed or over-costed?
e) Is the result obtained in part (d) above consistent with your expectations? Explain.
7-128
a) Number of setup is a batch-level activity in the sense that machine has to be setup for each
batch independent of the number units in a batch. Number of parts is a product-level activity
because the vendor negotiation costs increase with the number of different vendors to be
sourced. Direct labour is a traditional unit-level activity that is performed on each unit of
output.
b) Predetermined rate = $1,400,000/40,000 DLHs
= $35/DLH
XR7 Model ZD5 Model

Applied overhead @ $35 $140,000 $1,260,000
per DLH: (4,000 x $35);
(36,000 x $35)
Number of units 2,000 8,000
Cost per unit $70.00 $157.50
c) Rates:
setups ($800,000/250) = $3,200 per machine setup
Vendor negotiations ($200,000/1,000) = $200 per part
Assembly ($400,000/40,000) = $10 per DLH
XR7 Model ZD5 Model

Applied overhead @ $35 $140,000 $1,260,000
per DLH: (4,000 x $35);
(36,000 x $35)
Number of units 2,000 8,000
Cost per unit $70.00 $157.50
7-129
d)
XR7 Model ZD5 Model

ABC Allocations $680,000 $720,000
Unit-level allocations 140,000 1,260,000
Amount of under-costing $540,000
Amount of over-costing $540,000
e) The result in part (d) above is consistent with expectations. In comparison with ABC, use
of only unit-level cost drivers such as direct labour hours generally tends to over-cost the high
volume product (in this case, ZD5 Model) while it under-costs the low-volume product (in
this case XR7 Model). This is the result obtained in part (d) above.
Blooms: Analyze
Difficulty: Hard
7-130
125. Activity-based-costing (ABC) charges products for the cost of capacity used, NOT for
idle capacity.
Required:
a) The use of which activity level, budgeted (same as expected) or maximum capacity, is
consistent with ABC? Explain.
b) How might the use of ABC based on maximum capacity activity level enhance a firm's
ability to compete on price? Explain.
a) Use of maximum capacity activity level is consistent with the ABC method. It will ensure a
reasonably stable (if not constant) activity rate regardless of the expected level of activity.
Since, by definition, expected level of activity cannot exceed the maximum capacity, the
resulting activity rate is also likely to be lower. A lower activity rate when applied to a less-
than-capacity expected or actual activity level will ensure that cost of idle capacity is not
charged to products.
b) Since the cost of idle capacity will not be charged to products, products are unlikely to be
overcosted. The fact that ABC generally achieves more accurate product costs (because it
uses multiple unit-level and non unit-level cost drivers) also avoids undercosting or
overcosting. Accurate product cost information is a good starting point for competitive
pricing. This is especially important in diverse multiple product firms where product emphasis
decisions are routinely made.
Blooms: Evaluate
Difficulty: Hard
7-131
126. (Appendix 7A) Werger Manufacturing Corporation has a traditional costing system in
which it applies manufacturing overhead to its products using a predetermined overhead rate
based on direct labour-hours (DLHs). The company has two products, W82R and L48S, about
which it has provided the following data:
W82R L48S
product costs for external reports. Data for this proposed activity-based costing system appear
below:

Supporting direct labour (DLHs) $352,000
Total $1,521,960
Activities W82R L48S Total

Supporting direct 9,000 13,000 22,000
labour
Setting up machines 814 374 1,188
Part administration 924 1,012 1,936
Required:
a. Determine the unit product cost of each of the company's two products under the traditional
costing system.
b. Determine the unit product cost of each of the company's two products under activity-based
costing system.
7-132
a. Traditional Unit Product Costs

Predetermined overhead rate = $1,521,960  22,000 DLHs = $69.18 per DLH
W82R L48S
Direct materials $11.50 $62.90
Direct labour 2.00 13.00
Manufacturing overhead 13.84 89.93
(0.2 DLHs x $69.18 per
DLH; 1.3 DLHs x $69.18
per DLH)
Unit product cost $27.34 $165.83
b. ABC Unit Product Costs
Estimated Total Expected Activity Rate

Supporting direct $352,000 22,000 DLHs $16 per DLH
labour
Setting up machines $201,960 1,188 setups $170 per setup
Part administration $968,000 1,936 part types $500 per part type
Overhead cost for W82R
Activity Rate Activity ABC Cost

Supporting direct $16 per DLH 9,000 DLHs $144,000
labour
Setting up machines $170 per setup 814 setups 138,380
Part administration $500 per part type 924 part types 462,000
Total $744,380
7-133
Overhead cost for L48S

labour
Part administration $500 per part type 1,012 part types 506,000
Total $777,580
W82R L48S
($744,400 / 45,000 units;
$777,600 / 10,000 units)
Blooms: Analyze
Difficulty: Medium
7-134
127. (Appendix 7A) Torri Manufacturing Corporation has a traditional costing system in
based on direct labour-hours (DLHs). The company has two products, B40W and C63J, about
B40W C63J
below:

Assembling products (DLHs) $1,216,000
Milling (MHs) 960,000
Total $2,656,000
Activities B40W C63J Total

Assembling 28,000 36,000 64,000
products
Preparing batches 2,304 2,496 4,800
Milling 1,088 2,112 3,200
Required:
a. Determine the unit product cost of each of the company's two products under the traditional
costing system.
b. Determine the unit product cost of each of the company's two products under activity-based
costing system.
7-135
a. Traditional Unit Product Costs

B40W C63J
(0.8 DLHs x $4150 per
DLH; 2.4 DLHs x $41.50
per DLH)
b. ABC Unit Product Costs

Assembling products $1,216,000 64,000 DLHs $19 per DLH
Preparing batches $480,000 4,800 batches $100 per setup
Milling $960,000 3,200 MHs $300 per MH
Overhead cost for B40W

Assembling products $19 per DLH 28,000 DLHs $532,000
Preparing batches $100 per setup 2,304 batches 230,400
Milling $300 per MH 1,088 MHs 326,400
Total $1,088,800
7-136
Overhead cost for C63J

Preparing batches $100 per setup 2,496 batches 249,600
Milling $300 per MH 2,112 MHs 633,600
Total $1,567,200
B40W C63J
($1,088,800 / 35,000 units;
$1,567,200 / 15,000 units)
Blooms: Analyze
Difficulty: Medium
7-137
128. (Appendix 7A) Welk Manufacturing Corporation has a traditional costing system in
based on direct labour-hours (DLHs). The company has two products, H16Z and P25P, about
H16Z P25P
below:

Supporting direct labour (DLHs) $552,000
Total $1,464,480
Activities H16Z P25P Total

Supporting direct 12,000 12,000 24,000
labour
Setting up machines 864 240 1,104
Part administration 600 960 1,560
Required:
a. Determine the manufacturing overhead cost per unit of each of the company's two products
under the traditional costing system.
b. Determine the manufacturing overhead cost per unit of each of the company's two products
under activity-based costing system.
7-138
a. Traditional Manufacturing Overhead Costs

H16Z P25P
Direct labour-hours 0.40 1.20
Predetermined overhead $61.02 $61.02
rate per DLH
Manufacturing overhead $24.41 $73.22
cost per unit
b. ABC Manufacturing Overhead Costs

Supporting direct $552,000 24,000 DLHs $23 per DLH
labour
Setting up machines $132,480 1,104 setups $120 per setup
Part administration $780,000 1,560 part types $500 per part type
Overhead cost for H16Z

labour
Total $679,680
Annual production 30,000
Manufacturing $22.66
overhead cost per
unit
7-139
Overhead cost for P25P

labour
Total $784,800
Manufacturing $78,48
overhead cost per
unit
Blooms: Analyze
Difficulty: Medium
7-140
129. (Appendix 7A) Bullie Manufacturing Corporation has a traditional costing system in
based on direct labour-hours (DLHs). The company has two products, D31X and U75X,
about which it has provided the following data:
D31X U75X
below:

