1. Dalian Company provides the following information:Price per unit: $20Variable cost per unit: $8Fixed costs per month: $15000What is the breakeven point in terms of units sold 11501200187512502. A traditional costing system employs multiple allocation rates but an activity-based costing system uses only one single allocation rate.True False3. Formosa Steel Products makes steel building materials for export and uses an activity-based costing system to account for the indirect manufacturing costs of its various products. Indirect costs for the whole factory are broken down into three activities casting materials handling and milling. The cost driver for casting is machine hours; the cost driver for material handling is kilograms and the cost driver for milling is direct labor hours. Activity costs and volumes for the year were estimated as follows:Activity Cost Volume Casting $2000000 800000.00 Machine hoursMaterial Handling $400000 500000.00 KilogramsMilling $1120000 140000.00 Direct labor hoursOne product is steel reinforcement rods sold by the metric ton. Engineering reports show that one metric ton of steel reinforcement rods requires $100 of direct materials cost plus $50 of direct labor cost. Producing one metric ton of steel rods also requires 24 machine hours for casting weighs 1000 kilograms and requires 15 direct labor hours.What is the activity rate for the milling activity$8.00 per direct labor hr $4.40 per direct labor hr$0.13 per direct labor hr$0.80 per direct labor hr4. Two main benefits of activity-based costing are more accurate product cost information and more detailed information on costs of activities and the drivers of these costs.True False5. Which of the following statements is CORRECT with respect to variable cost per unit within the relevant rangeIt will increase as production decreases.It will decrease as production decreases.It will remain the same as production levels change. It will decrease as production increases.6. The first step in the activity-based costing system is to identify each activity and its total indirect cost.True False7. Peterson Company has both fixed and variable costs. If the volume doubles the total variable costs will double.TrueFalse8. Activity-based costing systems and traditional costing systems will produce the same results for product cost and profitability although they use different methods of calculation. TrueFalse9. Jurassic Manufacturers produces flooring material. Fixed costs are $5000 per month. Sales price for one unit of product is $50 and the variable cost per unit is $30. If Jurassic wishes to earn an operating income of $2000 how many units need to be sold27030032035010. The main difference between activity-based costing and traditional costing systems is that activity-based costing uses a separate allocation rate for each activity.True False
