Question 1

Each cost incurred in a business has a single cost driver that causes that cost to be incurred.

Accepted Answer

A) True 
 B)False

Question 2

Return on investment is calculated as

Accepted Answer

A)  sales divided by total assets. 
B)  sales divided by stockholders' equity. 
C)  income divided by assets. 
D)  income divided by stockholders' equity. 
E)  (income plus interest) divided by net assets. 
A)  sales divided by total assets. 
B)  sales divided by stockholders' equity. 
C)  income divided by assets. 
D)  income divided by stockholders' equity. 
E)  (income plus interest) divided by net assets.

Question 3

DeMaris Corp. must calibrate its equipment before each production run. Each calibration costs $3,000. During 2010, DeMaris calibrated its equipment six times and produced 720,000 units of product: 120,000 of Product X in two production runs and 600,000 units of Product Y in four production runs. The calibration cost per unit for X and Y is
Product X &emsp; Product Y

Accepted Answer

A)  $0.050 &emsp; $0.020 
B)  $0.020 &emsp; $0.050 
C)  $0.025 &emsp; $0.025 
D)  $0.025 &emsp; $0.005 
E)  $0.005 &emsp; $0.025 
A)  $0.050 &emsp; $0.020 
B)  $0.020 &emsp; $0.050 
C)  $0.025 &emsp; $0.025 
D)  $0.025 &emsp; $0.005 
E)  $0.005 &emsp; $0.025

Question 4

Use the following information to answer questions 
Rather Corp. produces two types of computers: laptops and netbooks. Overhead cost pools and activity information for the year are as follows:
  
-Assume that activity-based costing is used to assign overhead costs to computers. What amount of setup cost would be assigned to laptop computers if twice as many laptops were made as netbooks?

Accepted Answer

A)  $ 62,500 
B)  $ 66.667 
C)  $133,333 
D)  $137,500 
E)  none of the above 
A)  $ 62,500 
B)  $ 66.667 
C)  $133,333 
D)  $137,500 
E)  none of the above

Question 5

A process map is a visual representation of

Accepted Answer

A)  the value-added steps and average times in completing a process. 
B)  the non-value-added steps and average times in completing a process. 
C)  the value-added and the business-value-added steps and average times in completing a process. 
D)  all the steps and times in completing a process. 
E)  the flow of a production unit through the manufacturing plant. 
A)  the value-added steps and average times in completing a process. 
B)  the non-value-added steps and average times in completing a process. 
C)  the value-added and the business-value-added steps and average times in completing a process. 
D)  all the steps and times in completing a process. 
E)  the flow of a production unit through the manufacturing plant.

Question 6

During holiday periods, Consolidated Department Store wraps numerous small gifts and stocks them for sale. From the customers' perspective, the gift wrapping is a(an)

Accepted Answer

A)  value-added activity. 
B)  unnecessary activity. 
C)  business-value-added-activity. 
D)  cost driver. 
E)  non-value added activity. 
A)  value-added activity. 
B)  unnecessary activity. 
C)  business-value-added-activity. 
D)  cost driver. 
E)  non-value added activity.

Question 7

Activity-based management

Accepted Answer

A)  helps in identifying key value creating activities and related costs. 
B)  is important in all organizations. 
C)  is not really needed if there is a good budgeting system in place. 
D)  assists in reengineering business operations. 
E)  both a and d 
A)  helps in identifying key value creating activities and related costs. 
B)  is important in all organizations. 
C)  is not really needed if there is a good budgeting system in place. 
D)  assists in reengineering business operations. 
E)  both a and d

Question 8

For an activity to be value-added,

Accepted Answer

A)  it must be performed for every transaction. 
B)  customers must be willing to pay for it. 
C)  it must make the organization function more effectively. 
D)  managers must measure and reward it. 
E)  all of the above. 
A)  it must be performed for every transaction. 
B)  customers must be willing to pay for it. 
C)  it must make the organization function more effectively. 
D)  managers must measure and reward it. 
E)  all of the above.

