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

Video Corporation Video Corporation has two product lines: LCD televisions and projection televisions. The company has budgeted the following production and overhead costs for the upcoming year: Refer to Video Corporation. If the company uses number of units produced to allocate factory overhead, the machine maintenance cost allocated to LCD TVs would be:

What are the three classes of activities defined by activity-based management. What is customer response to each of these activities? What is management's reaction to each of these activities?

The proportion of value added processing time to total cycle time equals __________________________________________________. or

Today, traditional accounting methods are

Video Corporation Video Corporation has two product lines: LCD televisions and projection televisions. The company has budgeted the following production and overhead costs for the upcoming year: Refer to Video Corporation. If the company uses number of units produced to allocate factory overhead, the materials handing cost allocated to LCD TVs would be:

In allocating variable costs to products,

Simultaneous engineering can be used to

Levine Company Levine Company produces two products: A and B. The 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 B will have an overhead cost per unit of

_________________________ refers to the number of products made.

If activity-based costing is implemented in an organization without any other changes being implemented, total overhead manufacturing costs will

Moreno Company makes ten different styles of inexpensive feather masks. Which of the following is this company most likely to have?

Executive Images Corporation produces two types of wooden bookends: plain and hand-carved. The following information about the production process is available: Total factory overhead is $1,200,000. Of this overhead, $500,000 is related to utilities and the remainder is related to quality control. a. Determine the total overhead cost assigned to each type of bookend 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 bookend 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.

Which of the following is most likely to make the implementation of ABC/ABM slow and difficult?

A company should strive to reduce all non-value added activities to a minimum.

Batch level costs occur once for each unit produced.

Stone Company Stone Company produces 50,000 units of Product Q and 6,000 units of Product Z during a period. In that period, four set-ups were required for color changes. All units of Product Q are black, which is the color in the process at the beginning of the period. A set-up was made for 1,000 blue units of Product Z; a set-up was made for 4,500 red units of Product Z; a set-up was made for 500 green units of Product Z. A set-up was then made to return the process to its standard black coloration and the units of Product Q were run. Each set-up costs $500. Refer to Stone Company. If set-up cost is assigned on a volume basis for the department, what is the approximate per-unit set-up cost for the red units of Product Z?

Which of the following is/are part of activity-based management?

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

Building depreciation is generally considered an organizational or facility cost.

An activity that a customer is willing to pay for and increases the worth of a product is referred to as a _________________________ activity.