Question 1

The term(s )which refer(s) to a global incentive that encourages employees to contribute to the overall financial well-being is(are) called

Accepted Answer

A) Bonuses 
B) Demotion 
C) Profit sharing 
D) Gain sharing 
A) Bonuses 
B) Demotion 
C) Profit sharing 
D) Gain sharing

Question 2

Which of the following is NOT a necessary essential element of activity-based responsibility accounting?

Accepted Answer

A) Process management requires significant group activity. 
B) Performance evaluation employs dynamic standards. 
C) Performance evaluation uses only financial measures. 
D) Performance evaluation is based on optimal standards. 
A) Process management requires significant group activity. 
B) Performance evaluation employs dynamic standards. 
C) Performance evaluation uses only financial measures. 
D) Performance evaluation is based on optimal standards.

Question 3

Process value consists of three elements: .driver analysis, activity analysis, and performance measurement.

Accepted Answer

A) True 
 B)False

Question 4

A firm's warranty costs are $375,000 per year. A competitor's warranty costs are $175,000 per year. The non-value-added costs are

Accepted Answer

A) $0. 
B) $375,000. 
C) $200,000. 
D) $75,000. 
A) $0. 
B) $375,000. 
C) $200,000. 
D) $75,000.

Question 5

When different units that perform the same types of activities within the same organization are compared to the unit with the best performance, this practice is called

Accepted Answer

A) variance benchmarking. 
B) competitive benchmarking. 
C) external benchmarking. 
D) internal benchmarking. 
A) variance benchmarking. 
B) competitive benchmarking. 
C) external benchmarking. 
D) internal benchmarking.

Question 6

Under what conditions would the activity capacity used be zero?

Accepted Answer

A) If the activity is value-added. 
B) If the activity is non-value-added. 
C) If the activity is discretionary. 
D) It would never be set at zero. 
A) If the activity is value-added. 
B) If the activity is non-value-added. 
C) If the activity is discretionary. 
D) It would never be set at zero.

Question 7

Peridot Company has developed ideal standards for four activities: labor, materials, inspection, and receiving.
Information is as follows:
$\begin{array}{llrrr}&&\text { Standard}&\text {Actual }&\text { Standard}\
\text { Activity } & \text { Activity Driver } & \text { Quantity } & \text { Quantity } & \text { Frice } \
\text { Inspection } & \text { Inspection hours } & & 20,000 & \$ 8 \
\text { Labor } & \text { Hours } & 20,000 & 25,000 & 6 \
\text { Materials } & \text { Pounds } & 90,000 & 120,000 & 5 \
\text { Receiving } & \text { Orders } & 200 & 250 & 210
\end{array}$
Compute the value-added costs for materials.

Accepted Answer

A) $450,000 
B) $150,000 
C) $400,000 
D) $200,000 
A) $450,000 
B) $150,000 
C) $400,000 
D) $200,000

Question 8

A company has 5 days of finished goods inventory on hand to avoid stockouts. The carrying costs of the inventory average $2,500 per day. The non-value-added costs are

Accepted Answer

A) $-0-. 
B) 500. 
C) $2,500. 
D) $12,500. 
A) $-0-. 
B) 500. 
C) $2,500. 
D) $12,500.

Question 9

Salvador Company has developed capacity standards. Information is as follows for a value-added activity: $$\begin{array} { l r } 
\text { Activity capacity acquired } & 60 \
\text { Activity capacity used } & 50 \
\text { Actual activity usage } & 30 \
\text { Standard fixed activity rate } & \$ 2,000
\end{array}$$ The unused capacity variance is

Accepted Answer

A) There is no variance. 
B) $60,000 favorable. 
C) $40,000 favorable. 
D) $20,000 favorable. 
A) There is no variance. 
B) $60,000 favorable. 
C) $40,000 favorable. 
D) $20,000 favorable.

Question 10

The process that focuses on non-value-added activities is called:

Accepted Answer

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

Question 11

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 $4 per pound. The non-value-added costs are

Accepted Answer

A) $8. 
B) $4. 
C) $64. 
D) $72. 
A) $8. 
B) $4. 
C) $64. 
D) $72.

Question 12

Activity flexible budgeting differs from traditional approaches by using more than __________ drivers to predict costs.

Accepted Answer

The answer of Activity flexible budgeting differs from traditional approaches...

Question 13

Performance measurement is concerned with how well activities are performed.

Accepted Answer

A) True 
 B)False

Question 14

A firm's warranty costs are $375,000 per year. A competitor's warranty costs are $175,000 per year. The value-added costs are

Accepted Answer

A) $225,000. 
B) $75,000. 
C) $150,000. 
D) $0. 
A) $225,000. 
B) $75,000. 
C) $150,000. 
D) $0.

Question 15

Mendelsohn company keeps 20 days of materials inventory on hand to avoid shutdowns due to materials shortages. Carrying costs average $4,000 per day. Bach, Inc., a competitor, keeps 10 days of inventory on hand, and the competitor's carrying costs average $2,000 per day.
The non-value-added costs for the company are

Accepted Answer

A) $-0-. 
B) $40,000. 
C) $20,000. 
D) $80,000. 
A) $-0-. 
B) $40,000. 
C) $20,000. 
D) $80,000.

