Question 1

Cost accounting systems were originally developed to

Accepted Answer

A)  Assign costs to products for financial reporting purposes 
B)  Assign costs to products for tax reporting purposes 
C)  Give managers better information for making decisions 
D)  Allocate direct costs to cost objects 
A)  Assign costs to products for financial reporting purposes 
B)  Assign costs to products for tax reporting purposes 
C)  Give managers better information for making decisions 
D)  Allocate direct costs to cost objects

Question 2

All of the following are uses of Activity Based Management except

Accepted Answer

A)  Determining costs for the general ledger 
B)  Determining quality costs 
C)  Determining customer profitability 
D)  Determining non-value-added activities 
A)  Determining costs for the general ledger 
B)  Determining quality costs 
C)  Determining customer profitability 
D)  Determining non-value-added activities

Question 3

Which of the following factors are associated with successful ABC implementations?

Accepted Answer

A)  Top management support and high market share 
B)  Performance evaluations and low market share 
C)  Top management support and performance evaluations 
D)  Middle management support and high market share 
A)  Top management support and high market share 
B)  Performance evaluations and low market share 
C)  Top management support and performance evaluations 
D)  Middle management support and high market share

Question 4

All of the following are quality-related activities except

Accepted Answer

A)  Prevention activities 
B)  Production activities (spoilage and rework) 
C)  Activities undertaken to advertise high quality 
D)  Post-sales activities 
A)  Prevention activities 
B)  Production activities (spoilage and rework) 
C)  Activities undertaken to advertise high quality 
D)  Post-sales activities

Question 5

Use the following information for the next 2 questions.
(CMA) Flagler Corporation is preparing its annual profit plan. As part of its analysis of the profitability of individual products, the controller estimates the amount of overhead that should be assigned to the individual product lines from the information given as follows:  
-Under a costing system that assigns overhead on the basis of direct labor hours, the materials handling costs allocated to one unit of wall mirrors would be

Accepted Answer

A)  $1,000 
B)  $500 
C)  $2,000 
D)  $5,000 
A)  $1,000 
B)  $500 
C)  $2,000 
D)  $5,000

Question 6

One difference between a traditional costing system and an ABC system is

Accepted Answer

A)  An ABC system allocates overhead to units of goods or services 
B)  An ABC system has more cost pools and more cost drivers 
C)  An ABC system traces direct materials to units and considers them to vary with volume 
D)  Information from an ABC system can be used for GAAP 
A)  An ABC system allocates overhead to units of goods or services 
B)  An ABC system has more cost pools and more cost drivers 
C)  An ABC system traces direct materials to units and considers them to vary with volume 
D)  Information from an ABC system can be used for GAAP

Question 7

When managers use ABC cost allocation rates for decision making without distinguishing between flexible and committed costs, their estimates of incremental costs are biased upward or downward. If activity levels are steadily increasing over time, this bias would provide

Accepted Answer

A)  Information that overstates costs 
B)  Information that understates costs 
C)  Accurate information 
D)  Reliable information 
A)  Information that overstates costs 
B)  Information that understates costs 
C)  Accurate information 
D)  Reliable information

Question 8

For small manufacturing firms, ABC systems are best with

Accepted Answer

The answer of For small manufacturing firms, ABC systems are...

Question 9

Use the following information for the next 4 questions.
Iowa Industries has two divisions, North and South. You are given the following information about the costs of 5 activities that occur at corporate headquarters:  
-How much of the total activity costs will be allocated to North Division?

Accepted Answer

A)  $323,214 
B)  $376,786 
C)  $341,463 
D)  $358,537 
A)  $323,214 
B)  $376,786 
C)  $341,463 
D)  $358,537

Question 10

BVH Corporation manufactures and sells cellular phones. Which of the following activities is least likely to be considered a value-added activity for BVH?

