Question 1

The effort expended to identify those factors that are the root causes of activity costs is(are) called:

Accepted Answer

A) Driver analysis 
B) Activity outputs 
C) Activity inputs 
D) Value-added activities 
A) Driver analysis 
B) Activity outputs 
C) Activity inputs 
D) Value-added activities

Question 2

Value-added costs are standard costs based on

Accepted Answer

A) currently attainable standards. 
B) ideal usage standards. 
C) cycle time. 
D) the value added. 
A) currently attainable standards. 
B) ideal usage standards. 
C) cycle time. 
D) the value added.

Question 3

An example of activity reduction would be

Accepted Answer

A) improving cycle time so the need for expediting is eliminated. 
B) redesigning products to lead to a reduced cost set of activities. 
C) designing a new product that uses components already used by another product. 
D) reducing demand for customer complaint handling by improving product quality. 
A) improving cycle time so the need for expediting is eliminated. 
B) redesigning products to lead to a reduced cost set of activities. 
C) designing a new product that uses components already used by another product. 
D) reducing demand for customer complaint handling by improving product quality.

Question 4

_____ are an example of activity-based performance measures.

Accepted Answer

A) Organizational unit budgets 
B) Process-oriented standards 
C) Static standards 
D) Currently attainable standards 
A) Organizational unit budgets 
B) Process-oriented standards 
C) Static standards 
D) Currently attainable standards

Question 5

The responsibility accounting system that uses both operational and financial measures is called __________ responsibility.

Accepted Answer

The answer of The responsibility accounting system that uses both...

Question 6

The results or products of an activity are called:

Accepted Answer

A) Activity inputs 
B) Driver analysis 
C) Activity outputs 
D) Value-added activities 
A) Activity inputs 
B) Driver analysis 
C) Activity outputs 
D) Value-added activities

Question 7

Which of the following is true of the process dimension of an activity-based management (ABM) model?

Accepted Answer

A) The process dimension aims at improving the accuracy of cost assignments. 
B) The process dimension provides the ability to engage in and measure continuous improvement. 
C) The process dimension provides cost information about resources, activities, and cost objects of interest. 
D) The process dimension is not concerned with the issue or presence of waste in activities. 
A) The process dimension aims at improving the accuracy of cost assignments. 
B) The process dimension provides the ability to engage in and measure continuous improvement. 
C) The process dimension provides cost information about resources, activities, and cost objects of interest. 
D) The process dimension is not concerned with the issue or presence of waste in activities.

Question 8

The process which increases the efficiency of necessary activities by using economies of scale is called:

Accepted Answer

A) Activity elimination 
B) Activity sharing 
C) Activity selection 
D) Activity reduction 
A) Activity elimination 
B) Activity sharing 
C) Activity selection 
D) Activity reduction

Question 9

The responsibility accounting system that focuses on organizational units such as departments and plants is called __________ responsibility.

Accepted Answer

The answer of The responsibility accounting system that focuses on...

Question 10

A company has 19 days of finished goods inventory on hand to avoid stockouts. The carrying costs of the inventory average $6,000 per day.
The non-value-added costs are

Accepted Answer

A) $250. 
B) $10,000. 
C) $5,000. 
D) $114,000. 
A) $250. 
B) $10,000. 
C) $5,000. 
D) $114,000.

Question 11

The effort to reduce costs of existing products and processes is named:

Accepted Answer

A) Activity reduction 
B) Activity elimination 
C) Activity selection 
D) Kaizen costing 
A) Activity reduction 
B) Activity elimination 
C) Activity selection 
D) Kaizen costing

Question 12

Which of the following is true of activity selection in an activity-based management system?

Accepted Answer

A) It is a process that focuses on eliminating the non-value-added activities performed within an organization. 
B) It is a process that involves choosing among various sets of activities that are caused by competing strategies. 
C) It is a process that decreases the time and resources required by a set of activities to achieve an organizational goal. 
D) It is a process that increases the efficiency of necessary activities using economies of scale. 
A) It is a process that focuses on eliminating the non-value-added activities performed within an organization. 
B) It is a process that involves choosing among various sets of activities that are caused by competing strategies. 
C) It is a process that decreases the time and resources required by a set of activities to achieve an organizational goal. 
D) It is a process that increases the efficiency of necessary activities using economies of scale.

Question 13

Activity-based management can be viewed as an information system with broad objectives. Which of the following is NOT on of the broad objectives of ABM?