Question 16

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 value-added costs would be

Accepted Answer

A) $100,000. 
B) $-0-. 
C) $5,000. 
D) $10,000. 
A) $100,000. 
B) $-0-. 
C) $5,000. 
D) $10,000.

Question 17

An objective of activity-based management is:

Accepted Answer

A) to encourage top-level management to manufacture low-quality products. 
B) to encourage cost reduction through continuous improvement techniques. 
C) to increase the number of activities necessary to perform processes. 
D) to increase the costs incurred in manufacturing a competitive product. 
A) to encourage top-level management to manufacture low-quality products. 
B) to encourage cost reduction through continuous improvement techniques. 
C) to increase the number of activities necessary to perform processes. 
D) to increase the costs incurred in manufacturing a competitive product.

Question 18

Which of the following is true of value-added activities?

Accepted Answer

A) They include activities such as inspection of finished goods. 
B) They are activities that are necessary to remain in business. 
C) They are synonymous with the state-detection activities. 
D) They are the activities that replicate work because it wasn't done correctly the first time. 
A) They include activities such as inspection of finished goods. 
B) They are activities that are necessary to remain in business. 
C) They are synonymous with the state-detection activities. 
D) They are the activities that replicate work because it wasn't done correctly the first time.

Question 19

A firm's warranty costs are $125,000 per year. A competitor's warranty costs are $25,000 per year. The value-added costs are

Accepted Answer

A) $125,000. 
B) $100,000. 
C) $25,000. 
D) $-0-. 
A) $125,000. 
B) $100,000. 
C) $25,000. 
D) $-0-.

Question 20

Which of the following is NOT true about assigning rewards in activity-based responsibility accounting?

Accepted Answer

A) Rewards are assigned based on budgetary standards. 
B) Rewards are assigned based on individual as well as team performance. 
C) Rewards are assigned based on progress towards optimal standards. 
D) Rewards include bonuses, profit sharing, and gainsharing. 
A) Rewards are assigned based on budgetary standards. 
B) Rewards are assigned based on individual as well as team performance. 
C) Rewards are assigned based on progress towards optimal standards. 
D) Rewards include bonuses, profit sharing, and gainsharing.

The term(s )which refer(s) to a global incentive that encourages employees to contribute to the overall financial well-being is(are) called

Which of the following is NOT a necessary essential element of activity-based responsibility accounting?

Process value consists of three elements: .driver analysis, activity analysis, and performance measurement.

A firm's warranty costs are $375,000 per year. A competitor's warranty costs are $175,000 per year. The non-value-added costs are

When different units that perform the same types of activities within the same organization are compared to the unit with the best performance, this practice is called

Under what conditions would the activity capacity used be zero?

A company has 5 days of finished goods inventory on hand to avoid stockouts. The carrying costs of the inventory average $2,500 per day. The non-value-added costs are

Salvador Company has developed capacity standards. Information is as follows for a value-added activity: Activity capacity acquired 60 Activity capacity used 50 Actual activity usage 30 Standard fixed activity rate \ 2,000 The unused capacity variance is

The process that focuses on non-value-added activities is called:

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 $4 per pound. The non-value-added costs are

Activity flexible budgeting differs from traditional approaches by using more than __________ drivers to predict costs.

Performance measurement is concerned with how well activities are performed.

A firm's warranty costs are $375,000 per year. A competitor's warranty costs are $175,000 per year. The value-added costs are

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 value-added costs would be

An objective of activity-based management is:

Which of the following is true of value-added activities?

A firm's warranty costs are $125,000 per year. A competitor's warranty costs are $25,000 per year. The value-added costs are

Which of the following is NOT true about assigning rewards in activity-based responsibility accounting?

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 term(s )which refer(s) to a global incentive that encourages employees to contribute to the overall financial well-being is(are) called

Which of the following is NOT a necessary essential element of activity-based responsibility accounting?

Process value consists of three elements: .driver analysis, activity analysis, and performance measurement.

A firm's warranty costs are $375,000 per year. A competitor's warranty costs are $175,000 per year. The non-value-added costs are

When different units that perform the same types of activities within the same organization are compared to the unit with the best performance, this practice is called

Under what conditions would the activity capacity used be zero?

A company has 5 days of finished goods inventory on hand to avoid stockouts. The carrying costs of the inventory average $2,500 per day. The non-value-added costs are

Salvador Company has developed capacity standards. Information is as follows for a value-added activity: Activity capacity acquired 60 Activity capacity used 50 Actual activity usage 30 Standard fixed activity rate \ 2,000 The unused capacity variance is

The process that focuses on non-value-added activities is called:

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 $4 per pound. The non-value-added costs are

Activity flexible budgeting differs from traditional approaches by using more than __________ drivers to predict costs.

Performance measurement is concerned with how well activities are performed.

A firm's warranty costs are $375,000 per year. A competitor's warranty costs are $175,000 per year. The value-added costs are

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 value-added costs would be

An objective of activity-based management is:

Which of the following is true of value-added activities?

A firm's warranty costs are $125,000 per year. A competitor's warranty costs are $25,000 per year. The value-added costs are

Which of the following is NOT true about assigning rewards in activity-based responsibility accounting?

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