Assembling products (DLHs) $140,000
Axial milling (MHs) 766,500
Total $1,147,650
Activities D31X U75X Total

Assembling 3,500 31,500 35,000
products
Preparing batches 560 1,295 1,855
Axial milling 1,540 1,015 2,555
Required:
a. Determine the manufacturing overhead cost per unit of each of the company's two products
under the traditional costing system.
b. Determine the manufacturing overhead cost per unit of each of the company's two products
under activity-based costing system.
7-141
a. Traditional Manufacturing Overhead Costs

D31X U75X
Direct labour-hours 0.10 2.10
Predetermined overhead $32.79 $32.79
rate per DLH
Manufacturing overhead $3.28 $68.86
cost per unit
b. ABC Manufacturing Overhead Costs

Assembling products $140,000 35,000 DLHs $4 per DLH
Preparing batches $241,150 1,855 batches $130 per batch
Milling $766,500 2,555 MHs $300 per MH
Overhead cost for D31X

Preparing batches $130 per batch 560 batches 72,800
Axial milling $300 per MH 1,540 MHs 462,000
Total $548,800
overhead cost per
unit
7-142
Overhead cost for U75X

Preparing batches $130 per batch 1,295 batches 168,350
Axial milling $300 per MH 1,015 MHs 304,500
Total $598,850
overhead cost per
unit
Blooms: Analyze
Difficulty: Medium
7-143
130. Mike Kyekyeku is a sole proprietorship that provides consulting and tax preparation
services to its clients. Mike charges a fee of $100 per hour for each service and can devote a
maximum of 4,000 hours annually to his clients. He reported the following revenues and
expenses for 2014:
Revenue $400,000
Expenses (All overhead
costs):
Secretarial support $84,000
Supplies 72,000
Computer costs, etc. 48,000 204,000
Net income (loss) $196,000
Being an accountant, Mike kept good records of the following data for 2014:
(i). Revenue:
Tax preparation $130,000

Consulting 270,000
Total $400,000
(ii).
ACTIVITY LEVEL
Overhead Cost Cost Driver Tax Consulting Total
Secretarial Number of clients 72 48 120
support
Supplies TrAnsweractions 200 300 500
with clients
Computer costs, Computer hours 1,000 600 1,600
etc.
7-144
Required:
a. Should Mike emphasize one service more than the other if Mike were to allocate all the
overhead costs using direct-labours as the only overhead cost driver (1,300 for Tax and 2,700
for Consulting)? Support your decision with the relevant calculations and/or analysis.
b. Identify each of the three cost drivers as either unit-level, batch-level, product-level,
customer-level, or organization-sustaining.
c. How might Mike's product/service emphasis decision in Partaabove be altered if he were
to allocate all the overhead costs using activity-based costing and the three cost drivers, that
is, number of clients, number of transactions with clients, and computer hours? Show all your
supporting calculations and/or analysis, including any necessary explanation.
7-145
a.
Decision: No
Analysisand/orcalculations:
Preliminary analysis:
The overhead allocation rate = $51 per DLH, i.e. $204,000/(1,300 + 2,700)
Tax Consulting
Revenue $130,000 $270,000
Expenses:
Allocations at $51 per DLH 66,300 137,700
($51 x 1,300; $51 x 2,700)*
Profit $63,700 $132,300
Number of DLHs 1,300 2,700
Profit per DLH: $49** $49**
($63,700/1,300;
$132,300/2,700)
The two services generate the same profit for each hour of Mike's scarce time. Note: Since the
$100 billing rate per DLH is the same, the decision can be based only on allocated cost per
DLH ($51) which is the same for both services
* Alternatively, allocate in proportion to Tax and Consulting at 32.5% and 67.5%,

respectively.
** Same as the $100 billing rate less the $51 allocation rate.
b. Number of clients: Customer-level

Number of transactions with clients: Unit-level
Computer hours: Unit-level
c. Preliminary analysis (ABC)
7-146
Tax Consulting
Revenue $130,000 $270,000
Expenses:
Allocations
Secretarial support (60%, 50,400 33,600
40%)*
Supplies (40%, 60%)** 28,800 43,200
Computer costs, etc. 30,000 18,000
(62.5%, 37.5%)***
$109,200 $94,800
Profit $20,800 $175,200
Profit per DLH: $16.00 $64.89
($20,800/1,300;
$175,200/2,700)
Decision:
Consulting should receive greater emphasis since every hour of Mike's scarce time generates
a profit of $64.89 compared to $16.00 for Tax. (Note: The decision can be based only on the
total allocated cost per DLH (that is, $109,200/1,300 = $84.00 for Tax; $94,800/2,700 =
$35.11 for Consulting) since the billing rate per DLH of $100 is the same for both services.
Alternatively, base decision on total allocated cost for each service together with an
explanation that consulting has less allocated cost and also fewer number of direct labour
hours.
* same as using activity rate of $700 per client (i.e., $84,000/120)

