Question 1

In activity-based costing,how are cost drivers selected?

Accepted Answer

Cost drivers are selected based on their

Question 2

For a company that manufactures candy,how would the cost of sugar be classified?

Accepted Answer

A)  Yes No 
B)  No Yes 
C)  Yes Yes 
D)  No No 
A)  Yes No 
B)  No Yes 
C)  Yes Yes 
D)  No No

Question 3

Ada National Bank Ada National Bank had the following activities,traceable costs,and
Physical flow of driver units:
  The above activities are used by the Broken Arrow branch and the Choctaw branch:
  Refer to Ada National Bank.What is the cost per driver unit for the loan application activity?

Accepted Answer

A) $0.09 
B) $0.075 
C) $30.00 
D) $50.00 
A) $0.09 
B) $0.075 
C) $30.00 
D) $50.00

Question 4

Ada National Bank Ada National Bank had the following activities,traceable costs,and
Physical flow of driver units:
  The above activities are used by the Broken Arrow branch and the Choctaw branch:
  Refer to Ada National Bank.What is the cost per driver unit for new account activity?

Accepted Answer

A) $0.09 
B) $0.075 
C) $30.00 
D) $50.00 
A) $0.09 
B) $0.075 
C) $30.00 
D) $50.00

Question 5

Office Innovations Corporation produces two types of electronic data organizers: basic and deluxe.The following information about the production process is available:
   Total factory overhead is $10,000,000.Of this overhead,$4,000,000 is related to utilities and the remainder is related to quality control.
a.Determine the total overhead cost assigned to each type of data organizer using machine hours as the allocation base.Calculate the gross profit per unit for each product.
b.Determine the total overhead cost assigned to each type of data organizer if overhead is assigned using allocation bases appropriate to the overhead costs.Calculate the gross profit per unit of each product.
c.Explain why the unit cost for each model is different between the two methods of allocation.

Accepted Answer

@#IMG-DLM& c)When machine hours are used to alloca

Question 6

When non-value added time is greater,manufacturing cycle efficiency is higher.

Accepted Answer

A) True 
 B)False

Question 7

Seattle Grace Corporation manufactures two models of a medical device: Model 101 and Model 102.
Below is the current year production data for the company:
   The 210,000 units of material had a total cost of $1,365,000.Direct labor is $17 per hour.
The company has total overhead production costs of $1,850,000.
a.If Seattle Grace Corporation applies factory overhead using direct labor hours,compute the total production cost and the unit cost for each model
b.If Seattle Grace Corporation applies factory overhead using machine hours,compute the total production cost and the unit cost for each model.
c.Assume that Seattle Grace Corporation has established the following activity centers,costs drivers,and costs to apply factory overhead.
   Compute the total cost and the unit cost for each model.
d.Explain why the unit cost for each model is different across the three methods of overhead application.How can such information benefit an organization?

Accepted Answer

@#IMG-DLM& d.The allocation of overhead using volu

Question 8

Activity-based costing and generally accepted accounting principles differ in that ABC

Accepted Answer

A) does not define product costs in the same manner as GAAP. 
B) cannot be used to compute an income statement,but GAAP can. 
C) is concerned only with costs generated from automated processes,but GAAP is concerned with costs generated from both manual and automated processes. 
D) information is useful only to managers,while GAAP information is useful to all organizational stakeholders. 
A) does not define product costs in the same manner as GAAP. 
B) cannot be used to compute an income statement,but GAAP can. 
C) is concerned only with costs generated from automated processes,but GAAP is concerned with costs generated from both manual and automated processes. 
D) information is useful only to managers,while GAAP information is useful to all organizational stakeholders.

Question 9

For one product that a firm produces,the manufacturing cycle efficiency is 25 percent.If the total production time is 10 hours,what is the total manufacturing time?