Question 9

Use the following information to answer questions 
Woller Meat Packing produces frozen hamburgers and sausages. During 2010, the company incurred $600,000 of overhead. Overhead costs and their related cost drivers are as follows:
  
-If Woller uses activity-based costing, how much total overhead should be assigned to hamburgers?

Accepted Answer

A)  $126,000 
B)  $128,000 
C)  $198,000 
D)  $242,000 
E)  $358,000 
A)  $126,000 
B)  $128,000 
C)  $198,000 
D)  $242,000 
E)  $358,000

Question 10

Hildebrand's Inc. posts a security guard to check receipts for purchases as customers leave the store. From the customers' perspective, this activity

Accepted Answer

A)  is value-added. 
B)  is non-value added. 
C)  creates a standard cost. 
D)  indicates that the store is an investment center. 
E)  is necessary so that Hildebrand can prepare a process map. 
A)  is value-added. 
B)  is non-value added. 
C)  creates a standard cost. 
D)  indicates that the store is an investment center. 
E)  is necessary so that Hildebrand can prepare a process map.

Question 11

Activities that are considered a key part of an organization's business but for which consumers are not willing to pay are called

Accepted Answer

A)  negative cost drivers. 
B)  value-added activities. 
C)  non-value-added activities. 
D)  business value-added activities. 
E)  business non-value-added activities. 
A)  negative cost drivers. 
B)  value-added activities. 
C)  non-value-added activities. 
D)  business value-added activities. 
E)  business non-value-added activities.

Question 12

An employee at the North Carolina Recliner Company checks each recliner for product defects. This time is

Accepted Answer

The answer of An employee at the North Carolina Recliner...

Question 13

Traditionally, cost drivers were viewed only at the

Accepted Answer

A)  unit level. 
B)  batch level. 
C)  product/process level. 
D)  organizational level. 
E)  activity level. 
A)  unit level. 
B)  batch level. 
C)  product/process level. 
D)  organizational level. 
E)  activity level.

Question 14

A organizational unit is evaluated on the basis of ROI. If the unit's sales and expenses both increase by $20,000, how will the following measures be affected?

Accepted Answer

The answer of A organizational unit is evaluated on the...

Question 15

Use the following information to answer questions 
Rather Corp. produces two types of computers: laptops and netbooks. Overhead cost pools and activity information for the year are as follows:
  
-Assume that activity-based costing is used to assign overhead costs to computers. What amount of setup cost would be assigned to laptop computers if twice as many laptops were made as netbooks?

Accepted Answer

A)  $ 62,500 
B)  $ 66.667 
C)  $133,333 
D)  $137,500 
E)  none of the above 
A)  $ 62,500 
B)  $ 66.667 
C)  $133,333 
D)  $137,500 
E)  none of the above

Question 16

Use the following information to answer questions 
Following are Greyson Corporation's 2010 year-end balance sheet and 2010 income statements.
‪  
-What is Greyson's 2010 return on investment?

Accepted Answer

A)  7.5% 
B)  12.0% 
C)  19.2% 
D)  28.8% 
E)  62.5% 
A)  7.5% 
B)  12.0% 
C)  19.2% 
D)  28.8% 
E)  62.5%

Question 17

For a performance measurement system to be effective, it should be aligned with customer value.

Accepted Answer

A) True 
 B)False

Question 18

The formula for the Du Pont model is

Accepted Answer

A)  (income ÷ assets) x (income ÷ sales). 
B)  (income ÷ revenues) x (revenues ÷ assets). 
C)  (income ÷ revenues) x (revenues ÷ stockholders' equity). 
D)  (revenues ÷ income) x (income ÷ assets). 
E)  (income ÷ stockholders' equity) x (stockholders' equity ÷ net assets). 
A)  (income ÷ assets) x (income ÷ sales). 
B)  (income ÷ revenues) x (revenues ÷ assets). 
C)  (income ÷ revenues) x (revenues ÷ stockholders' equity). 
D)  (revenues ÷ income) x (income ÷ assets). 
E)  (income ÷ stockholders' equity) x (stockholders' equity ÷ net assets).