** same as using activity rate of $144 per transactions (i.e., $72,000/500)
*** same as using activity rate of $30 per computer hour (i.e., $48,000/1,600)
7-147
Blooms: Analyze
Difficulty: Hard
7-148
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potest implere, sciat se ille filius contra legem fecisse» (M. G. H., Leges, III, p.
286.) Il y a eu de multiples applications de ce principe dans la légende et dans
l'histoire: par exemple, Grégoire de Tours, ii, 41; iii, 18; Vita sancti Theodorici
Abbatis (Mabillon, Acta Sanct., I. p. 599), et Flodoard, Historia Remensis ecclesiæ,
i, c. 24. Cf. Histoire poétique des Mérovingiens, pp. 296 et 503.
«Pendant que le roi Clovis demeurait à Paris, il fit dire en secret au
fils de Sigebert:
«—Voilà que ton père est vieux et qu'il boite. S'il venait à mourir, tu
hériterais de son royaume et tu deviendrais notre ami.»
«Enflammé d'ambition, le jeune prince médita de tuer son père.
Comme celui-ci, sorti de Cologne, avait passé le Rhin pour se
promener dans la forêt de Buchonie, son fils lui dépêcha des
assassins, qui l'égorgèrent pendant qu'il dormait à midi sous sa
tente. Il se flattait ainsi de devenir le maître de son royaume. Mais,
par le jugement de Dieu, il tomba lui-même dans la fosse qu'il avait
creusée pour son père. Il fit mander à Clovis la mort du vieux roi,
ajoutant:
«—Mon père est mort, et je suis en possession de son trésor et de
son royaume. Envoyez-moi des hommes de confiance, à qui je
remettrai de plein gré la part qui vous conviendra de ses richesses.»
Clovis lui fit répondre:
«—Je te remercie de ta bonne volonté, et je te prie de montrer ton
trésor à mes envoyés; tu le garderas ensuite tout entier.»
«Chlodéric, aussitôt les envoyés de Clovis arrivés, leur exhiba tout le
trésor paternel. Pendant qu'ils examinaient divers objets, il leur dit:
«—Voici un coffre où mon père avait l'habitude d'entasser des
pièces d'or.
«—Plongez la main jusqu'au fond, dirent les envoyés, et ramenez
tout.»
«Pendant que Chlodéric, profondément incliné sur le coffre, se
mettait en devoir de leur obéir, l'un d'eux, levant sa hache, lui brisa la
tête. Et ainsi le parricide expia ce qu'il avait fait à son père. Clovis,
apprenant que Sigebert avait péri et son fils également, vint à
Cologne, rassembla tout le peuple, et dit:
«—Écoutez ce qui est arrivé. Pendant que je naviguais sur l'Escaut,
Chlodéric, fils de mon parent, poursuivait son père et faisait courir le
bruit que je voulais le faire assassiner. Et pendant que le vieux roi
fuyait par la forêt de Buchonie, il lui envoya des assassins qui le
mirent à mort. Lui-même périt massacré, je ne sais par qui, pendant
qu'il ouvrait le trésor paternel. Pour moi, je n'ai aucune complicité
dans ces actes; je sais que ce serait un crime de verser le sang de
mes proches. Mais puisque le mal est fait, je vous donne un conseil
dont vous vous trouverez bien, si vous le suivez; soumettez-vous à
moi, et vous serez sous ma protection.»
«Le peuple applaudit à ces paroles, en faisant entendre des
acclamations et en entrechoquant les boucliers, éleva Clovis sur le
pavois et en fit son souverain. Celui-ci prit possession du royaume
de Sigebert et mit la main sur son trésor[215].»
[215] Grégoire de Tours, ii, 40.
Les contradictions et surtout les énormes invraisemblances de cette
tradition populaire crèvent les yeux. Elles s'expliquent dans un récit
qui a passé par beaucoup de bouches avant d'être mis par écrit,
mais il est indispensable de les signaler pour fixer la vraie valeur de
la narration. Si le roi de Cologne a été tué pendant qu'il se promenait
dans la Buchonie, pourquoi est-il dit un peu plus loin qu'il fuyait
devant son fils Chlodéric? Si c'est celui-ci qui est le meurtrier, qui a
dit à la tradition populaire qu'il ait agi à l'instigation de Clovis? Et si
Clovis a voulu plus tard se débarrasser de Chlodéric par un meurtre,
est-il sérieux de prétendre qu'il l'aurait fait assassiner dans son
propre palais, et par des ambassadeurs? Enfin, à supposer qu'il ait
réellement commis une pareille trahison, comment croire que le
peuple ripuaire se serait laissé persuader qu'il en était innocent? En
contredisant d'une manière si éclatante l'opinion qu'elle attribue aux
Ripuaires, la tradition ne se démasque-t-elle pas comme une
légende postérieure et sans autorité? Toutes ces invraisemblances
sans doute ne choquaient pas l'esprit populaire à l'époque où
écrivait Grégoire de Tours, mais elles dénoncent le récit à la critique
moderne, et nous forcent à reconnaître ici le travail inconscient de la
poésie, non les souvenirs exacts de l'histoire.
Qu'il nous soit permis d'inviter le lecteur à nous suivre pour quelques
instants dans l'atelier de la critique, où une analyse méthodique du
récit qu'il vient d'entendre nous permettra peut-être de le ramener à
ses éléments constitutifs et de nous rendre compte de sa formation.
En éliminant tous les détails légendaires, nous rencontrons au
centre de celui-ci un noyau vraiment historique: la mort tragique des
deux rois de Cologne. Sigebert et Chlodéric vivaient encore en 507;
en 511, tous deux étaient disparus, et Clovis régnait à leur place. Ce
double drame a vivement préoccupé l'imagination populaire; elle a
voulu en savoir la cause, et elle n'a pas manqué d'en trouver une qui
la satisfît. «Cherche à qui le crime profite,» telle est la règle qui
guide l'esprit des foules dans la recherche du coupable. Or le seul
qui eût intérêt à faire périr Sigebert, c'est celui qui devait être son
héritier, et Chlodéric s'est vu ainsi transformé en parricide de par la
rigoureuse logique de l'épopée. Peut-être celle-ci aurait hésité à
charger sa mémoire d'un crime aussi monstrueux, si la fin précoce et
tragique de ce prince n'avait été une preuve de sa culpabilité. Car il
est un autre axiome non moins cher à la logique populaire, et que
l'épopée consacre tous les jours dans ses tableaux, c'est que tout
crime s'expie dès ici-bas par la loi du talion. Ils sont innombrables,
les personnages historiques dont la tradition a noirci la mémoire,
simplement parce qu'ils ont été malheureux, et qu'on n'a pu
expliquer leur malheur autrement que par leurs fautes. Si Chlodéric
a péri de bonne heure et d'une mort cruelle, c'est qu'il avait mérité ce
châtiment, c'est qu'il était l'auteur de la catastrophe mystérieuse qui
avait emporté son père. Mais la mort de Chlodéric lui-même, à qui
profitait-elle, sinon à Clovis, qui devint grâce à elle le roi des
Ripuaires? Encore une fois donc, dans cette imagination populaire
qui ne peut pas se résigner à laisser quelque part aux éléments
fortuits, c'est Clovis qui a fait périr Chlodéric, et qui est devenu ainsi
l'exécuteur des justes vengeances d'un Dieu irrité[216].
[216] Je crois devoir rappeler au lecteur que je me borne à résumer ici les
considérations développées dans l'Histoire poétique des Mérovingiens, pp. 293-
302.
Tel est le procédé poétique par lequel, remontant des effets aux
causes et raisonnant d'après les lois d'une logique simple et
rigoureuse, l'imagination populaire est arrivée à s'expliquer toute
cette série d'événements. Une ambition criminelle a poussé un
prince royal au parricide; mais la justice divine fait marcher la
vengeance sur les traces du crime, et succomber le coupable sous
les coups de son heureux successeur.
Ainsi, l'évolution est complète. Le fait inexpliqué, tombé dans
l'imagination épique comme une graine dans le sol, y a germé,
grandi, et s'est peu à peu ramifié de la manière qu'on vient de voir.
Le peuple possède maintenant une explication satisfaisante de
l'avènement de Clovis au trône des Ripuaires. Certes, l'épopée
aurait pu s'arrêter ici. Mais, une fois en voie d'explication, elle va
jusqu'au bout. Elle a entrevu une possibilité, c'est que l'artificieux
Clovis, en vue d'amener le dénouement dont il devait profiter, ait lui-
même provoqué le crime de Chlodéric. Et voilà l'histoire qui entre
dans une nouvelle phase, racontant comment le roi des Saliens
arme un fils contre son père, et les pousse tous les deux dans la
tombe pour hériter de l'un et de l'autre. Que Clovis soit de la sorte
transformé en un perfide et sanguinaire intrigant, cela importe peu.
Les milieux où se sont élaborées ces légendes étaient trop barbares
pour se rendre compte qu'ils le diminuaient en le peignant sous de
telles couleurs; ils admiraient la ruse quand elle avait réussi, et
estimaient doublement le héros qui joignait au courage intrépide les
ressources d'un esprit ingénieux et délié. Ne nous étonnons donc
pas de la physionomie atroce que nous trouvons à Clovis chaque
fois que nous le rencontrons dans les récits populaires: ses
admirateurs barbares l'ont fait à leur image.
Si maintenant on veut bien accorder à la critique le droit qu'on a
laissé pendant quatorze siècles à la poésie, et lui permettre de
reconstituer à son tour l'histoire telle qu'elle a dû se passer, nous
formulerons nos conclusions comme suit. Le fait historique jeté en
pâture aux imaginations des barbares du sixième siècle, c'est
l'assassinat mystérieux du roi Sigebert dans la forêt de Buchonie,
qui eut lieu vraisemblablement dans l'automne de 507. A la nouvelle
de sa mort, son fils Chlodéric, qui, peut-être, était encore occupé au
fond de l'Aquitaine à combattre les Visigoths, accourut à la hâte;
mais il périt lui-même au milieu des troubles qu'avait provoqués la
mort de son père. Ce double meurtre rendait vacant le trône des
Ripuaires, et Clovis se présenta pour recueillir la succession de ses
deux parents. Comme il était le plus proche, peut-être le seul héritier
légitime, qu'il avait assez de puissance pour s'imposer, et que les
Ripuaires étaient honorés de mettre à leur tête un souverain si
illustre, il fut acclamé avec enthousiasme, et élevé sans retard sur le
pavois. Le trône de Cologne sera devenu vacant vers 508, et la
nouvelle que Clovis en aura reçue à Bordeaux ne doit pas avoir
contribué pour peu à son brusque retour vers le Nord.
Qu'on ne s'étonne pas de la hardiesse de ces conjectures, et de
l'énormité des amputations qu'avec le scalpel de la critique nous
venons de faire au récit traditionnel. Il faut s'être rendu compte, par
une étude assidue, des prodigieuses altérations que l'esprit épique