Accepted Answer

A) 2.5 hours 
B) 8.0 hours 
C) 10.0 hours 
D) 40.0 hours 
A) 2.5 hours 
B) 8.0 hours 
C) 10.0 hours 
D) 40.0 hours

Question 10

Levine Company Levine Company produces two products: A and BThe company has three overhead functions that are required for both products.
Below is production information for Products A and B:
  The company produces 800 units of Product A and 8,000 units of Product B each period.
The overhead functions have the following hourly costs:
  Refer to Levine Company If total overhead is assigned to A and B on the basis of direct labor hours,Product A will have an overhead cost per unit of

Accepted Answer

A) $51.32 
B) $205.26 
C) $461.88 
D) None of the responses are correct. 
A) $51.32 
B) $205.26 
C) $461.88 
D) None of the responses are correct.

Question 11

For one product that a firm produces,the manufacturing cycle efficiency is 20 percent.If the total production time is 12 hours,what is the total manufacturing time?

Accepted Answer

A) 15.0 hours 
B) 60.0 hours 
C) 12.0 hours 
D) 2.4 hours 
A) 15.0 hours 
B) 60.0 hours 
C) 12.0 hours 
D) 2.4 hours

Question 12

In allocating fixed costs to products in activity-based costing,

Accepted Answer

A) direct labor hours should always be used as the allocation base. 
B) a company should use the same allocation base that it uses for variable costs. 
C) a cost driver that is not volume-related should be used. 
D) machine hours should always be used. 
A) direct labor hours should always be used as the allocation base. 
B) a company should use the same allocation base that it uses for variable costs. 
C) a cost driver that is not volume-related should be used. 
D) machine hours should always be used.

Question 13

Today,traditional accounting methods are

Accepted Answer

A) still appropriate for financial reporting. 
B) still appropriate for providing useful cost information to internal managers. 
C) still appropriate for both internal and external financial reporting. 
D) outdated for all purposes. 
A) still appropriate for financial reporting. 
B) still appropriate for providing useful cost information to internal managers. 
C) still appropriate for both internal and external financial reporting. 
D) outdated for all purposes.

Question 14

An activity that does not increase the value of a product for a customer is referred to as a _________________________ activity.

Accepted Answer

The answer of An activity that does not increase the...

Question 15

When a firm redesigns a product to reduce the number of component parts,the firm is

Accepted Answer

A) increasing consumer value. 
B) increasing the value added to the product. 
C) decreasing product variety. 
D) decreasing non-value-added costs. 
A) increasing consumer value. 
B) increasing the value added to the product. 
C) decreasing product variety. 
D) decreasing non-value-added costs.

Question 16

In the pharmaceutical or food industries,quality control inspections would most likely be viewed as

Accepted Answer

A) non-value-added activities. 
B) business-value-added activities. 
C) value-added-activities. 
D) process-efficiency activities. 
A) non-value-added activities. 
B) business-value-added activities. 
C) value-added-activities. 
D) process-efficiency activities.

Question 17

Building depreciation is generally considered an organizational or facility cost.

Accepted Answer

A) True 
 B)False

Question 18

Business value-added activities increase the value of a product without increasing production time.

Accepted Answer

A) True 
 B)False

Question 19

Mass customization can be achieved through the use of

Accepted Answer

A) activity-based costing. 
B) just-in-time inventory. 
C) flexible manufacturing systems. 
D) all of the above. 
A) activity-based costing. 
B) just-in-time inventory. 
C) flexible manufacturing systems. 
D) all of the above.

Question 20

Relative to traditional product costing,activity-based costing differs in the way costs are

Accepted Answer

A) processed. 
B) allocated. 
C) benchmarked. 
D) incurred. 
A) processed. 
B) allocated. 
C) benchmarked. 
D) incurred.

In activity-based costing,how are cost drivers selected?

For a company that manufactures candy,how would the cost of sugar be classified?

Ada National Bank Ada National Bank had the following activities,traceable costs,and Physical flow of driver units: The above activities are used by the Broken Arrow branch and the Choctaw branch: Refer to Ada National Bank.What is the cost per driver unit for the loan application activity?

Ada National Bank Ada National Bank had the following activities,traceable costs,and Physical flow of driver units: The above activities are used by the Broken Arrow branch and the Choctaw branch: Refer to Ada National Bank.What is the cost per driver unit for new account activity?