Question 19

Performance rewards should be structured so that all employees in the company receive the same types of rewards in the same pro

Accepted Answer

A) True 
 B)False

Question 20

How would each of the following costs be classified?

Accepted Answer

The answer of How would each of the following costs...

Each cost incurred in a business has a single cost driver that causes that cost to be incurred.

Return on investment is calculated as

A process map is a visual representation of

During holiday periods, Consolidated Department Store wraps numerous small gifts and stocks them for sale. From the customers' perspective, the gift wrapping is a(an)

Activity-based management

For an activity to be value-added,

Hildebrand's Inc. posts a security guard to check receipts for purchases as customers leave the store. From the customers' perspective, this activity

Activities that are considered a key part of an organization's business but for which consumers are not willing to pay are called

An employee at the North Carolina Recliner Company checks each recliner for product defects. This time is

Traditionally, cost drivers were viewed only at the

A organizational unit is evaluated on the basis of ROI. If the unit's sales and expenses both increase by $20,000, how will the following measures be affected?

Use the following information to answer questions Following are Greyson Corporation's 2010 year-end balance sheet and 2010 income statements. ‪ -What is Greyson's 2010 return on investment?

For a performance measurement system to be effective, it should be aligned with customer value.

The formula for the Du Pont model is

Performance rewards should be structured so that all employees in the company receive the same types of rewards in the same pro

How would each of the following costs be classified?

An Introduction to the Role of Accounting in the Business World

Concepts and Elements Underlying Accounting

The Mechanics of Double-Entry Bookkeeping

Cash, Short-Term Investments and Accounts Receivable

Inventory

Long-Term Assets: Property, Plant Equipment and Intangibles

Liabilities

Stockholders Equity

The Corporate Income Statement and Financial Analysis

Statement of Cash Flows

Managerial Accounting

Cost-Volume-Profit Analysis

The Master Budget

Filters

Exam 14: Activity-Based Management and Performance Measurementreward

Each cost incurred in a business has a single cost driver that causes that cost to be incurred.

Return on investment is calculated as

A process map is a visual representation of

During holiday periods, Consolidated Department Store wraps numerous small gifts and stocks them for sale. From the customers' perspective, the gift wrapping is a(an)

Activity-based management

For an activity to be value-added,

Hildebrand's Inc. posts a security guard to check receipts for purchases as customers leave the store. From the customers' perspective, this activity

Activities that are considered a key part of an organization's business but for which consumers are not willing to pay are called

An employee at the North Carolina Recliner Company checks each recliner for product defects. This time is

Traditionally, cost drivers were viewed only at the

A organizational unit is evaluated on the basis of ROI. If the unit's sales and expenses both increase by $20,000, how will the following measures be affected?

Use the following information to answer questions Following are Greyson Corporation's 2010 year-end balance sheet and 2010 income statements. ‪ -What is Greyson's 2010 return on investment?

For a performance measurement system to be effective, it should be aligned with customer value.

The formula for the Du Pont model is

Performance rewards should be structured so that all employees in the company receive the same types of rewards in the same pro

How would each of the following costs be classified?

An Introduction to the Role of Accounting in the Business World

Concepts and Elements Underlying Accounting

The Mechanics of Double-Entry Bookkeeping

Cash, Short-Term Investments and Accounts Receivable

Inventory

Long-Term Assets: Property, Plant Equipment and Intangibles

Liabilities

Stockholders Equity

The Corporate Income Statement and Financial Analysis

Statement of Cash Flows

Managerial Accounting

Cost-Volume-Profit Analysis

The Master Budget

Filters