Question 1

Consumption ratios are useful in determining:

Accepted Answer

A) the existence of product-line diversity. 
B) overhead that is incurred at the unit level. 
C) if overhead-producing activities are being utilized effectively. 
D) if overhead costs are being applied to products. 
E) if overhead-producing activities are being utilized eﬃciently. 
A) the existence of product-line diversity. 
B) overhead that is incurred at the unit level. 
C) if overhead-producing activities are being utilized effectively. 
D) if overhead costs are being applied to products. 
E) if overhead-producing activities are being utilized eﬃciently.

Question 2

A version of ABC that has found wide acceptance in service-industry settings is called volume-based activity-costing.

Accepted Answer

A) True 
 B)False

Question 3

Storyboarding may be used to develop a detailed process ﬂowchart.

Accepted Answer

A) True 
 B)False

Question 4

Colonial Company manufactures decorative wall clocks and uses activity-based costing.Each clock consists of 20 separate parts totaling $95 in direct materials, and requires 2.5 hours of machine time to produce.Additional information is as follows:   What is the cost of machining per clock?

Accepted Answer

A) $7.20. 
B) $18.00. 
C) $180.00. 
D) $30.00. 
E) $144.00. 
A) $7.20. 
B) $18.00. 
C) $180.00. 
D) $30.00. 
E) $144.00.

Question 5

Cozy Nights Industries manufactures down-ﬁlled comforters and uses activity-based costing.The following information is provided for September.   Each comforter consists of 4 parts and the direct materials cost per comforter is $14.00. Based on the information given for Cozy Nights Industries, what is the total manufacturing cost per comforter?

Accepted Answer

A) $3.00. 
B) $30.20. 
C) $78.80. 
D) $64.80. 
E) $89.20. 
A) $3.00. 
B) $30.20. 
C) $78.80. 
D) $64.80. 
E) $89.20.

Question 6

Many traditional costing systems:

Accepted Answer

A) trace manufacturing overhead to individual activities and require the development of numerous activity-costing rates. 
B) write off manufacturing overhead as an expense of the current period. 
C) combine widely varying elements of overhead into a single cost pool. 
D) use a host of different cost drivers (e.g., number of production setups, inspection hours, orders processed) to improve the accuracy of product 
E) produce results far superior to those achieved with activity-based costing. 
A) trace manufacturing overhead to individual activities and require the development of numerous activity-costing rates. 
B) write off manufacturing overhead as an expense of the current period. 
C) combine widely varying elements of overhead into a single cost pool. 
D) use a host of different cost drivers (e.g., number of production setups, inspection hours, orders processed) to improve the accuracy of product 
E) produce results far superior to those achieved with activity-based costing.

Question 7

St.Vincent's, Inc., currently uses traditional costing procedures, applying $800,000 of overhead to products Beta and Zeta on the basis of direct labor hours. The company is considering a shift to activity-based costing and the creation of individual cost pools that will use direct labor hours (DLH), production setups (SU), and number of parts components (PC) as cost drivers.Data on the cost pools and respective driver volumes follow.   The overhead cost allocated to Zeta by using activity-based costing procedures would be:

Accepted Answer

A) $240,000. 
B) $356,000. 
C) $444,000. 
D) $560,000. 
E) None of the answers is correct. 
A) $240,000. 
B) $356,000. 
C) $444,000. 
D) $560,000. 
E) None of the answers is correct.

Question 8

Barnett Products manufactures three types of remote-control devices: Economy, Standard, and Deluxe.The company, which uses activity-based costing, has identiﬁed ﬁve activities (and related cost drivers).Each activity, its budgeted cost, and related cost driver is identiﬁed below.   What is Barnett's pool rate for the material-insertion activity?

Accepted Answer

A) $11.00 per part. 
B) $49.50 per part. 
C) $16.18 per labor hour. 
D) $1.00 per part. 
E) None of the answers is correct. 
A) $11.00 per part. 
B) $49.50 per part. 
C) $16.18 per labor hour. 
D) $1.00 per part. 
E) None of the answers is correct.

Question 9

Willow Springs produces various wooden bookcases, tables, storage units, and chairs.Which of the following would be included in a listing of the company's non-value-added activities?

Accepted Answer

A) Assembly of tables. 
B) Staining of storage units. 
C) Transfer of chairs from the assembly line to the staining facility. 
D) Storage of completed bookcases in inventory. 
E) Transfer of chairs from the assembly line to the staining facility and storage of completed bookcases in inventory. 
A) Assembly of tables. 
B) Staining of storage units. 
C) Transfer of chairs from the assembly line to the staining facility. 
D) Storage of completed bookcases in inventory. 
E) Transfer of chairs from the assembly line to the staining facility and storage of completed bookcases in inventory.

