Exam 7: Activity-Based Costing and Management

When a new product can be designed to use components already being used by other products this is known as ________________.

Figure 7-4. Honeydew Company produces two products, a high end laptop computer under the label Bunsen Laptops, and an inexpensive desktop computer under the label Beaker Computers. The two products use two overhead activities, with the following costs: The controller has collected the expected annual prime costs for each product, the machine hours, the setup hours, and the expected production. -Refer to Figure 7-4. Calculate the overhead cost per unit for each Beaker Computer, using overhead rates based on machine hours and setup hours.

Stinler Corporation manufactures curtains for retail stores and for individual customers. The retail chain buys 70% of the curtains produced. The individual customers purchase curtains in approximately equal quantities, where the orders are about the same size. Data concerning Stinler's customer activity are as follows: Currently customer-driven costs are assigned to customers based on units sold, a unit-level driver. Required: A. Assign costs to customers by using an ABC approach. B. Determine the selling (order filling and sales force) cost per unit sold for each type of customer.

Packaging inspection and process acceptance are examples of ____.

Costs incurred to prevent poor quality in the products or services being produced are

A volume-based costing system emphasizes direct tracing and driver tracing.

Match each item with the correct statement below. a. cycle time b. direct tracing c. activity sharing d. driver tracing e. value-added activities f. activity selection -The length of time it takes to produce a unit of output from the time raw materials are received until the good is delivered to finished goods inventory.

The process of decreasing the time and resources required by an activity is known as

Receiving provides 12,000 receiving hours and costs $60,000 per year. What is the activity rate for receiving?

A focus on cost reduction instead of cost assignment and emphasizing the maximization of systemwide performance is known as _______________________.

A work distribution matrix is derived from an interview or a written survey.

Which is not defined as a category of quality-related costs?

Match each item with the correct statement below. a. activity analysis b. value-added costs c. velocity d. activity inputs e. activity output measure f. activity output -The number of times an activity is performed.

Figure 7-4. Honeydew Company produces two products, a high end laptop computer under the label Bunsen Laptops, and an inexpensive desktop computer under the label Beaker Computers. The two products use two overhead activities, with the following costs: The controller has collected the expected annual prime costs for each product, the machine hours, the setup hours, and the expected production. -Refer to Figure 7-4. Calculate the overhead cost per unit for Bunsen Laptops, using a plantwide rate based on direct labor costs.

Velocity is the length of time that it takes to produce a unit o output from the time raw materials are received until the good is delivered.

A ____________________ is classified as value-added provided it simultaneously meets three conditions.

A company has developed a list of quality-related costs as follows: The company's controller is pleased with the Year 2 results and commented that the company is now on its way toward total quality. Is the controller right? Explain.

Quality improvement can increase profitability by decreasing costs.

MATCHING Match each item with the correct statement below. a. activity drivers b. activity-based costing system c. consumption ratio d. unit-level activities e. activity attributes f. resource drivers -Factors that measure the consumption of activities by products and other cost objects.

All of the following are supplier-driven activities except