Question 1

Using the firm's volume-based costing, applied factory overhead per unit for the High F model is (rounded to the nearest cent):

Accepted Answer

A) $61.32. 
B) $65.43. 
C) $43.42. 
D) $45.99. 
E) $54.04. 
A) $61.32. 
B) $65.43. 
C) $43.42. 
D) $45.99. 
E) $54.04.

Question 2

What is the activity-based overhead rate per purchase order?

Accepted Answer

A) $615. 
B) $600. 
C) $575. 
D) $550. 
E) $500. 
A) $615. 
B) $600. 
C) $575. 
D) $550. 
E) $500.

Question 3

Using ABC, overhead cost assigned to Job #971 for machine setup is:

Accepted Answer

A) $2,300. 
B) $990. 
C) $6,500. 
D) $690. 
E) $1,020. 
A) $2,300. 
B) $990. 
C) $6,500. 
D) $690. 
E) $1,020.

Question 4

Overhead costs are allocated to cost objects in an activity-based costing system in the following manner:

Accepted Answer

A) Overhead costs are traced to departments, then costs are traced to products. 
B) Overhead costs are traced to activities, then costs are traced to products. 
C) Overhead costs are traced to activities, then costs are traced to departments and then allocated to products. 
D) Overhead costs are traced from resources to cost objects. 
E) None of the above. 
A) Overhead costs are traced to departments, then costs are traced to products. 
B) Overhead costs are traced to activities, then costs are traced to products. 
C) Overhead costs are traced to activities, then costs are traced to departments and then allocated to products. 
D) Overhead costs are traced from resources to cost objects. 
E) None of the above.

Question 5

The costs of operating a regional warehouse is an example of a:

Accepted Answer

A) Customer unit-level cost. 
B) Customer batch-level cost. 
C) Customer-sustaining cost. 
D) Distribution-channel cost. 
E) Sales-level cost. 
A) Customer unit-level cost. 
B) Customer batch-level cost. 
C) Customer-sustaining cost. 
D) Distribution-channel cost. 
E) Sales-level cost.

Question 6

Which one of the following is not a unit-level cost driver?

Accepted Answer

A) Direct labor hours. 
B) Direct material dollars. 
C) Machine hours. 
D) Production orders. 
E) None of the above. 
A) Direct labor hours. 
B) Direct material dollars. 
C) Machine hours. 
D) Production orders. 
E) None of the above.

Question 7

Volume-based rates produce inaccurate product cost when:

Accepted Answer

A) A large share of factory overhead cost is not volume-based. 
B) Firms produce a diverse mix of products. 
C) Large volumes of a product are manufactured. 
D) Both answer A and answer B are correct. 
E) None of the answers above is correct. 
A) A large share of factory overhead cost is not volume-based. 
B) Firms produce a diverse mix of products. 
C) Large volumes of a product are manufactured. 
D) Both answer A and answer B are correct. 
E) None of the answers above is correct.

Question 8

Certo Health Products was formed two years ago to produce and distribute a newly-patented protein supplement. Two variations of the original supplement have since been developed and introduced for general sale. The three products are processed in essentially the same way, but Ann Marshall, the owner of Certo, anticipates that a half-dozen new products will be developed for sale in the next two years. These products will not be variations of the patented supplement, and will require a different production process other than the one currently used. Ann has asked you to review the current use of a single volume-based rate and explain the arguments for using departmental rates with activity-based drivers.

Accepted Answer

Answer may vary
Feedback: A single volum

Question 9

Volume-based overhead rates may cause undesirable strategic effects such as:

Accepted Answer

A) Incorrect decisions. 
B) Unprofitable cross-subsidization of products. 
C) Ineffective management of operations for process improvement. 
D) Answers A, B and C are all correct. 
E) None of the answers above is correct. 
A) Incorrect decisions. 
B) Unprofitable cross-subsidization of products. 
C) Ineffective management of operations for process improvement. 
D) Answers A, B and C are all correct. 
E) None of the answers above is correct.

Question 10

The general sales manager's salary is an example of a:

Accepted Answer

A) Customer unit-level cost. 
B) Customer batch-level cost. 
C) Customer-sustaining cost. 
D) Distribution-channel cost. 
E) Sales-level cost. 
A) Customer unit-level cost. 
B) Customer batch-level cost. 
C) Customer-sustaining cost. 
D) Distribution-channel cost. 
E) Sales-level cost.

Question 11

Which of the following cost pools are used to classify costs under activity-based costing?

Accepted Answer

A) Option A 
B) Option B 
C) Option C 
D) Option D 
E) Option E 
A) Option A 
B) Option B 
C) Option C 
D) Option D 
E) Option E

Question 12

Important concepts in resource consumption accounting include all of the following except:

Accepted Answer

A) Variable costing. 
B) Resource interrelationships. 
C) Activity interrelationships. 
D) Detail level cost information. 
E) Treatment of idle capacity. 
A) Variable costing. 
B) Resource interrelationships. 
C) Activity interrelationships. 
D) Detail level cost information. 
E) Treatment of idle capacity.

Question 13

In an activity-based costing system, overhead costs are divided into separate:

Accepted Answer

A) Cost objects. 
B) Activity cost pools. 
C) Resource consumption and activity consumption cost drivers. 
D) Product-line cost pools. 
E) Plantwide or departmental cost pools. 
A) Cost objects. 
B) Activity cost pools. 
C) Resource consumption and activity consumption cost drivers. 
D) Product-line cost pools. 
E) Plantwide or departmental cost pools.