When non-value added time is greater,manufacturing cycle efficiency is higher.

Activity-based costing and generally accepted accounting principles differ in that ABC

For one product that a firm produces,the manufacturing cycle efficiency is 25 percent.If the total production time is 10 hours,what is the total manufacturing time?

For one product that a firm produces,the manufacturing cycle efficiency is 20 percent.If the total production time is 12 hours,what is the total manufacturing time?

In allocating fixed costs to products in activity-based costing,

Today,traditional accounting methods are

An activity that does not increase the value of a product for a customer is referred to as a _________________________ activity.

When a firm redesigns a product to reduce the number of component parts,the firm is

In the pharmaceutical or food industries,quality control inspections would most likely be viewed as

Building depreciation is generally considered an organizational or facility cost.

Business value-added activities increase the value of a product without increasing production time.

Mass customization can be achieved through the use of

Relative to traditional product costing,activity-based costing differs in the way costs are

Introduction to Cost Accounting

Cost Terminology and Cost Behaviors

Predetermined Overhead Rates, flexible Budgets, and Absorptionvariable Costing

Job Order Costing

Process Costing

Standard Costing and Variance Analysis

The Master Budget

Break-Even Point and Cost-Volume-Profit Analysis

Relevant Information for Decision Making

Allocation of Joint Costs and Accounting for By-Products

Introduction to Cost Management Systems

Responsibility Accounting, support Department Allocations, and Transfer Pricing

Performance Measurement, balanced Scorecards, and Performance Rewards

Capital Budgeting

Managing Costs and Uncertainty

Implementing Quality Concepts

Inventory and Production Management

Emerging Management Practices

Filters

Exam 4: Activity-Based Management and Activity-Based Costing

In activity-based costing,how are cost drivers selected?

For a company that manufactures candy,how would the cost of sugar be classified?

Ada National Bank Ada National Bank had the following activities,traceable costs,and Physical flow of driver units: The above activities are used by the Broken Arrow branch and the Choctaw branch: Refer to Ada National Bank.What is the cost per driver unit for the loan application activity?

Ada National Bank Ada National Bank had the following activities,traceable costs,and Physical flow of driver units: The above activities are used by the Broken Arrow branch and the Choctaw branch: Refer to Ada National Bank.What is the cost per driver unit for new account activity?

When non-value added time is greater,manufacturing cycle efficiency is higher.

Activity-based costing and generally accepted accounting principles differ in that ABC

For one product that a firm produces,the manufacturing cycle efficiency is 25 percent.If the total production time is 10 hours,what is the total manufacturing time?

For one product that a firm produces,the manufacturing cycle efficiency is 20 percent.If the total production time is 12 hours,what is the total manufacturing time?

In allocating fixed costs to products in activity-based costing,

Today,traditional accounting methods are

An activity that does not increase the value of a product for a customer is referred to as a _________________________ activity.

When a firm redesigns a product to reduce the number of component parts,the firm is

In the pharmaceutical or food industries,quality control inspections would most likely be viewed as

Building depreciation is generally considered an organizational or facility cost.

Business value-added activities increase the value of a product without increasing production time.

Mass customization can be achieved through the use of

Relative to traditional product costing,activity-based costing differs in the way costs are

Introduction to Cost Accounting

Cost Terminology and Cost Behaviors

Predetermined Overhead Rates, flexible Budgets, and Absorptionvariable Costing

Job Order Costing

Process Costing

Standard Costing and Variance Analysis

The Master Budget

Break-Even Point and Cost-Volume-Profit Analysis

Relevant Information for Decision Making

Allocation of Joint Costs and Accounting for By-Products

Introduction to Cost Management Systems

Responsibility Accounting, support Department Allocations, and Transfer Pricing

Performance Measurement, balanced Scorecards, and Performance Rewards

Capital Budgeting

Managing Costs and Uncertainty

Implementing Quality Concepts

Inventory and Production Management

Emerging Management Practices

Filters