Question 1

What might be a reason to NOT change from a traditionally-based costing system to an activity-based costing system?

Accepted Answer

A) Products or services are similar in volume and activity. 
B) Support services are spread evenly throughout the company's activities. 
C) Overhead is a low component of the overall cost. 
D) All of the above are valid reasons. 
A) Products or services are similar in volume and activity. 
B) Support services are spread evenly throughout the company's activities. 
C) Overhead is a low component of the overall cost. 
D) All of the above are valid reasons.

Question 2

Engineering design is a value-added activity.

Accepted Answer

A) True 
 B)False

Question 3

In companies where there is good reason to change from a traditionally-based costing system to an activity-based costing system, management might expect

Accepted Answer

A) products or services with high volumes will have higher overhead costs. 
B) products or services with high volumes will have lowered overhead costs. 
C) products or services with low volumes will have lowered overhead costs. 
D) products or services with high volumes are generally costed accurately. 
A) products or services with high volumes will have higher overhead costs. 
B) products or services with high volumes will have lowered overhead costs. 
C) products or services with low volumes will have lowered overhead costs. 
D) products or services with high volumes are generally costed accurately.

Question 4

Machining is a non-value-added activity.

Accepted Answer

A) True 
 B)False

Question 5

Port Accounting performs two types of services, Audit and Tax.Port's overhead costs consist of computer support, $240,000; and legal support, $120,000.Information on the two services is: $$\begin{array} { l r r } 
& \text { Audit } & \text { Tax }  \
\text { Direct labour cost } & \$ 50,000 & \$ 100,000 \
\text { CPU minutes } & 40,000 & 10,000 \
\text { Legal hours used } & 200 & 800
\end{array}$$ Overhead applied to audit services using traditional costing is

Accepted Answer

A) $120,000. 
B) $144,000. 
C) $216,000. 
D) $240,000. 
A) $120,000. 
B) $144,000. 
C) $216,000. 
D) $240,000.

What might be a reason to NOT change from a traditionally-based costing system to an activity-based costing system?

Engineering design is a value-added activity.

In companies where there is good reason to change from a traditionally-based costing system to an activity-based costing system, management might expect

Machining is a non-value-added activity.

Managerial Accounting

Managerial Cost Concepts and Cost Behaviour Analysis

Job-Order Cost Accounting

Process Cost Accounting

Decision-Making: Costvolumeprofit

Incremental Analysis

Alternative Inventory Costing Methods: a Decision-Making Perspective

Pricing

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

Filters

Exam 5: Activity-Based Costing

What might be a reason to NOT change from a traditionally-based costing system to an activity-based costing system?

Engineering design is a value-added activity.

In companies where there is good reason to change from a traditionally-based costing system to an activity-based costing system, management might expect

Machining is a non-value-added activity.

Managerial Accounting

Managerial Cost Concepts and Cost Behaviour Analysis

Job-Order Cost Accounting

Process Cost Accounting

Decision-Making: Costvolumeprofit

Incremental Analysis

Alternative Inventory Costing Methods: a Decision-Making Perspective

Pricing

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

Filters