fait subir à l'histoire, pour reconnaître que nous n'avons pas abusé
de la liberté de l'hypothèse. Dans l'histoire poétique de Gondebaud
et de Clotilde, le résidu historique représente vis-à-vis de la légende
une proportion plus faible encore, et nul ne se serait avisé d'aller
dans la voie des négations aussi loin que les faits constatés nous
ont menés presque à notre insu.
L'annexion du royaume des Ripuaires couronnait la carrière
conquérante du fils de Childéric. Maintenant, tous les peuples de
race franque se trouvaient réunis sous sa loi. Les bases étaient
jetées d'un vaste empire qui, ayant la Gaule pour centre, rayonnerait
peu à peu sur le reste de l'Europe occidentale et centrale. En
attendant, Clovis se trouvait être le roi le plus puissant de la
chrétienté. Son autorité était reconnue depuis le Wahal jusqu'aux
Pyrénées. Il était parvenu à faire ce que l'Empire avait en vain
essayé à tant de reprises: imposer une même autorité à la Gaule et
à la Germanie. Ce fut un résultat immense, car l'action et la réaction
de ces deux pays l'un sur l'autre, pendant les premiers siècles, c'est,
en quelque sorte, le meilleur de leur histoire et de l'histoire de
l'Europe. Leur coexistence séculaire sous la même dynastie jusqu'au
traité de Verdun, en 843, leur a imprimé un cachet de parenté
indélébile qu'elles ont conservé après dix siècles d'existence
séparée. D'autre part, la Ripuarie fut la réserve du peuple franc. Il
viendra un jour, dans les annales de ce grand peuple, où le rameau
salien paraîtra desséché, et où l'on pourra croire que la Gaule est
prête à retomber dans l'anarchie. Alors surgiront les héros qui
donneront à la nation sa seconde dynastie, celle des Pépins et des
Charles, enfants du pays ripuaire. Ils continueront l'œuvre
commencée par les Saliens, ils réapprendront aux Francs le chemin
des expéditions victorieuses, et Charlemagne sera le nouveau
Clovis. En effet, si l'Empire d'Occident se trouve achevé le jour où le
pape Léon III posa la couronne impériale sur la tête du fils de Pépin,
il ne faut pas oublier qu'il a été commencé pendant les années où
Soissons, Toulouse et Cologne passaient tour à tour, avec leurs
royaumes, sous l'autorité du héros mérovingien.
VI
LE CONCILE D'ORLÉANS
Comme on l'a vu dans les chapitres précédents, l'histoire ne nous a
conservé de Clovis que le souvenir de ses principaux faits d'armes,
souvent fort défigurés par la tradition populaire, et quelques
épisodes de sa vie privée, qui n'ont pas moins souffert. Et c'est tout.
Son action politique, son rôle de législateur, de diplomate et
d'homme d'Etat nous échappent entièrement. L'attention des
contemporains ne se portait pas sur ces sujets austères et abstrus;
ce qui les passionnait, c'était le héros seul, et non les destinées
collectives dont il avait la responsabilité. A leurs yeux, l'histoire de la
fondation du royaume franc se résumait dans la biographie du roi.
Nous devrions donc terminer ici l'histoire de Clovis, si nous en
demandions les éléments à ceux-là seuls qui se sont attribué la
mission de nous la raconter. Heureusement il y a eu, à côté des
annalistes, un témoin qui avait au plus haut degré, avec le souci des
intérêts généraux, celui d'en léguer le souvenir à la postérité.
L'Église, dès son origine, avait pris l'habitude de consigner par écrit
tout ce qui se passait de mémorable dans son sein, et elle
conservait avec soin les documents qui rendaient témoignage de
ses œuvres. Quelques pages des archives qu'elle tenait au sixième
siècle en Gaule nous permettent d'envisager, une fois au moins, le
fondateur de la monarchie franque sous un autre aspect que celui du
guerrier armé de la francisque et combattant à la tête de son armée.
Nous apprenons d'abord, par une circulaire royale adressée à tous
les évêques du royaume, qu'après la guerre d'Aquitaine, le roi,
obéissant à des préoccupations toutes chrétiennes, s'efforça de
soulager autant qu'il était en son pouvoir les souffrances des
populations qui avaient été le plus éprouvées. L'édit par lequel, on
s'en souvient, il avait pris sous sa protection spéciale les personnes
et les biens de l'Église avait été violé en plus d'une rencontre;
d'autre part, le droit de la guerre avait sévi avec toute sa rigueur, et
quantité de prisonniers avaient été entraînés hors de leur pays dans
toutes les provinces du royaume. Il y avait donc, maintenant que la
lutte était terminée, un double devoir à remplir: assurer force de loi
aux généreuses dispositions du monarque, et faciliter le libre
exercice des droits de la charité. En conséquence, une nouvelle
circulaire fut adressée aux évêques, dans laquelle le roi leur
rappelait la protection qu'il avait accordée aux églises, en déclarant
qu'il leur appartenait de s'en prévaloir. Toute personne
ecclésiastique, religieuse, veuve, clerc ou fils de clerc, ou serf
d'église, si elle avait été faite captive contrairement à la paix du roi,
c'est-à-dire aux dispositions indiquées ci-dessus, devait être rendue
sans retard à la liberté: il suffisait pour cela que son évêque la
réclamât dans une lettre scellée de son sceau, et sous la foi du
serment. Cette dernière condition, disait Clovis, était imposée par
son peuple, à raison des fraudes nombreuses auxquelles donnait
lieu la faveur royale. Quant aux laïques faits prisonniers en dehors
de la paix du roi, c'est-à-dire qui n'avaient pas été mis sous sa
protection spéciale, l'évêque pouvait, s'il le trouvait bon, donner à qui
il voulait mission de les racheter[217].
[217] Sirmond, Concilia Galliæ, t. I, p. 176; Boretius, Capitularia regum francorum,
t. I, p. 1.
Cette lettre, on n'en peut pas douter, provoqua un grandiose
mouvement de rachat. Tout le pays franc fut sillonné de mandataires
épiscopaux allant jusque dans les cantons les plus reculés, soit
réclamer des prisonniers injustement détenus, soit offrir l'or de
l'Église pour rendre la liberté aux captifs. Il y eut sans doute des
prélats qui voulurent faire eux-mêmes leur tournée de rédemption,
comme saint Epiphane de Pavie, et l'on peut croire que plus d'un, se
conformant aux recommandations des conciles, suivit l'exemple de
Césaire d'Arles et vendit les vases sacrés de son église pour
racheter des chrétiens prisonniers. Nous savons de même, par la
Vie de saint Eptade, que ce simple prêtre déploya une admirable
activité dans ce rôle de libérateur, et qu'il fit tomber les fers d'une
multitude de captifs disséminés dans toutes les provinces[218]. Ainsi
l'Église marchait sur les pas de l'État pour fermer les blessures qu'il
avait faites, et pour atténuer par sa charité des maux qu'elle n'avait
pu empêcher.
[218] Voir ci-dessus.
L'édit que nous venons d'analyser est le seul qui nous reste de
Clovis: il est digne d'ouvrir la série des actes officiels de la
monarchie très chrétienne. N'est-il pas instructif, tout au moins, de
constater qu'au moment où la légende le montre fendant la tête de
ses proches et ourdissant contre eux les plus viles intrigues,
l'histoire authentique nous initie aux nobles préoccupations qui
dictent sa circulaire aux évêques? Si des documents de ce genre
nous avaient été conservés en plus grand nombre pour le règne de
Clovis, dans quelle autre lumière nous apparaîtrait ce personnage,
et avec quelle netteté supérieure se dessinerait son histoire pleine
d'ombres et de lacunes!
Hâtons-nous d'ajouter, toutefois, que nous possédons encore un
autre acte, plus important et plus solennel, où le roi civilisateur
s'affirme dans la plénitude de son activité royale, je veux dire les
canons du concile d'Orléans, réuni par son ordre en l'an 511.
L'importance de cette assemblée est considérable. Les conciles,
c'était pour l'Église l'instrument par excellence de gouvernement et
de législation. Après les guerres, les invasions, les conquêtes,
l'établissement définitif des Visigoths au sud et des Francs au nord,
après tant de troubles et de désordres qui avaient ébranlé les
assises de la vie publique, il était temps que l'Église des Gaules se
ressaisît. Le concile d'Orléans marque le retour d'une vitalité
régulière et tranquille dans ce grand corps, dont l'organe principal
recommence à fonctionner librement. En renouant la chaîne de la
tradition conciliaire, l'épiscopat franc faisait œuvre de régénération
sociale et politique à la fois.
Le concile d'Orléans n'eut pas le caractère des conciles ordinaires
qui se réunissaient périodiquement, en conformité des canons,
autour d'un même métropolitain. En d'autres termes, ce ne fut pas
un concile provincial, mais un concile national, auquel furent
convoqués tous les évêques sujets de Clovis, et qui délibéra sur les
intérêts religieux de tout le royaume franc.
On ne s'étonnera pas de voir, dans une assemblée purement
religieuse, les groupements se faire selon les cadres de
l'administration civile. La hiérarchie ecclésiastique n'y répugnait pas,
trouvant un surcroît d'autorité dans le caractère national que
prenaient par là ses délibérations. Le concile d'Agde, réuni en 506
autour de saint Césaire d'Arles, avait été, lui aussi, un concile
national du royaume visigoth, et de même celui qui, en 517, devait
se tenir à Épaone, rassembla autour de saint Avitus tout l'épiscopat
du royaume burgonde. Seulement, le concile d'Orléans fut convoqué
par le roi des Francs, et non par un des métropolitains de son
royaume[219]. Roi catholique d'un peuple catholique, Clovis ne
pouvait ni se désintéresser des délibérations du concile, ni rester
étranger aux préparatifs d'une si grande entreprise. Les relations
entre l'Église et lui étaient empreintes d'une confiance et d'une
cordialité qui faisaient de son intervention une nouvelle preuve de
son dévouement. C'est lui qui convoqua les prélats, et qui même, à
ce qu'il paraît, fixa leur ordre du jour dans une série de questions qui
leur furent soumises[220]. Les canons qu'ils arrêtèrent ne sont, en
définitive, que leur réponse au questionnaire royal.
Incontestablement, une participation si active aux travaux de
l'épiscopat franc suppose que le roi est intervenu à l'instance des
évêques eux-mêmes, pour prêter à leurs délibérations une plus
grande solennité, et, le cas échéant, pour leur garantir une sanction
efficace. D'ailleurs, il était l'héritier des empereurs, et l'on était
