Question 1

The process that decreases the time and resources required by different activities is called:

Accepted Answer

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

Question 2

A financial-based responsibility accounting system focuses on the assignment of responsibility to organizational units and measures performance in financial terms.

Accepted Answer

A) True 
 B)False

Question 3

A time-and-motion study revealed that it should take 2 hours to produce a product that currently takes 6 hours to produce. Labor is $8 per hour.
The value-added costs are

Accepted Answer

A) $48. 
B) $32. 
C) $16. 
D) $-0-. 
A) $48. 
B) $32. 
C) $16. 
D) $-0-.

Question 4

Metropolitan, Inc., sells one of its products for $40 each. Sales volume averages 2,000 units per year. Recently, its main competitor reduced the price of its product to $28. Metropolitan expects sales to drop dramatically unless it matches the competitor's price. In addition, the current profit per unit must be maintained. Information about the product (for production of 2,000) is as follows:
 $\begin{array}{lrr}&SQ&AQ&\text { Actual Q}\
\text { Materials (pounds) } & 4,900 & 5,000&\$20, \
\text { Labor (hours) } & 1,200 & 1,250 &10,\
\text { Setups (hours) } & 0 & 200&6, \
\text { Material handling (moves) } & 0 & 350&2, \
\text { Warranties (number repaired) } & 0 & 250&10,
\end{array}$ 
Required: 
a.Calculate the target cost for maintaining current market share and profitability.
b.Calculate the non-value-added cost per unit.
c.If non-value-added costs can be reduced to zero, can the target cost be achieved?

Accepted Answer

The answer of Metropolitan, Inc., sells one of its products...

Question 5

Livingston Company has developed capacity standards. Information is as follows: $\begin{array}{lr}
\text { Standard cost of the activity capacity acquired } & \$ 250,000 \
\text { Standard cost of the activity capacity used } & 200,000 \
\text { Standard onst of the actial activity } & 220,000
\end{array}$
The unused capacity variance is

Accepted Answer

A) There is no variance. 
B) $20,000 favorable. 
C) $30,000 favorable. 
D) $50,000 favorable. 
A) There is no variance. 
B) $20,000 favorable. 
C) $30,000 favorable. 
D) $50,000 favorable.

Question 6

Bandolero Corporation has developed ideal standards for four activities: labor, materials, inspection, and receiving. Information is as follows: $$\begin{array} { l l r r r } 
\text { Activity } & \text { Activity Driver } & \text { SQ } &{ \text { AQ } } & \text { SP } \
\text { Inspection } & \text { Inspection hours } & 0 & 40,000 & \$ 12 \
\text { Labor } & \text { Hours } & 50,000 & 56,000 & 18 \
\text { Materials } & \text { Pounds } & 100,000 & 105,000 & 15 \
\text { Receiving } & \text { Orders } & 150 & 190&450
\end{array}$$ The actual prices paid per unit of each activity driver were equal to the standard prices. The non-value-added costs for materials are

Accepted Answer

A) $75,000. 
B) $157,500. 
C) $150,000. 
D) $1,575,000. 
A) $75,000. 
B) $157,500. 
C) $150,000. 
D) $1,575,000.

Question 7

Kaizen costing is concerned with reducing the costs by identifying small, continuous improvement for existing products and processes.

Accepted Answer

A) True 
 B)False

Question 8

A time-and-motion study revealed that it should take 3 hours to produce a product that currently takes 7 hours to produce. Labor is $9 per hour.
The non-value-added costs are

Accepted Answer

A) $56. 
B) $24. 
C) $36. 
D) $0. 
A) $56. 
B) $24. 
C) $36. 
D) $0.

Question 9

Describe how activity-based management and activity-based costing systems differ.

Accepted Answer

Activity-based management is a systemwid

Question 10

Which of the following is a reason for managerial activity to be considered a value-added activity?

Accepted Answer

A) It is an enabling resource for operational activities that bring about a change of state. 
B) Managing activities brings order by changing the state from uncoordinated activities to coordinated activities. 
C) Both are reasons for classifying managerial activities as value-added activity. 
D) Neither is a reason for classifying managerial activities as value-added activity. 
A) It is an enabling resource for operational activities that bring about a change of state. 
B) Managing activities brings order by changing the state from uncoordinated activities to coordinated activities. 
C) Both are reasons for classifying managerial activities as value-added activity. 
D) Neither is a reason for classifying managerial activities as value-added activity.

Question 11

Which of the following is part of the cost and process dimensions of the activity-based management model?

Accepted Answer

A) resources 
B) driver analysis 
C) activities 
D) cost objects 
A) resources 
B) driver analysis 
C) activities 
D) cost objects

Question 12

For non-value-added activities that are unnecessary, the standard quantity is

Accepted Answer

A) one. 
B) zero. 
C) actual quantity minus standard price. 
D) actual quantity plus standard price. 
A) one. 
B) zero. 
C) actual quantity minus standard price. 
D) actual quantity plus standard price.

