NRNP 6640-14 Exam Learning Objectives
NRNP 6640-14 Exam Learning Objectives
Assess knowledge of concepts, principles, and theories related to the psychotherapy
This exam is a test of your knowledge in preparation for your certification exam. No
outside resources including books, notes, websites, or any other type of resource are to be
used to complete this exam. You are expected to comply with Walden University’s Code of
This exam will cover the following topics from the Wheeler textbook, which relate to
psychotherapy of individuals:
Supportive and Psychodynamic Psychotherapy
Humanistic-Existential and Solution-Focused Approaches to Psychotherapy
Psychotherapy With Children
Psychotherapy With Older Adults
Termination and Outcome Evaluation
By Day 7
Complete the Final Exam. Prior to starting the exam, you should review all of your
materials. There is a 2-hour time limit to complete this 76-question exam. You may only
attempt this exam once.
Submit Your Exam by Day 7
To submit your Exam:
Week 11 Exam
Congratulations! After you have finished all of the assignments for this week, you have
completed the course. Please submit your Course Evaluation by Day 7.
This chapter deals with the allocation of indirect costs to products. Product cost information helps managers
make numerous decisions, such as pricing, keeping or dropping a product, estimating the cost to make a
similar product, and determining how to reduce the costs of making products.
Activity-based costing assigns costs first to activities and then to the products based on each product’s
use of activities. Activity-based costing is based on the premise that products consume activities and
activities consume resources. Activity-based costing involves these four steps:
1. Identify the activities that consume resources and assign costs to those activities.
2. Identify the cost driver(s) associated with each activity.
3. Compute a cost rate per cost driver unit or transaction.
4. Assign costs to products by multiplying the cost driver rate by the volume of cost driver units
consumed by the product.
The following summarizes the key ideas tied to the chapter’s learning objectives.
LO 9-1 Understand the potential effects of using reported product costs for decision making. When
product costs are used for making decisions, the assumption about proportionality of the cost and
output can distort decisions.
LO 9-2 Explain how a two-stage product costing system works. A two-stage system first allocates costs
to departments or activities and then allocates costs from the departments or activities to the products
LO 9-3 Compare and contrast plantwide and department allocation methods. A single-stage cost
allocation system uses a single, plantwide, rate to allocate costs. A two-stage cost allocation system,
which allocates costs to departments in the first stage, allows managers to choose cost drivers that are
appropriate for each department, rather than having to select a single driver.
LO 9-4 Explain how activity-based costing and a two-stage product system are related. An activitybased cost system is a two-stage system in which the first stage assigns costs to activities.
LO 9-5 Compute product costs using activity-based costing. Product costs are computed by multiplying
the cost driver rate by the number of units of the cost driver in each product.
LO 9-6 Compare activity-based product costing to traditional department product costing methods.
Costs for low-volume products under activity-based costing are typically higher than under traditional
department costing systems.
LO 9-7 Demonstrate the flow of costs through accounts using activity-based costing. The flow of
activity-based costs through the ledger is the same as their flow using traditional methods except that
the accounts are based on activities, not departments.
LO 9-8 Apply activity-based costing to marketing and administrative services. ABC methods can be
used in service or administrative units of companies. Activities drive costs, regardless of industry or
functional area. ABC information can help decision makers manage these costs.
9-1.Give examples of cost drivers commonly used to allocate overhead costs to
products and services.
9-2.The product costs reported using either plantwide or department allocation are the
same. The only difference is in the number of cost drivers used. True or false? Explain.
9-3.Why do companies commonly use direct labor-hours or direct labor cost but not
the number of units to allocate overhead?
9-4.What are the costs of moving to an activity-based cost system? What are the
9-5.What are the basic steps in computing costs using activity-based costing?
9-6.Cost allocation allocates only a given amount of costs to products. The total
allocated is the same; therefore the choice of the system does not matter. True or
9-7.What type of organization is most likely to benefit from using activity-based costing
for product costing? Why?
9-8.In what ways is implementing an activity-based costing system in a manufacturing
firm’s personnel department the same as implementing it in the plant? In what ways is
Solutions to Review Questions
Common allocation bases are direct labor-hours, direct labor costs, and machine-hours.
Somewhat less common is direct material costs.
False. Department allocation is a two-stage process, so the first-stage assignment of
costs and the choice of cost drivers affects the allocation of costs to products. The total
product costs are the same under either approach, but the individual product costs
differ. This can affect the decisions managers make regarding individual products.
Most companies produce multiple products and simply adding them up does not
account for differences in complexity of the use of resources. As an extreme example,
suppose a company produced airplanes and staplers. Allocating overhead on the basis
of units would assign the same overhead cost to a stapler and a plane.
The costs include the systems and the software, but the most important cost is
managers’ time. Managers need to make many decisions about the activities and the
cost drivers and managers need to make many of the first-stage allocations. The
benefits come from having better information about the use of resources and better
information for decisions.