Accepted Answer

A) Support continuous improvement through cost reduction. 
B) Increase the non-value-added costs through increased collection of more accurate cost accounting information. 
C) Improve decision making through more accurate cost data. 
D) All of these are broad objectives of ABM. 
A) Support continuous improvement through cost reduction. 
B) Increase the non-value-added costs through increased collection of more accurate cost accounting information. 
C) Improve decision making through more accurate cost data. 
D) All of these are broad objectives of ABM.

Question 14

Mattison Company has developed cost formulas for the drivers of the following production activities: $$\begin{array} { l l r } 
 { \text { Driver } } & \text { Activity } & \text { Fixed }& \text { Variable } \
\hline \text { Labor hours } & \text { Materials } & \$ 0&\$20\
\text { Labor hours } & \text { Labor } & 0 &10\
\text { Machine hours } & \text { Maintenance } & 10,000&8 \
\text { Machine hours } & \text { Machining } & 50,000&2 \
\text { Number of setups } & \text { Inspections } & 30,000&200 \
\text { Number of setups } & \text { Setups } & 0 &300\
\text { Number of purchase orders } & \text { Purchasing } & 75,000&3
\end{array}$$ If the actual activity was 20 setups and the actual fixed cost for inspections was $28,000 and the variable cost for inspections was $5,000, the total variance for inspections is due to

Accepted Answer

A) unfavorable variance on fixed costs. 
B) favorable variance on fixed costs. 
C) favorable variance on variable costs. 
D) unfavorable variance on variable costs. 
A) unfavorable variance on fixed costs. 
B) favorable variance on fixed costs. 
C) favorable variance on variable costs. 
D) unfavorable variance on variable costs.

Question 15

Mattison Company has developed cost formulas for the drivers of the following production activities: $$\begin{array} { l l r } 
 { \text { Driver } } & \text { Activity } & \text { Fixed }& \text { Variable } \
\hline \text { Labor hours } & \text { Materials } & \$ 0&\$20\
\text { Labor hours } & \text { Labor } & 0 &10\
\text { Machine hours } & \text { Maintenance } & 10,000&8 \
\text { Machine hours } & \text { Machining } & 50,000&2 \
\text { Number of setups } & \text { Inspections } & 30,000&200 \
\text { Number of setups } & \text { Setups } & 0 &300\
\text { Number of purchase orders } & \text { Purchasing } & 75,000&3
\end{array}$$ If the actual activity was 20 setups and the actual fixed cost for inspections was $28,000 and the variable cost for inspections was $5,000, the total variance for inspections is

Accepted Answer

A) $1,000 favorable. 
B) $2,000 favorable. 
C) $1,000 unfavorable. 
D) $2,000 unfavorable. 
A) $1,000 favorable. 
B) $2,000 favorable. 
C) $1,000 unfavorable. 
D) $2,000 unfavorable.

Question 16

Each unit of product requires 16 pounds of material. Due to scrap and rework, each unit has been averaging 18 pounds of material. The material costs $6 per pound.
If the company wants to reduce non-value-added costs by 25 percent next year, the currently attainable standard for material would be

Accepted Answer

A) 16.00 pounds. 
B) 17.50 pounds. 
C) 16.80 pounds. 
D) 18.00 pounds. 
A) 16.00 pounds. 
B) 17.50 pounds. 
C) 16.80 pounds. 
D) 18.00 pounds.

Question 17

What is responsibility accounting? Compare and contrast financial-based responsibility accounting with activity-based responsibility accounting.

Accepted Answer

Responsibility accounting is a fundament

Question 18

Which of the following is NOT part of the two-dimensional activity-based management model?

Accepted Answer

A) personnel selection 
B) driver analysis 
C) resources 
D) performance measures 
A) personnel selection 
B) driver analysis 
C) resources 
D) performance measures

Question 19

Which of the following is NOT part of the process dimension of the activity-based management model?

Accepted Answer

A) resources 
B) driver analysis 
C) activities 
D) performance measures 
A) resources 
B) driver analysis 
C) activities 
D) performance measures

Question 20

Alpha, Inc., manufactures Product A. The setup time for each unit of Product A is 8 hours. Gamma, Inc., that uses the just-in-time system and produces the same product has reduced setup time by 1 hour. Setup labor is $35 per hour. If Alpha wants to reduce non-value-added costs by 30 percent next year, compute the currently attainable standard for setup time. (Round answer to one decimal place.)