Accepted Answer

A)  Repairing phones 
B)  Offering phones for sale in designer colors 
C)  Making phones smaller 
D)  Creating several ring-tone options for cellular phones 
A)  Repairing phones 
B)  Offering phones for sale in designer colors 
C)  Making phones smaller 
D)  Creating several ring-tone options for cellular phones

Question 11

Activity Based Costing can be used for I. Allocating manufacturing overhead
II. Allocating nonmanufacturing department costs
III. Determining customer related costs

Accepted Answer

A)  I and II only 
B)  II and III only 
C)  I, II, and III 
D)  II only 
A)  I and II only 
B)  II and III only 
C)  I, II, and III 
D)  II only

Question 12

If the number of tutors in each area is the cost driver for custodial services, the total custodial services cost allocated to history would be:

Accepted Answer

A)  $450 
B)  $270 
C)  $257 
D)  None of the above 
A)  $450 
B)  $270 
C)  $257 
D)  None of the above

Question 13

Which of the following statements about costing systems is true?

Accepted Answer

A)  Both traditional and activity-based costing systems use a two-stage allocation process 
B)  Traditional costing systems use a two-stage allocation process, but ABC systems require three stages 
C)  ABC systems typically use a two-stage allocation process, whereas traditional systems use a single stage 
D)  Both traditional and activity-based costing systems use a three-stage allocation process 
A)  Both traditional and activity-based costing systems use a two-stage allocation process 
B)  Traditional costing systems use a two-stage allocation process, but ABC systems require three stages 
C)  ABC systems typically use a two-stage allocation process, whereas traditional systems use a single stage 
D)  Both traditional and activity-based costing systems use a three-stage allocation process

Question 14

ABC provides more accurate product costs than traditional costing because

Accepted Answer

A)  Traditional costing uses fewer cost pools for indirect costs 
B)  Traditional costing is less likely to have indirect cost pools with similar cost behavior 
C)  Activities are measurable events, and activity counts often make good cost drivers in ABC because there is a better cause-and-effect relationship with costs 
D)  All of the above 
A)  Traditional costing uses fewer cost pools for indirect costs 
B)  Traditional costing is less likely to have indirect cost pools with similar cost behavior 
C)  Activities are measurable events, and activity counts often make good cost drivers in ABC because there is a better cause-and-effect relationship with costs 
D)  All of the above

Question 15

Which of the following groups of costs are most likely to have a common cost driver?

Accepted Answer

A)  Advertising & computer equipment depreciation 
B)  Computer equipment depreciation & utilities 
C)  Utilities & custodial services 
D)  Utilities & advertising 
A)  Advertising & computer equipment depreciation 
B)  Computer equipment depreciation & utilities 
C)  Utilities & custodial services 
D)  Utilities & advertising

Question 16

Ted's Manufacturing makes two products, B and C. They each take 2 direct labor hours and 2 machine hours to produce. A batch of Product B, however, uses twice the number of machine set-ups and requires 3 times as many materials requisitions as does Product C. Which of the following is most likely true?

Accepted Answer

A)  The product cost of Product C will be higher under ABC than under traditional costing 
B)  Traditional costing assigns a product cost that is too low to Product B 
C)  Traditional costing assigns a product cost that is too low to Product C 
D)  The product cost of Product B will be higher under ABC than under traditional costing 
A)  The product cost of Product C will be higher under ABC than under traditional costing 
B)  Traditional costing assigns a product cost that is too low to Product B 
C)  Traditional costing assigns a product cost that is too low to Product C 
D)  The product cost of Product B will be higher under ABC than under traditional costing

Question 17

Lookin' for a Home is an animal shelter in Omaha, Nebraska. The shelter relies on government grants and private donations for funding. It takes in homeless dogs and cats and keeps them until they are adopted by qualified individuals. One of the shelter's cost pools is animal recordkeeping, which involves maintaining a database with details about each animal in the shelter. Which of the following is the most appropriate cost driver for the animal recordkeeping cost pool?

Accepted Answer

A)  Number of government grants sought 
B)  Number of employees who work in the shelter 
C)  Number of animal intake and adoption transactions 
D)  Square feet allocated to the recordkeeping operation 
A)  Number of government grants sought 
B)  Number of employees who work in the shelter 
C)  Number of animal intake and adoption transactions 
D)  Square feet allocated to the recordkeeping operation

Question 18

Under GPK a cost center is a department or larger cost object.