habitué, dans les provinces, à la collaboration des deux pouvoirs
dans les travaux de ce genre.
[219] Voir la lettre des Pères du concile à Clovis, et aussi leur introduction dans
Sirmond, Concilia Galliæ, t. I, pp. 177 et 178, et Maassen, Concilia ævi
merovingici, p. 2. En 567, le concile de Tours, c. 22, citant un canon du concile
d'Orléans 511, dit: In synodo Aurelianense, quam invictissimus rex Chlotveus fieri
supplicavit. (Maassen, p. 132.)
[220] Secundum voluntatis vestræ consultationem et titulos quos dedistis ea quæ
nobis visum est definitione respondimus. Sirmond, I, p. 177; Maassen, p. 2.
Tout porte à croire que l'idée du concile partit des rangs de
l'épiscopat du royaume d'Aquitaine. C'est immédiatement après la
conquête de ce royaume qu'il se réunit, et cela dans une ville qui
servait de frontière entre ce pays et la France proprement dite. Les
seuls intérêts d'ordre local qui firent l'objet de quelques dispositions
conciliaires sont relatifs aux rapports entre les deux confessions
religieuses[221], qui n'étaient en opposition que dans la Gaule
méridionale. Enfin, la présidence du concile fut déférée, non pas à
saint Remi, qui n'y assista même pas, ni non plus à saint Mélaine de
Rennes, comme le soutient à tort un biographe de ce saint[222], mais
à Cyprien, archevêque de Bordeaux et métropolitain de la première
Aquitaine.
[221] Voir ci dessous, p. 146.
[222] Vita sancti Melanii.
Ce choix est significatif, si l'on se rappelle que Clovis passa à
Bordeaux tout l'hiver de 506-507, et qu'il dut par conséquent avoir
les rapports les plus fréquents avec le métropolitain d'un pays qu'il
avait tant d'intérêt à s'attacher. Comment pourrait-on se dérober à
l'idée que la question du concile a dû être agitée dès lors dans les
conférences du roi et du prélat?
Et s'il en est ainsi, il sera bien permis de faire un pas de plus.
Rappelons-nous que peu de temps auparavant l'évêque de
Bordeaux avait donné l'hospitalité à une autre illustration, amenée
dans les murs de sa ville épiscopale par l'exil, il est vrai, et non pas
la victoire. Nous voulons parler de saint Césaire d'Arles, qui a su
conquérir, pendant son séjour dans la capitale du royaume visigoth,
non-seulement le respect du roi barbare, mais sans doute aussi le
respect, l'affection et l'admiration de tous ceux qui l'approchèrent.
Certes, Cyprien de Bordeaux n'a pas été le dernier à subir le charme
de ce saint personnage, il est peu douteux qu'il n'ait été au courant
du grand projet que Césaire portait alors dans sa tête et qu'il réalisa,
avec l'autorisation du roi, dès qu'il fut rentré dans sa ville épiscopale:
le concile national d'Arles en 506. Cyprien assista à cette auguste
assemblée, et son nom est le premier qui figure, après celui de
Césaire lui-même, parmi ceux des évêques qui en ont signé les
actes. Ils n'est donc pas téméraire de considérer Cyprien comme un
véritable collaborateur de Césaire dans l'entreprise, alors délicate et
difficile, de réunir, au lendemain de la persécution, tous les évêques
catholiques du royaume visigoth[223].
[223] C'est l'opinion fort probable de Malnory, Saint Césaire, p. 66.
Et, dès lors, il semble bien que nous soyons sur la voie de
l'inspiration première d'où est sortie la réunion du concile d'Orléans.
Cyprien de Bordeaux n'a été que l'instrument d'un plus grand que
lui, qui est saint Césaire lui-même. On sait que cet illustre
confesseur n'était pas seulement par ses vertus, par l'ardeur de son
zèle pour le salut des âmes et par la force de sa parole partout
écoutée, quelque chose comme le prophète des Gaules: il était
encore investi, par la confiance des souverains pontifes, de la
mission de les représenter en Gaule avec la qualité de vicaire du
Saint-Siège. Le décret du pape Symmaque qui lui avait conféré cette
dignité, déjà possédée avant lui par plusieurs de ses prédécesseurs
depuis le commencement du cinquième siècle, marquait
expressément parmi ses charges les plus importantes, la
convocation des conciles. C'est donc en acquit d'un devoir que
l'archevêque d'Arles s'attachait à stimuler, à raviver une institution
qui avait été si florissante au cinquième siècle, et l'on ne sera pas
étonné, connaissant son zèle et son abnégation, qu'il ait étendu
l'activité de sa propagande, même sur les pays où il n'avait pas à
jouer de rôle personnel[224]. Ainsi s'expliquent aussi les nombreuses
et frappantes analogies que les historiens ont relevées entre le
concile d'Orléans et celui d'Agde[225]: tous deux d'ailleurs sont des
assemblées nationales destinées à réunir tous les prélats d'un
même royaume, tous deux ont pour mission d'organiser la vie
religieuse dans des pays où elle vient de traverser de pénibles
crises. On peut donc en quelque sorte toucher du doigt le lien qui
rattache au vicariat des Gaules, et par lui à la papauté, la grandiose
manifestation de vitalité religieuse par laquelle se clôturent les
annales du premier roi chrétien des Francs[226].
[224] Je crois devoir citer ici en entier le passage de Malnory, Saint Césaire, p.
114; après ce que je viens de dire, l'assertion de cet auteur que je souligne dans
ma citation ne paraîtra plus fondée: «Stimuler partout la réunion de ces
assemblées (des conciles) était la plus importante des charges tracées dans les
privilèges de Césaire, et on peut croire qu'il y déploya tout son zèle. C'est à lui que
se rattache le mouvement extraordinaire de conciles régionaux et nationaux qui se
produit des deux côtés des Pyrénées et surtout en Gaule, à cette époque. Seul
d'entre ceux qui ont été tenus de son vivant en Gaule, le concile I d'Orléans, en
511, réuni sur un ordre personnel de Clovis, qui fait ici la figure d'un nouveau
Constantin, peut être considéré comme le produit d'une inspiration spéciale
probablement ecclésiastique, mais qui paraît bien être indépendante de Césaire.
Tous les autres, depuis celui d'Epaone en Burgondie (517) jusqu'au IVme
d'Orléans (541), antérieur de deux ans à la mort de Césaire, se rattachent si
visiblement par leur dispositif aux conciles de la province d'Arles, et en particulier
aux statuts de Césaire et au concile d'Agde, qu'on dirait une conspiration de toute
la Gaule pour l'adoption de la discipline antérieure. Le fait que Césaire n'a plus
présidé, après Agde, de concile étranger à sa province, n'autorise pas à dire que
des assemblées telles que celles d'Epaone, Clermont, Orléans ii-iv, se sont
tenues tout à fait en dehors de lui. Les grands métropolitains qui ont convoqué et
présidé ces assemblées ont certainement subi son influence plus ou moins
avouée.»
[225] Arnold, Cæsarius non Arelate, p. 231, note 736.
[226] S'il fallait en croire la vie de saint Mélaine, évêque de Rennes, c'est ce saint
qui aurait joué le rôle principal au concile d'Orléans. Voici comment elle s'exprime
dans sa recension A, qui est la plus ancienne (cf. l'Appendice): Sinodum vero in
Aurelianense civitate XXXII épiscoporum congregavit (Chlodovechus), qui
canones statuerunt, quorum auctor maxime sanctus Melanius prædicator
Redonenis episcopus extitit, sicut etiam in praefatione ejusdem concilii hactenus
habetur insertum. Mais ce renseignement est emprunté à peu près textuellement à
un document du huitième ou neuvième siècle intitulé Adnotatio de synodis, et c'est
ce document que la vie appelle præfatio. L'Adnotatio elle-même, bien loin de
consigner ici un renseignement authentique, s'est bornée à induire le rôle de saint
Mélaine de la place qui lui est donnée parmi les signataires du concile d'Orléans
dans une pièce intitulée: De episcopis qui suprascriptos canones consenserunt et
subscripserunt, et par conséquent son témoignage s'évanouit en fumée. C'est ce
que démontre d'une manière lumineuse M. Lippert dans son beau mémoire
intitulé: Die Verfasserschaft der Kanones Gallischer Concilien des v und vi
Jahrhunderts (Neues Archiv, t. XIV, 1889), auquel je renvoie le lecteur. Sa
démonstration me dispense de réfuter les amplifications d'une recension
postérieure du Vita Melanii (C) qui va jusqu'à prétendre que saint Mélaine, fut mis
à la tête du concile d'Orléans (eum sibi in primatem praefecerunt p. 534) et celles
de Vincent de Beauvais qui, lui (Speculum historiale, xxi, c. 23), croit savoir que
c'est le même saint qui a réuni le concile (hanc synodum 32 episcoporum
congregavit sanctus Melanius.)
Du reste, le premier concile national du royaume de Clovis fut bien
loin d'être une assemblée plénière de l'épiscopat franc. Sur soixante-
quatre sièges épiscopaux que contenait alors le royaume, il vint à
Orléans trente-deux évêques, c'est-à-dire tout juste la moitié, et il ne
s'y trouva que six des dix métropolitains. La plus forte représentation
fut celle des trois Lyonnaises, qui formaient le noyau de la
monarchie: elles donnèrent seize présents contre sept absents.
Dans les deux Aquitaines, récemment annexées, nous relevons neuf
présents et cinq absents. Par contre, les douze diocèses de la
Novempopulanie ne comptaient que trois représentants, à savoir, les
évêques d'Eauze, d'Auch et de Bazas. Des diocèses de la région
pyrénéenne, pas un seul n'avait répondu à la convocation du roi des
Francs. Comminges, Bénarn, Oloron, Lectoure et Couserans
s'étaient abstenus, et il en était de même de Dax, de Buch[227],
d'Aire et de Tarbes.
[227] M. Longnon, Atlas historique de la France, texte explicatif, p. 151, doute
cependant que la civitas Boiatium ait jamais formé un évêché.
Ce qui est très frappant, c'est l'absence totale des évêques des deux
Germanies et de la première Belgique. Mayence, Trèves, Cologne,
Metz, Toul, Verdun et Tongres, ces sièges dont plusieurs ont eu un
passé si glorieux et des chrétientés si florissantes, se tiennent
absolument à l'écart. La seconde Belgique n'a envoyé que les
évêques de ses cités méridionales, à savoir, Soissons, Vermand,
Amiens et Senlis; quant aux huit autres sièges, qui sont Reims,
Laon, Châlons-sur-Marne, Arras, Cambrai, Tournai, Thérouanne,
Beauvais et Boulogne, la place de leurs évêques reste vide sur les
bancs du concile et au bas de ses actes. Que quelques-uns de ces
prélats, et en particulier celui de Reims, aient été empêchés de se
trouver à la réunion, cela est bien probable; mais il est difficile
d'admettre que ce fût le cas pour tous, surtout si l'on réfléchit que les