1. Identify activities that consume resources.
2. Identify the cost driver associated with each activity.
3. Compute a cost rate per activity unit (e.g., rate per setup, rate per part, rate per
4. Allocate costs to products by multiplying the activity rate times the volume of activity
consumed by the product.
False. While the total cost allocated is the same, the reported costs for individual
products will differ. Because managers make decisions at the product level, it is
important that the reported costs reflect, to the extent possible, the use of resources by
Activity-based costing will benefit most companies with high overhead costs and diverse
products and processes. If there is little overhead or if there is a single product, the
allocation process will not result in significantly different product costs. (Even if there are
only a few, relatively homogeneous products, activity-based costing may be useful for
cost management. See chapter 10 for a discussion.)
A personnel department provides its services by completing a set of activities using
resources. In this way, implementing activity-based costing in an administrative function
is the same as implementing it in a manufacturing firm. However, the products and
activities may be much harder to define, making it less like a manufacturing
Service Department and Joint Cost Allocation
Cost allocation is the process of assigning common costs to two or more cost objects. Ideally, cost
allocation reflects a cause-and-effect relation between costs and the objects to which they are allocated.
Service department cost allocations are required to ensure that the costs of support services are
included in the costs of products. The three major methods of service department cost allocation are the
direct method, the step method, and the reciprocal method. The methods differ by the extent to which
services provided by one service department to another are considered in the allocation process.
Joint cost allocations arise from the need to assign common costs to two or more products
manufactured from a common input. The usual objective of joint cost allocation is to relate the costs of the
inputs to the economic benefits received. There is no direct way to do this for joint products, so
approximations are necessary. The two methods of joint cost allocation distribute joint costs based on the
use of the net realizable value method (or estimated net realizable value) or the physical quantities
method. These methods are acceptable for financial reporting purposes, but care must be exercised
before attempting to use the data for decision-making purposes because of the inherent arbitrariness in
joint cost allocations.
The following summarizes key ideas tied to the chapter’s learning objectives.
LO 11-1 Explain why service costs are allocated. Costs are allocated to inform managers about
the costs of running departments that use the services of other departments. Cost allocations are
required for external financial reporting and tax purposes.
LO 11-2 Allocate service department costs using the direct method. The direct method allocates
service department costs to user departments and ignores any services used by other service
LO 11-3 Allocate service department costs using the step method. Based on an allocation order,
the step method allocates service department costs to other service departments and then to
production departments. Once an allocation is made from a service department, no further costs
are allocated back to that department.
LO 11-4 Allocate service department costs using the reciprocal method. The reciprocal method
allows for the simultaneous allocation of service department costs to and from all other service
LO 11-5 Use the reciprocal method for decisions. By applying the reciprocal methods to the
variable costs in the service departments, the resulting costs for these departments provide an
estimate of the total variable cost of each service department, accounting for the reciprocal use
of other service departments.
LO 11-6 Explain why joint costs are allocated. Joint costs are allocated to assign common costs
to two or more products manufactured from a common input. Companies allocate costs to
establish a cost basis for pricing or performance evaluation.
LO 11-7 Allocate joint costs using the net realizable value method. The net realizable value
method allocates joint costs to products in proportion to their relative sales values. If additional
processing is required beyond the split-off point before the product can be sold, an estimate of
the net realizable value can be derived at the split-off point by subtracting the additional
processing costs from the estimated sales value.
LO 11-8 Allocate joint costs using the physical quantities method. The physical quantities method
allocates joint costs to products in proportion to a physical measure (for example, volume or
LO 11-9 Explain how cost data are used in the sell-or-process-further decision. Management
must often decide whether to sell products at split-off points or process them further. Joint cost
allocations are usually irrelevant for these decisions.
LO 11-10 Account for by-products. By-products are relatively minor outputs from a joint
production process. The two methods most commonly used to account for by-products are (1) to
reduce the cost of the main product by the net realizable value (sales value minus by-product
processing cost) of the by-product or (2) to treat the net realizable value of the by-product as
LO 11-11 (Appendix) Use spreadsheets to solve reciprocal cost allocation problems.
Spreadsheets are used to solve complex reciprocal cost allocation problems by inverting the
service department usage matrix.
11-1.Why do companies allocate costs? What are some of the advantages and disadvantages to
11-2.What are the similarities and differences among the direct method, the step method, and the
reciprocal method of allocating costs?
11-3.What criterion should be used to determine the order of allocation from service departments
when the step method is used? Explain why.
11-4.What is the objective of joint cost allocation?
11-5.Why would a number of accountants express a preference for the net realizable value
method of joint cost allocation over the physical quantities method?
11-6.When would a physical quantities method for allocation be preferred?
11-7.What is the basic difference between the allocation of joint costs to (a) joint products and (b)
11-8.What costs are irrelevant for the decision of whether to sell a joint product or process