Question 10

An example of a customer-value-added activity is:

Accepted Answer

A) ﬁnal painting and polishing of the product. 
B) installation of a computerized human resource management module. 
C) shortening the customers' billing cycle. 
D) addition of an employee hotline for workplace complaints. 
E) maintenance of an adequate safety stock. 
A) ﬁnal painting and polishing of the product. 
B) installation of a computerized human resource management module. 
C) shortening the customers' billing cycle. 
D) addition of an employee hotline for workplace complaints. 
E) maintenance of an adequate safety stock.

Question 11

Barnett Products manufactures three types of remote-control devices: Economy, Standard, and Deluxe.The company, which uses activity-based costing, has identiﬁed ﬁve activities (and related cost drivers).Each activity, its budgeted cost, and related cost driver is identiﬁed below.   The following information pertains to the three product lines for next year:   What is Barnett's pool rate for the packaging activity?

Accepted Answer

A) $4.86 per machine hour. 
B) $5.00 per labor hour. 
C) $10.00 per part. 
D) $100.00 per order shipped. 
E) None of the answers is correct. 
A) $4.86 per machine hour. 
B) $5.00 per labor hour. 
C) $10.00 per part. 
D) $100.00 per order shipped. 
E) None of the answers is correct.

Question 12

Engineering design costs are typically known as batch-level activities.

Accepted Answer

A) True 
 B)False

Question 13

Edwards Company manufactures low-cost wooden chairs and uses activity-based costing.The following information is for the month of March.   Each chair consists of 4 parts and the direct materials cost per chair is $7.00. Based on the information given for Edwards Company, what is the cost of materials handling and assembly per chair?

Accepted Answer

A) $4.60. 
B) $17.00. 
C) $14.40. 
D) $12.40. 
E) $24.00. 
A) $4.60. 
B) $17.00. 
C) $14.40. 
D) $12.40. 
E) $24.00.

Question 14

A bill of activities is a complete listing of the activities identiﬁed and used in the ABC analysis.

Accepted Answer

A) True 
 B)False

Question 15

Magnolia Industries combines all manufacturing overhead into a single cost pool and allocates this overhead to products by using machine hours.Activity- based costing would likely show that with Magnolia's current procedures that:

Accepted Answer

A) all of the company's products are undercosted. 
B) the company's high-volume products are undercosted. 
C) all of the company's products are overcosted. 
D) the company's high-volume products are overcosted. 
E) the company's low-volume products are overcosted. 
A) all of the company's products are undercosted. 
B) the company's high-volume products are undercosted. 
C) all of the company's products are overcosted. 
D) the company's high-volume products are overcosted. 
E) the company's low-volume products are overcosted.

Question 16

When determining customer proﬁtability, activity-based costing can be used to analyze:

Accepted Answer

A) orders processed. 
B) sales visits. 
C) special packaging and handling. 
D) billing and collections. 
E) All of the answers are correct. 
A) orders processed. 
B) sales visits. 
C) special packaging and handling. 
D) billing and collections. 
E) All of the answers are correct.

Question 17

Barnett Products manufactures three types of remote-control devices: Economy, Standard, and Deluxe.The company, which uses activity-based costing, has identiﬁed ﬁve activities (and related cost drivers).Each activity, its budgeted cost, and related cost driver is identiﬁed below.   Under Barnett's activity-based costing system, what is the per-unit overhead cost of Standard?

Accepted Answer

A) $164. 
B) $228. 
C) $272. 
D) $282. 
E) None of the answers is correct. 
A) $164. 
B) $228. 
C) $272. 
D) $282. 
E) None of the answers is correct.

Question 18

Consider the following statements regarding product-sustaining activities: I.They must be performed for each batch of product that is made. II.They must be performed for each unit of product that is made. III.They are needed to support an entire product line. Which of the above statements is (are) true?

Accepted Answer

A) I only. 
B) II only. 
C) III only. 
D) I and II. 
E) II and III. 
A) I only. 
B) II only. 
C) III only. 
D) I and II. 
E) II and III.

Question 19

Which of the following choices correctly depicts the proper classiﬁcation of direct materials used and management salaries?