diocèses non représentés constituent, au nord comme au sud, un
seul groupe géographique. Tirez une ligne qui passerait au nord
d'Amiens, de Vermand et de Soissons, et qui reviendrait vers le sud
à l'ouest de Tongres, et vous aurez délimité la frontière
septentrionale et orientale de l'ensemble des diocèses dont les
pasteurs légiférèrent à Orléans. En d'autres termes, le vieux
royaume des Francs Saliens n'a pas envoyé un seul prélat au
concile. C'est là un indice bien significatif de l'extinction de la
hiérarchie catholique dans ce pays, depuis sa conquête par les rois
mérovingiens[228].
[228] Le canon 10 du troisième concile de Paris, tenu entre 556 et 573, veut que
les actes du concile soient signés même par les évêques qui n'ont pu y assister.
(Sirmond, I, p 317. Maassen, p. 145.) Si cette disposition n'était pas nouvelle, on
pourrait renforcer singulièrement l'argument que je tire de l'absence des noms des
évêques septentrionaux. Mais je crois que ce serait une conclusion erronée: on ne
voit pas qu'avant le concile de Paris on se soit conformé à la règle qu'il trace;
d'ailleurs, il est certain que tous les évêques francs ne furent pas à Orléans,
puisque saint Remi y manqua.
La nature des travaux du concile suggère la même conclusion. Il n'y
est question aucunement des besoins spéciaux de l'Église dans les
provinces où il restait des populations païennes à convertir. Toutes
les résolutions supposent des contrées où la religion chrétienne est
sans rivale. On se borne à légiférer pour des diocèses existants; il
n'est point parlé de ceux qui ont disparu dans la tourmente du
cinquième siècle; le nom du paganisme et la mention des
superstitions païennes ne viennent pas une seule fois sous la plume
des greffiers du synode. Pas une seule fois non plus, les sollicitudes
des Pères ne vont au delà des régions de langue et de civilisation
romaines. La terre des Francs germaniques ne semble pas plus
exister pour eux que si elle avait été engloutie par les flots de
l'Océan.
Après plusieurs jours de délibération, le concile, qui avait siégé
probablement dans la cathédrale Sainte-Croix, clôtura ses travaux le
dimanche 10 juillet 511. Il avait arrêté trente et un canons que tous
les évêques, Cyprien de Bordeaux et les autres métropolitains en
tête, signèrent avant de se séparer. Ces canons embrassaient un
ensemble varié de résolutions se rapportant à la vie chrétienne, et
en particulier au gouvernement ainsi qu'à l'administration de l'Église;
nous les passerons en revue dans un ordre méthodique.
Parmi les questions soumises aux délibérations des prélats, il y en
avait deux qui présentaient un intérêt particulier pour l'État: celle du
droit d'asile et celle du recrutement du clergé. Il s'agissait de
délimiter en cette manière les frontières des deux pouvoirs, ou, pour
mieux dire, d'élaborer des solutions qui pussent être accueillies par
l'autorité politique.
En ce qui concerne le droit d'asile, l'assemblée confirma les
dispositions inscrites dans le code Théodosien, et reproduites dans
la loi des Burgondes et dans celle des Visigoths. Elle proclama le
caractère inviolable non seulement du sanctuaire lui-même, mais
encore du vestibule ou atrium qui le précédait, et des habitations
ecclésiastiques qui entouraient le vestibule. La raison de cette
extension de l'immunité est manifeste: pour que le droit d'asile ne
devînt pas illusoire, il fallait que le réfugié trouvât un logement dans
le pourpris de l'édifice sacré; sinon, il aurait pu être tenté de profaner
le lieu saint lui-même en y dressant sa table et son lit. Le concile
défendit à l'autorité publique de pénétrer dans les cloîtres pour y
chercher le coupable, que ce fût un homicide, un adultère, un voleur,
un ravisseur ou un esclave fugitif; il défendit aussi au clergé de le
livrer, avant que celui qui le poursuivait eût prêté le serment
solennel, sur l'Évangile, qu'il ne lui infligerait pas de châtiment
corporel et qu'il se contenterait, soit de reprendre son esclave, soit
de recevoir une compensation. Si l'homme qui avait prêté ce
serment le violait, il devait être excommunié et séparé de la société
de tous les catholiques. Si, d'autre part, le coupable ne voulait pas
convenir d'une composition et s'enfuyait de l'enceinte, on ne pouvait
pas en rendre responsable le clergé. Si c'était un esclave, et qu'il
refusât de sortir après que son maître avait prêté le serment requis,
alors celui-ci avait le droit d'aller s'emparer de sa personne.
Telle fut la forme que le concile d'Orléans donna au droit d'asile dans
le royaume franc[229]. On conviendra qu'à une époque d'anarchie il
constituait une des plus précieuses garanties d'ordre public, et un
des meilleurs moyens d'adoucir les mœurs. Il ne supprimait pas le
châtiment des coupables, comme on l'a dit souvent; il en atténuait la
rigueur cruelle, il mettait un obstacle à l'exercice illimité de la
vengeance privée, et il préparait de loin la substitution du règne du
droit aux violences de l'arbitraire.
[229] Canons 1, 2 et 3, dans Sirmond, I, p. 178; Maassen, pp. 2 et 3.
La question du recrutement du clergé n'était pas moins complexe.
En principe, l'Église a toujours affirmé son droit de choisir ses
ministres et condamné toute entrave à la liberté des vocations
ecclésiastiques. En fait, certains intérêts politiques et privés étaient
venus mettre des restrictions à l'usage de ce droit. Sous l'Empire
romain, beaucoup de gens entraient dans le clergé pour jouir de ses
immunités, et pour se dérober à l'écrasant fardeau des charges
civiles qui pesaient sur la bourgeoisie. Pour les curiales des
municipes, ces éternels souffre-douleur de la fiscalité, la cléricature
était devenue une espèce d'asile d'un nouveau genre. On sait
l'acharnement avec lequel l'Empire poursuivait, partout où ils
cherchaient à lui échapper, ces malheureux qui lui répondaient de la
rentrée de ses impôts. Aussi ne sera-t-on pas étonné que Constantin
ait défendu, par une loi de 320, l'entrée des curiales dans le
clergé[230]. L'interdiction était radicale, et, pendant tout le quatrième
siècle, elle fut tour à tour atténuée, supprimée, rétablie et renforcée
par les empereurs: encore à la date de 458, Majorien y ajoutait des
dispositions nouvelles[231]. En une matière aussi délicate, les
intérêts de l'Église et ceux de l'État, également impérieux les uns et
les autres, semblaient ne pas pouvoir être conciliés; satisfaire ceux-
ci, c'était porter atteinte au recrutement du sacerdoce; déférer à
ceux-là, c'était priver l'État de ses agents les plus indispensables.
[230] L'existence de cette loi, non conservée, est attestée au code Théodosien,
XVI, ii, 3.
[231] Novellæ Majoriani, t. I, au code Théodosien.
Mais la liberté des vocations ecclésiastiques rencontrait encore un
autre obstacle dans l'institution de l'esclavage. Introduire un esclave
dans le clergé, c'était causer à son maître un tort semblable à celui
que l'on causait à l'État en ordonnant un curiale. Aussi la loi
ecclésiastique avait-elle de tout temps reconnu le droit du maître
dont l'esclave avait été ordonné sans son autorisation à le réclamer,
en dépit du caractère sacerdotal dont il était revêtu. Elle-même, dans
le cas où le maître consentait à l'entrée de son esclave dans le
clergé, ne lui accordait les ordres sacrés qu'après qu'il avait été
affranchi au préalable. L'esprit de ces dispositions se retrouve, au
cinquième siècle, dans les constitutions impériales de Valentinien III
en Occident[232], et de Zénon en Orient[233]: l'une et l'autre
défendent de conférer les ordres sacrés aux esclaves, même du
consentement du maître, attendu, dit la dernière, qu'il peut leur
procurer l'accès du sacerdoce en leur donnant la liberté[234].
[232] Novellæ Valentin. III, tit. XII.
[233] Cod. Justinian., I, iii, 36.
[234] Servos sane sociari clericorum consortiis, volentibus quoque et
consentientibus dominis, modis omnibus prohibemus, quum liceat eorum dominis,
data prius servis libertate, licitum eis ad suscipiendos honores clericorum iter, si
hoc voluerint, aperire. Ibid., l. c.
Tel était, au moment où s'ouvrit le concile d'Orléans, l'état de cette
délicate question du recrutement du clergé. Le concile ne s'écarta
pas des principes qui avaient inspiré en cette matière la législation
canonique et celle de la société civile; mais il édicta des mesures qui
en devaient, sans froisser les droits des pouvoirs publics ou privés,
amener une application plus modérée et plus compatible avec la
liberté de l'Église. Le quatrième canon stipula qu'à l'avenir aucun
homme libre ne serait reçu dans le clergé sans l'ordre du roi ou
l'autorisation du comte, excepté toutefois les fils, petits-fils et arrière-
petits-fils de prêtres, que l'évêque pourrait ordonner s'il voulait[235].
C'était non seulement soustraire à l'interdiction une bonne partie de
ceux à qui elle pouvait s'appliquer; mais encore, par le privilège
accordé au pouvoir royal, mettre celui-ci à même d'élargir les lois en
dispensant de leur application. Le huitième canon était conçu dans
le même esprit: tout en respectant les droits des maîtres, il trouvait
un moyen ingénieux de les combiner avec ceux de l'Église. Il
décidait que si l'évêque avait, en connaissance de cause, conféré le
diaconat ou la prêtrise à quelque esclave à l'insu de son maître, il
était tenu de restituer à celui-ci le double de son prix, mais que
l'ordination restait valide. Il en était de même si l'évêque avait ignoré
la condition servile de l'ordinand; dans ce cas, le dommage devait
être réparé par ceux qui l'avaient présenté au consécrateur[236].
C'est ainsi qu'avec des ménagements pleins de douceur, mais avec
une claire conscience de son but, l'épiscopat franc défaisait maille
par maille l'étroit tissu dans lequel la législation civile enfermait la
libre allure de l'Église. Il ne faisait aucune opposition formelle et
catégorique aux décisions du pouvoir civil; mais, avec un art exquis,
il plaçait à côté du fait légal un principe qui en impliquait la négation,
laissant au temps le soin de supprimer la contradiction en ramenant
le fait au principe.
[235] Canon 4, Sirmond, I, p. 179; Maassen, p. 4.
[236] Canon 8, Sirmond, p. 180; Maassen, p. 5.
Les autres délibérations du concile d'Orléans roulèrent toutes sur

