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Figure 7-5. Rizzo Manufacturing produces two types of cameras: 35mm and digital. The cameras are produced using one continuous process. Four activities have been identified: machining, setups, receiving, and packing. Resource drivers have been used to assign costs to each activity. The overhead activities, their costs, and the other related data are as follows: Product Machine Hours Setups Receiving Orders Packing Orders 35mm 10,000 100 200 400 Digital 10,000 250 800 2,000 Costs $60,000 $40,000 $8,000 $24,000

4. Refer to Figure 7-5. Calculate the total overhead assigned to the 35mm cameras using only machine hours to calculate a plantwide rate. a. $132,000 b. $72,000 c. $60,000 d. $75,000 e. $66,000

5. Refer to Figure 7-5. Calculate a consumption ratio for setups on the digital cameras. a. 0.688 b. 0.730 c. 0.700 d. 0.714 e. 0.500

6. Refer to Figure 7-5. Using an activity rate for receiving based on receiving orders, assign receiving costs to the 35mm camera. a. $1,800 b. $2,000 c. $1,600 d. $1,200 e. $4,000

7. Refer to Figure 7-5. Calculate an activity rate for packing based on packing orders. a. $9.00 per packing order b. $10.00 per packing order c. $8.00 per packing order d. $60.00 per packing order e. $1.20 per packing order

8. A costing system that first assigns costs to activities and then to products is a. activity-based costing. b. job-order costing. c. activity-based management. d. volume based costing. e. nonunit-level costing.

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