Accepted Answer

A) Choice A 
B) Choice B 
C) Choice C 
D) Choice D 
E) Choice E 
A) Choice A 
B) Choice B 
C) Choice C 
D) Choice D 
E) Choice E

Question 20

Genoa Company makes three products and classiﬁes its costs as belonging to the following functions: Design, Production, Marketing, Distribution, and Customer Service.All company costs are assigned to the three products.Direct costs of each of the ﬁve functions are traced directly to the three products.The indirect costs of each of the ﬁve business functions are collected into ﬁve separate cost pools and then assigned to the three products using appropriate allocation bases.The allocation base that will most likely be the best for allocating the indirect costs of the distribution function is:

Accepted Answer

A) Dollar sales volume. 
B) Number of sales persons. 
C) Number of customer phone calls. 
D) Number of shipments. 
E) None of these answer choices is correct. 
A) Dollar sales volume. 
B) Number of sales persons. 
C) Number of customer phone calls. 
D) Number of shipments. 
E) None of these answer choices is correct.

Consumption ratios are useful in determining:

A version of ABC that has found wide acceptance in service-industry settings is called volume-based activity-costing.

Storyboarding may be used to develop a detailed process ﬂowchart.

Colonial Company manufactures decorative wall clocks and uses activity-based costing.Each clock consists of 20 separate parts totaling $95 in direct materials, and requires 2.5 hours of machine time to produce.Additional information is as follows: What is the cost of machining per clock?

Many traditional costing systems:

Willow Springs produces various wooden bookcases, tables, storage units, and chairs.Which of the following would be included in a listing of the company's non-value-added activities?

An example of a customer-value-added activity is:

Engineering design costs are typically known as batch-level activities.

A bill of activities is a complete listing of the activities identiﬁed and used in the ABC analysis.

Magnolia Industries combines all manufacturing overhead into a single cost pool and allocates this overhead to products by using machine hours.Activity- based costing would likely show that with Magnolia's current procedures that:

When determining customer proﬁtability, activity-based costing can be used to analyze:

Which of the following choices correctly depicts the proper classiﬁcation of direct materials used and management salaries?

The Changing Role of Managerial Accounting in a Dynamic Business Environment

Basic Cost Management Concepts

Product Costing and Cost Accumulation in a Batch Production Environment

Process Costing and Hybrid Product-Costing Systems

Activity Analysis, Cost Behavior, and Cost Estimation

Cost-Volume-Profit Analysis

Variable Costing and the Costs of Quality and Sustainability

Financial Planning and Analysis: the Master Budget

Standard Costing and Analysis of Direct Costs

Flexible Budgeting and Analysis of Overhead Costs

Responsibility Accounting, Operational Performance Measures, and the Balanced Scorecard

Inventory Management and Economic Order Quantity (EOQ) Analysis

Filters

Exam 5: Activity-Based Costing and Management

Consumption ratios are useful in determining:

A version of ABC that has found wide acceptance in service-industry settings is called volume-based activity-costing.

Storyboarding may be used to develop a detailed process ﬂowchart.

Colonial Company manufactures decorative wall clocks and uses activity-based costing.Each clock consists of 20 separate parts totaling $95 in direct materials, and requires 2.5 hours of machine time to produce.Additional information is as follows: What is the cost of machining per clock?

Many traditional costing systems:

Willow Springs produces various wooden bookcases, tables, storage units, and chairs.Which of the following would be included in a listing of the company's non-value-added activities?

An example of a customer-value-added activity is:

Engineering design costs are typically known as batch-level activities.

A bill of activities is a complete listing of the activities identiﬁed and used in the ABC analysis.

Magnolia Industries combines all manufacturing overhead into a single cost pool and allocates this overhead to products by using machine hours.Activity- based costing would likely show that with Magnolia's current procedures that:

When determining customer proﬁtability, activity-based costing can be used to analyze:

Which of the following choices correctly depicts the proper classiﬁcation of direct materials used and management salaries?

The Changing Role of Managerial Accounting in a Dynamic Business Environment

Basic Cost Management Concepts

Product Costing and Cost Accumulation in a Batch Production Environment

Process Costing and Hybrid Product-Costing Systems

Activity Analysis, Cost Behavior, and Cost Estimation

Cost-Volume-Profit Analysis

Variable Costing and the Costs of Quality and Sustainability

Financial Planning and Analysis: the Master Budget

Standard Costing and Analysis of Direct Costs

Flexible Budgeting and Analysis of Overhead Costs

Responsibility Accounting, Operational Performance Measures, and the Balanced Scorecard

Inventory Management and Economic Order Quantity (EOQ) Analysis

Filters