des questions exclusivement religieuses ou ecclésiastiques. Un
canon proscrivit une superstition que l'antiquité païenne avait léguée
au monde chrétien, et qui était pratiquée même dans le clergé
catholique: c'était une espèce particulière de divination, qui
consistait à ouvrir au hasard les Livres saints, et à attribuer la valeur
d'un oracle aux premiers versets qu'on y lisait[237]. Condamné déjà
en 465, par les Pères du concile de Vannes[238], l'abus fut de
nouveau interdit à Orléans sans qu'on parvînt à l'extirper, puisque,
vers la fin du siècle, nous le voyons pratiqué encore par un homme
de la sainteté et de l'intelligence de Grégoire de Tours. Il ne faut pas
crier à la stérilité des dispositions conciliaires. En général, on peut
dire qu'il n'y en a pas eu qui n'ait dû être édictée plusieurs fois avant
de triompher; on doit, au contraire, reconnaître l'excellence d'une
institution grâce à laquelle les évêques condamnaient réunis ce
qu'ils pratiquaient isolés.
[237] Canon 30, dans Sirmond, I, p. 183; Maassen, p. 9.
[238] Canon 16, dans Sirmond, I, p. 140.
Une grande largeur d'esprit présida au règlement des difficultés
relatives à l'arianisme. Le concile favorisa de tout son pouvoir la
conversion des hérétiques, en permettant à leurs prêtres, s'il
n'existait pas d'autre empêchement, de conserver leur rang lorsqu'ils
passaient dans l'Église orthodoxe. Pour les sanctuaires ariens, il
décida qu'après avoir été consacrés par l'évêque ils pouvaient être
affectés au culte catholique[239]. On ne doit pas douter que ces deux
mesures, qui ouvraient si larges les portes de la communion des
saints à tous les ariens de bonne volonté, n'aient contribué
efficacement à l'extirpation de l'hérésie dans la Gaule méridionale.
[239] Canon 10, Sirmond, I, p. 180; Maassen, p. 5.
Le culte et la liturgie furent l'objet de plusieurs importants canons. Le
concile exigea que les fidèles assistassent à la messe entière, et
n'en sortissent pas avant d'avoir reçu la bénédiction du prêtre[240]. Il