Question 13

Driver analysis identifies performance levels.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is a reason for an activity-based management (ABM) system breakdown?

Accepted Answer

A) Lack of support from higher-level management 
B) Increase in costs of production due to implementation of the ABM model 
C) Inaccurate assignment of costs to cost objects due to implementation of the ABM model 
D) Ignorance of presence of waste in activities 
A) Lack of support from higher-level management 
B) Increase in costs of production due to implementation of the ABM model 
C) Inaccurate assignment of costs to cost objects due to implementation of the ABM model 
D) Ignorance of presence of waste in activities

Question 15

A company has 5 days of finished goods inventory on hand to avoid stockouts. The carrying costs of the inventory average $5,000 per day. The value-added costs are

Accepted Answer

A) $-0-. 
B) $1,000. 
C) $5,000. 
D) $25,000. 
A) $-0-. 
B) $1,000. 
C) $5,000. 
D) $25,000.

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 $4 per pound. The value-added costs are

Accepted Answer

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

Question 17

Activity-based costing is very concerned with waste issues.

Accepted Answer

A) True 
 B)False

Question 18

The capacity variance is composed of the unused capacity variance and

Accepted Answer

A) the activity volume variance. 
B) the used capacity variance. 
C) the activity benchmark. 
D) the value-added standard. 
A) the activity volume variance. 
B) the used capacity variance. 
C) the activity benchmark. 
D) the value-added standard.

Question 19

Activity-based costing does not provide good information for activity-based management.

Accepted Answer

A) True 
 B)False

Question 20

Activity-based management attempts to

Accepted Answer

A) identify and eliminate all unnecessary activities. 
B) increase the efficiency of necessary activities. 
C) add new activities that increase value. 
D) all of these. 
A) identify and eliminate all unnecessary activities. 
B) increase the efficiency of necessary activities. 
C) add new activities that increase value. 
D) all of these.

The process that decreases the time and resources required by different activities is called:

A financial-based responsibility accounting system focuses on the assignment of responsibility to organizational units and measures performance in financial terms.

A time-and-motion study revealed that it should take 2 hours to produce a product that currently takes 6 hours to produce. Labor is $8 per hour. The value-added costs are

Livingston Company has developed capacity standards. Information is as follows: Standard cost of the activity capacity acquired \ 250,000 Standard cost of the activity capacity used 200,000 Standard onst of the actial activity 220,000 The unused capacity variance is

Kaizen costing is concerned with reducing the costs by identifying small, continuous improvement for existing products and processes.

A time-and-motion study revealed that it should take 3 hours to produce a product that currently takes 7 hours to produce. Labor is $9 per hour. The non-value-added costs are

Describe how activity-based management and activity-based costing systems differ.

Which of the following is a reason for managerial activity to be considered a value-added activity?

Which of the following is part of the cost and process dimensions of the activity-based management model?

For non-value-added activities that are unnecessary, the standard quantity is

Driver analysis identifies performance levels.

Which of the following is a reason for an activity-based management (ABM) system breakdown?

A company has 5 days of finished goods inventory on hand to avoid stockouts. The carrying costs of the inventory average $5,000 per day. The value-added costs are

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 value-added costs are

Activity-based costing is very concerned with waste issues.

The capacity variance is composed of the unused capacity variance and

Activity-based costing does not provide good information for activity-based management.

Activity-based management attempts to

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

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Exam 12: Activity-Based Management

The process that decreases the time and resources required by different activities is called:

A financial-based responsibility accounting system focuses on the assignment of responsibility to organizational units and measures performance in financial terms.

A time-and-motion study revealed that it should take 2 hours to produce a product that currently takes 6 hours to produce. Labor is $8 per hour. The value-added costs are

Livingston Company has developed capacity standards. Information is as follows: Standard cost of the activity capacity acquired \ 250,000 Standard cost of the activity capacity used 200,000 Standard onst of the actial activity 220,000 The unused capacity variance is

Kaizen costing is concerned with reducing the costs by identifying small, continuous improvement for existing products and processes.

A time-and-motion study revealed that it should take 3 hours to produce a product that currently takes 7 hours to produce. Labor is $9 per hour. The non-value-added costs are

Describe how activity-based management and activity-based costing systems differ.

Which of the following is a reason for managerial activity to be considered a value-added activity?

Which of the following is part of the cost and process dimensions of the activity-based management model?

For non-value-added activities that are unnecessary, the standard quantity is

Driver analysis identifies performance levels.

Which of the following is a reason for an activity-based management (ABM) system breakdown?

A company has 5 days of finished goods inventory on hand to avoid stockouts. The carrying costs of the inventory average $5,000 per day. The value-added costs are

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 value-added costs are

Activity-based costing is very concerned with waste issues.

The capacity variance is composed of the unused capacity variance and

Activity-based costing does not provide good information for activity-based management.

Activity-based management attempts to

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