Accepted Answer

A) True 
 B)False

Question 19

The process of using ABC information to evaluate the costs and benefits of production and internal support activities is called

Accepted Answer

A)  Activity-based management 
B)  Activity-based budgeting 
C)  Activity-based costing 
D)  Activity-based consulting 
A)  Activity-based management 
B)  Activity-based budgeting 
C)  Activity-based costing 
D)  Activity-based consulting

Question 20

In an ABC system, a "cost object" could be a unit of product, a product line, or a customer.

Accepted Answer

A) True 
 B)False

Cost accounting systems were originally developed to

All of the following are uses of Activity Based Management except

Which of the following factors are associated with successful ABC implementations?

All of the following are quality-related activities except

One difference between a traditional costing system and an ABC system is

When managers use ABC cost allocation rates for decision making without distinguishing between flexible and committed costs, their estimates of incremental costs are biased upward or downward. If activity levels are steadily increasing over time, this bias would provide

For small manufacturing firms, ABC systems are best with

Use the following information for the next 4 questions. Iowa Industries has two divisions, North and South. You are given the following information about the costs of 5 activities that occur at corporate headquarters: -How much of the total activity costs will be allocated to North Division?

BVH Corporation manufactures and sells cellular phones. Which of the following activities is least likely to be considered a value-added activity for BVH?

Activity Based Costing can be used for I. Allocating manufacturing overhead II. Allocating nonmanufacturing department costs III. Determining customer related costs

If the number of tutors in each area is the cost driver for custodial services, the total custodial services cost allocated to history would be:

Which of the following statements about costing systems is true?

ABC provides more accurate product costs than traditional costing because

Which of the following groups of costs are most likely to have a common cost driver?

Under GPK a cost center is a department or larger cost object.

The process of using ABC information to evaluate the costs and benefits of production and internal support activities is called

In an ABC system, a "cost object" could be a unit of product, a product line, or a customer.

The Role of Accounting Information in Management Decision Making

The Cost Function

Cost-Volume-Profit Analysis

Relevant Costs for Nonroutine Operating Decision

Job Costing

Process Costing

Measuring and Assigning Support Department Costs

Joint Product and By-Product Costing

Static and Flexible Budgets

Standard Costs and Variance Analysis

Strategic Investment Decisions

Joint Management of Revenues and Costs

Measuring and Assigning Costs for Income Statements

Performance Evaluation and Compensation

Strategic Performance Measurement

Sustainability Accounting

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Exam 7: Activity-Based Costing and Management

Cost accounting systems were originally developed to

All of the following are uses of Activity Based Management except

Which of the following factors are associated with successful ABC implementations?

All of the following are quality-related activities except

One difference between a traditional costing system and an ABC system is

When managers use ABC cost allocation rates for decision making without distinguishing between flexible and committed costs, their estimates of incremental costs are biased upward or downward. If activity levels are steadily increasing over time, this bias would provide

For small manufacturing firms, ABC systems are best with

Use the following information for the next 4 questions. Iowa Industries has two divisions, North and South. You are given the following information about the costs of 5 activities that occur at corporate headquarters: -How much of the total activity costs will be allocated to North Division?

BVH Corporation manufactures and sells cellular phones. Which of the following activities is least likely to be considered a value-added activity for BVH?

Activity Based Costing can be used for I. Allocating manufacturing overhead II. Allocating nonmanufacturing department costs III. Determining customer related costs

If the number of tutors in each area is the cost driver for custodial services, the total custodial services cost allocated to history would be:

Which of the following statements about costing systems is true?

ABC provides more accurate product costs than traditional costing because

Which of the following groups of costs are most likely to have a common cost driver?

Under GPK a cost center is a department or larger cost object.

The process of using ABC information to evaluate the costs and benefits of production and internal support activities is called

In an ABC system, a "cost object" could be a unit of product, a product line, or a customer.

The Role of Accounting Information in Management Decision Making

The Cost Function

Cost-Volume-Profit Analysis

Relevant Costs for Nonroutine Operating Decision

Job Costing

Process Costing

Measuring and Assigning Support Department Costs

Joint Product and By-Product Costing

Static and Flexible Budgets

Standard Costs and Variance Analysis

Strategic Investment Decisions

Joint Management of Revenues and Costs

Measuring and Assigning Costs for Income Statements

Performance Evaluation and Compensation

Strategic Performance Measurement

Sustainability Accounting

Filters