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Multiple Choice Questions

2. Testing a prototype of a new product is an example of an activity at which of the following

3. Setting up equipment is an example of an activity at which of the following levels?

6. Arranging for a shipment of a number of different products to a customer is an example of

7. Human resource management is an example of an activity at which of the following

8. Which of the following would be classified as a product-level activity?

11. What is a duration driver?

12. What is a transactiondriver?

13. Which of the following is NOT a limitation of activity-based costing?

[(20,000/500) * 100 + (37,000/1,000) * 800 + (91,200/3,800) * 800]/8,000 = $6.60.

[(24,000/600)*400 + (36,000/900)* 200 + (81,200/3,800)* 3,000]/7,000 = $14.92.

[(9,000/750) * 400 + (12,000/500) * 100 + 48,000/1,600 * 400]/2,000 = $9.60.

[(9,000/750) * 350 + (12,000/500) * 400 + (48,000/1,600) * 1200]/3,000 = $16.60.

Distribution of Resource Consumption:

Activity Cost Pools

360,000 *.25 + 240,000 *.6 = $234,000.

360,000 *.65 + 240,000 *.2 = $282,000.

360,000 *.1 + 240,000 *.2 = $84,000.

Distribution of Resource Consumption:

Activity Cost Pools

480,000 *.05 + 100,000 *.6 = $84,000.

480,000 *.85 + 100,000 *.2 = $428,000.

480,000 *.1 + 100,000 *.2 = $68,000.

Distribution of Resource Consumption:

Activity Cost Pools

600,000 *.15 + 220,000 *.6 = $222,000.

600,000 *.75 + 220,000 *.2 = $494,000.

600,000 *.1 + 220,000 *.2 = $104,000.

Distribution of Resource Consumption:

Activity Cost Pools

400,000 *.35 + 200,000 *.5 = $240,000.

400,000 *.55 + 200,000 *.3 = $280,000.

400,000 *.1 = 200,000 *.2 = $80,000.

Distribution of Resource Consumption:

Activity Cost Pools

600,000 *.45 + 300,000 *.4 = $390,000.

600,000 *.5 + 300,000 *.45 = $435,000.

600,000 *.0.05 + 300,000 *.15 = $75,000.

Distribution of Resource Consumption:

Activity Cost Pools

Activity Cost Pool Activity

(380,000 *.3 + 100,000 *.35)/3,000 = $49.67.

(380,000 *.6 + 100,000 *.45)/20 = $13,650.

Cost assigned = $380,000 *.3 = 114,000 and 380,000 *.6 = $228,000

Distribution of Resource Consumption:

Activity Cost Pools

Activity Cost Pool Activity

(580,000 *.4 + 200,000 *.35)/1,000 = $302.

(580,000 *.5 + 200,000 *.45)/30 = $12,667.

Distribution of Resource Consumption:

Activity Cost Pools

Activity Cost Pool Activity

(540,000 *.1 + 200,000 *.2)/4,000 = $23.50.

(540,000 *.8 + 200,000 *.6)/40 = $13,800.

[(24,000/600)400 + (36,000/900) 200 + (81,200/3,800)* 3,000]/7,000 = $14.92.

360,000 .25 + 240,000 .6 = $234,000.

360,000 .65 + 240,000 .2 = $282,000.

360,000 .1 + 240,000 .2 = $84,000.

480,000 .05 + 100,000 .6 = $84,000.

480,000 .85 + 100,000 .2 = $428,000.

480,000 .1 + 100,000 .2 = $68,000.

600,000 .15 + 220,000 .6 = $222,000.

600,000 .75 + 220,000 .2 = $494,000.

600,000 .1 + 220,000 .2 = $104,000.

400,000 .35 + 200,000 .5 = $240,000.

400,000 .55 + 200,000 .3 = $280,000.

400,000 .1 = 200,000 .2 = $80,000.

600,000 .45 + 300,000 .4 = $390,000.

600,000 .5 + 300,000 .45 = $435,000.

600,000 .0.05 + 300,000 .15 = $75,000.

(380,000 .3 + 100,000 .35)/3,000 = $49.67.

(380,000 .6 + 100,000 .45)/20 = $13,650.

Cost assigned = $380,000 .3 = 114,000 and 380,000 .6 = $228,000

(580,000 .4 + 200,000 .35)/1,000 = $302.

(580,000 .5 + 200,000 .45)/30 = $12,667.

(540,000 .1 + 200,000 .2)/4,000 = $23.50.

(540,000 .8 + 200,000 .6)/40 = $13,800.

$92,023/(800 .3hrs + 500 .2hrs) = $270.66.

$98,785/(1,700 .3hrs + 1,100 .6) = $84.43.

(80,000 .6 + 40,000 .5)/60,000 = $1.10.

(80,000 .3 + 40,000 .25)/5,000 = $6.80.

(70,000 .7 + 50,000 .45)/40,000 = $1.79.

(70,000 .2 + 50,000 .25)/1,000 = $26.50.

(70,000 .55 + 40,000 .45)/20,000 = $2.83.

(70,000 .35 + 40,000 .25)/7,000 = $4.93.

$71,286/(800.2 + 700.6) = $122.91.