Question 1

An activity-based costing system is necessary for costing services that are different.

Accepted Answer

A) True 
 B)False

Question 2

Traditional cost systems are likely to overcost simple products with higher production volume.

Accepted Answer

A) True 
 B)False

Question 3

The focus of ABC systems is on:

Accepted Answer

A) long-term decisions. 
B) short-term decisions. 
C) make-or-buy decisions. 
D) special-pricing decisions. 
A) long-term decisions. 
B) short-term decisions. 
C) make-or-buy decisions. 
D) special-pricing decisions.

Question 4

All of the following situations cause major deterrents to effective ABC implementation EXCEPT when:

Accepted Answer

A) the ABC system lacks a clear business purpose. 
B) the ABC system's model design is poor. 
C) the ABC consultants fail to adapt the ABC system adequately to the specifics of the organization. 
D) senior management communicates their commitment to the change. 
A) the ABC system lacks a clear business purpose. 
B) the ABC system's model design is poor. 
C) the ABC consultants fail to adapt the ABC system adequately to the specifics of the organization. 
D) senior management communicates their commitment to the change.

Question 5

Discuss the advantages of a time-based ABC system.

Accepted Answer

Time-driven ABC systems are less time-co

Question 6

Activity based pricing prices products,not orders.

Accepted Answer

A) True 
 B)False

Question 7

Activity-based cost systems use cost centers to accumulate costs.

Accepted Answer

A) True 
 B)False

Question 8

Webster Company provides the following $ A B C $ costing information:  
The above activities are used by Departments $ A $ and $ B $ as follows:  
-How much of the account billing costs will be assigned to Department B?

Accepted Answer

A) $7,500 
B) $12.500 
C) $15,000 
D) $25,000 
A) $7,500 
B) $12.500 
C) $15,000 
D) $25,000

Question 9

Activity-based costing (ABC)can eliminate cost distortions because ABC:

Accepted Answer

A) develops cost drivers that directly link the activities performed to the products manufactured. 
B) establishes multiple cost pools. 
C) employs capacity-related cost drivers. 
D) recognizes interactions between different departments in assigning overhead costs. 
A) develops cost drivers that directly link the activities performed to the products manufactured. 
B) establishes multiple cost pools. 
C) employs capacity-related cost drivers. 
D) recognizes interactions between different departments in assigning overhead costs.

Question 10

Which of the following is a sign that an ABC system may be useful?

Accepted Answer

A) There are small amounts of overhead costs. 
B) Products make diverse demands on resources because of differences in volume, process steps, batch size, or complexity. 
C) Products a company all show large profits. 
D) Operations throughout the plant are fairly similar. 
A) There are small amounts of overhead costs. 
B) Products make diverse demands on resources because of differences in volume, process steps, batch size, or complexity. 
C) Products a company all show large profits. 
D) Operations throughout the plant are fairly similar.

Question 11

A time-driven ABC system:

Accepted Answer

A) is difficult to update. 
B) is time-consuming, expensive and often inaccurate. 
C) requires that only two parameters be updated. 
D) is based on theoretical capacity. 
A) is difficult to update. 
B) is time-consuming, expensive and often inaccurate. 
C) requires that only two parameters be updated. 
D) is based on theoretical capacity.

Question 12

Product lines that produce different variations (models,styles,or colors)often require specialized activities that translate into:

Accepted Answer

A) lower overhead costs for each product line. 
B) decisions to drop product variations. 
C) more favorable direct labor cost ratios. 
D) more overhead costs for each product line. 
A) lower overhead costs for each product line. 
B) decisions to drop product variations. 
C) more favorable direct labor cost ratios. 
D) more overhead costs for each product line.

Question 13

Determining realistic,practical capacity measurements is a(n):

Accepted Answer

A) fairly simple process. 
B) judgmental process. 
C) straightforward process. 
D) impossible process. 
A) fairly simple process. 
B) judgmental process. 
C) straightforward process. 
D) impossible process.

An activity-based costing system is necessary for costing services that are different.

Traditional cost systems are likely to overcost simple products with higher production volume.

The focus of ABC systems is on:

All of the following situations cause major deterrents to effective ABC implementation EXCEPT when:

Discuss the advantages of a time-based ABC system.

Activity based pricing prices products,not orders.

Activity-based cost systems use cost centers to accumulate costs.

Webster Company provides the following $A B C$ costing information: The above activities are used by Departments $A$ and $B$ as follows: -How much of the account billing costs will be assigned to Department B?

Activity-based costing (ABC)can eliminate cost distortions because ABC:

Which of the following is a sign that an ABC system may be useful?

A time-driven ABC system:

Product lines that produce different variations (models,styles,or colors)often require specialized activities that translate into:

Determining realistic,practical capacity measurements is a(n):

How Management Accounting Information Supports Decision Making

The Balanced Scorecard and Strategy Map

Using Costs in Decision Making

Accumulating and Assigning Costs to Products

Measuring and Managing Customer Relationships

Measuring and Managing Process Performance

Measuring and Managing Life-Cycle Costs

Behavioral and Organizational Issues in Management Accounting and Control Systems

Using Budgets for Planning and Coordination

Financial Control

Filters

Exam 5: Activity-Based Cost Systems

An activity-based costing system is necessary for costing services that are different.

Traditional cost systems are likely to overcost simple products with higher production volume.

The focus of ABC systems is on:

All of the following situations cause major deterrents to effective ABC implementation EXCEPT when:

Discuss the advantages of a time-based ABC system.

Activity based pricing prices products,not orders.

Activity-based cost systems use cost centers to accumulate costs.

Webster Company provides the following ABC A B C ABC costing information: The above activities are used by Departments A A A and B B B as follows: -How much of the account billing costs will be assigned to Department B?

Activity-based costing (ABC)can eliminate cost distortions because ABC:

Which of the following is a sign that an ABC system may be useful?

A time-driven ABC system:

Product lines that produce different variations (models,styles,or colors)often require specialized activities that translate into:

Determining realistic,practical capacity measurements is a(n):

How Management Accounting Information Supports Decision Making

The Balanced Scorecard and Strategy Map

Using Costs in Decision Making

Accumulating and Assigning Costs to Products

Measuring and Managing Customer Relationships

Measuring and Managing Process Performance

Measuring and Managing Life-Cycle Costs

Behavioral and Organizational Issues in Management Accounting and Control Systems

Using Budgets for Planning and Coordination

Financial Control

Filters

Webster Company provides the following $A B C$ costing information: The above activities are used by Departments $A$ and $B$ as follows: -How much of the account billing costs will be assigned to Department B?