Accepted Answer

A) 4.5 hours 
B) 7.3 hours 
C) 6.2 hours 
D) 5.9 hours 
A) 4.5 hours 
B) 7.3 hours 
C) 6.2 hours 
D) 5.9 hours

The effort expended to identify those factors that are the root causes of activity costs is(are) called:

Value-added costs are standard costs based on

An example of activity reduction would be

_____ are an example of activity-based performance measures.

The responsibility accounting system that uses both operational and financial measures is called __________ responsibility.

The results or products of an activity are called:

Which of the following is true of the process dimension of an activity-based management (ABM) model?

The process which increases the efficiency of necessary activities by using economies of scale is called:

The responsibility accounting system that focuses on organizational units such as departments and plants is called __________ responsibility.

A company has 19 days of finished goods inventory on hand to avoid stockouts. The carrying costs of the inventory average $6,000 per day. The non-value-added costs are

The effort to reduce costs of existing products and processes is named:

Which of the following is true of activity selection in an activity-based management system?

Activity-based management can be viewed as an information system with broad objectives. Which of the following is NOT on of the broad objectives of ABM?

Each unit of product requires 16 pounds of material. Due to scrap and rework, each unit has been averaging 18 pounds of material. The material costs $6 per pound. If the company wants to reduce non-value-added costs by 25 percent next year, the currently attainable standard for material would be

What is responsibility accounting? Compare and contrast financial-based responsibility accounting with activity-based responsibility accounting.

Which of the following is NOT part of the two-dimensional activity-based management model?

Which of the following is NOT part of the process dimension of the activity-based management model?

Introduction to Cost Management

Basic Cost Management Concepts

Cost Behavior

Activity-Based Costing

Product and Service Costing: Job-Order System

Process Costing

Allocating Costs of Support Departments and Joint Products

Budgeting for Planning and Control

Standard Costing: a Functional-Based Control Approach

Decentralization: Responsibility Accounting, Performance

Strategic Cost Management

The Balanced Scorecard: Strategic-Based Control

Quality and Environmental Cost Management

Lean Accounting and Productivity Measurement

Cost-Volume-Profit Analysis

Activity Resource Usage Model and Tactical Decision Making

Pricing and Profitability Analysis

Capital Investment

Inventory Management: Economic Order Quantity, Jit, and the Theory of Constraints

Filters

Exam 12: Activity-Based Management

The effort expended to identify those factors that are the root causes of activity costs is(are) called:

Value-added costs are standard costs based on

An example of activity reduction would be

_____ are an example of activity-based performance measures.

The responsibility accounting system that uses both operational and financial measures is called __________ responsibility.

The results or products of an activity are called:

Which of the following is true of the process dimension of an activity-based management (ABM) model?

The process which increases the efficiency of necessary activities by using economies of scale is called:

The responsibility accounting system that focuses on organizational units such as departments and plants is called __________ responsibility.

A company has 19 days of finished goods inventory on hand to avoid stockouts. The carrying costs of the inventory average $6,000 per day. The non-value-added costs are

The effort to reduce costs of existing products and processes is named:

Which of the following is true of activity selection in an activity-based management system?

Activity-based management can be viewed as an information system with broad objectives. Which of the following is NOT on of the broad objectives of ABM?

Each unit of product requires 16 pounds of material. Due to scrap and rework, each unit has been averaging 18 pounds of material. The material costs $6 per pound. If the company wants to reduce non-value-added costs by 25 percent next year, the currently attainable standard for material would be

What is responsibility accounting? Compare and contrast financial-based responsibility accounting with activity-based responsibility accounting.

Which of the following is NOT part of the two-dimensional activity-based management model?

Which of the following is NOT part of the process dimension of the activity-based management model?

Introduction to Cost Management

Basic Cost Management Concepts

Cost Behavior

Activity-Based Costing

Product and Service Costing: Job-Order System

Process Costing

Allocating Costs of Support Departments and Joint Products

Budgeting for Planning and Control

Standard Costing: a Functional-Based Control Approach

Decentralization: Responsibility Accounting, Performance

Strategic Cost Management

The Balanced Scorecard: Strategic-Based Control

Quality and Environmental Cost Management

Lean Accounting and Productivity Measurement

Cost-Volume-Profit Analysis

Activity Resource Usage Model and Tactical Decision Making

Pricing and Profitability Analysis

Capital Investment

Inventory Management: Economic Order Quantity, Jit, and the Theory of Constraints

Filters