Question 14

Blackwelder Co. manufactures a variety of electric razors used by both men and women. The company's plant is partially automated. The company uses an activity-based cost system. Listed below is cost driver information used in the product-costing system:   Two current product orders had the following requirements:   Required:
1. Using ABC costing, how much overhead is assigned to the order for men's razors?
2. Using ABC costing, how much overhead is assigned to the order for women's razors?

Accepted Answer

1. $12,082

Question 15

What is Nerrod's total customer batch-level cost applicable to Ninto?

Accepted Answer

A) $800. 
B) $920. 
C) $2,300. 
D) $2,420. 
E) $6,300. 
A) $800. 
B) $920. 
C) $2,300. 
D) $2,420. 
E) $6,300.

Question 16

If Activity X had a budgeted cost of $125,000 and a budgeted activity consumption of 10,000 engineering hours, what would the activity consumption rate be?

Accepted Answer

A) $10 per hour. 
B) $12.50 per hour. 
C) $0.08 per hour. 
D) 0.10 per hour. 
A) $10 per hour. 
B) $12.50 per hour. 
C) $0.08 per hour. 
D) 0.10 per hour.

Question 17

Which of the following activity cost pools would most likely be allocated based on the number of production runs?

Accepted Answer

A) Machinery set-up costs. 
B) Raw materials warehousing costs. 
C) Factory heating costs. 
D) Factory janitorial costs. 
E) Indirect labor costs. 
A) Machinery set-up costs. 
B) Raw materials warehousing costs. 
C) Factory heating costs. 
D) Factory janitorial costs. 
E) Indirect labor costs.

Question 18

Purchase order, set-up, and inspection costs are examples of:

Accepted Answer

A) Unit-level costs. 
B) Batch-level costs. 
C) Product-level costs. 
D) Facility-level costs. 
E) Department-level costs. 
A) Unit-level costs. 
B) Batch-level costs. 
C) Product-level costs. 
D) Facility-level costs. 
E) Department-level costs.

Question 19

Activity-based costing systems:

Accepted Answer

A) Accumulate overhead costs by departments. 
B) Are less complex and therefore less costly than volume-based systems. 
C) Can be used in manufacturing firms only. 
D) Have separate overhead rates for each activity. 
E) Eliminate multiple-stage cost allocation. 
A) Accumulate overhead costs by departments. 
B) Are less complex and therefore less costly than volume-based systems. 
C) Can be used in manufacturing firms only. 
D) Have separate overhead rates for each activity. 
E) Eliminate multiple-stage cost allocation.

Question 20

If the usage of project activities is not proportional to the number of units produced, then some managers will be overcharged and others undercharged under the:

Accepted Answer

A) Activity-based costing 
B) Volume-based costing 
C) Overhead costing 
D) Process costing 
A) Activity-based costing 
B) Volume-based costing 
C) Overhead costing 
D) Process costing

Using the firm's volume-based costing, applied factory overhead per unit for the High F model is (rounded to the nearest cent):

What is the activity-based overhead rate per purchase order?

Using ABC, overhead cost assigned to Job #971 for machine setup is:

Overhead costs are allocated to cost objects in an activity-based costing system in the following manner:

The costs of operating a regional warehouse is an example of a:

Which one of the following is not a unit-level cost driver?

Volume-based rates produce inaccurate product cost when:

Volume-based overhead rates may cause undesirable strategic effects such as:

The general sales manager's salary is an example of a:

Which of the following cost pools are used to classify costs under activity-based costing?

Important concepts in resource consumption accounting include all of the following except:

In an activity-based costing system, overhead costs are divided into separate:

What is Nerrod's total customer batch-level cost applicable to Ninto?

If Activity X had a budgeted cost of $125,000 and a budgeted activity consumption of 10,000 engineering hours, what would the activity consumption rate be?

Which of the following activity cost pools would most likely be allocated based on the number of production runs?

Purchase order, set-up, and inspection costs are examples of:

Activity-based costing systems:

If the usage of project activities is not proportional to the number of units produced, then some managers will be overcharged and others undercharged under the:

Short-Term Profit Planning: Cost-Volume-Profit CVP Analysis

Implementing Strategy: The Value Chain, the Balanced Scorecard, and the Strategy Map

Basic Cost Management Concepts

Job Costing

Process Costing

Cost Allocation: Departments, Joint Products, and By-Products

Cost Estimation

Short-Term Profit Planning: Cost-Volume-Profit Cvp Analysis

Strategy and the Master Budget

Decision Making With a Strategic Emphasis

Strategy and the Analysis of Capital Investments

Cost Planning for the Product Life Cycle: Target Costing, Theory of Constraints, and Strategic Pricing

Operational Performance Measurement: Sales, Direct-Cost Variances, and the Role of Nonfinancial Performance Measures

Operational Performance Measurement: Indirect-Cost Variances and Resource-Capacity Management

Operational Performance Measurement: Further Analysis of Productivity and Sales

The Management and Control of Quality

Strategic Performance Measurement: Cost Centers, Profit Centers, and the Balanced Scorecard

Strategic Performance Measurement: Investment Centers and Transfer Pricing

Management Compensation, Business Analysis, and Business Valuation

Filters

Exam 5: Activity-Based Costing and Customer Profitability Analysis

Using the firm's volume-based costing, applied factory overhead per unit for the High F model is (rounded to the nearest cent):

What is the activity-based overhead rate per purchase order?

Using ABC, overhead cost assigned to Job #971 for machine setup is:

Overhead costs are allocated to cost objects in an activity-based costing system in the following manner:

The costs of operating a regional warehouse is an example of a:

Which one of the following is not a unit-level cost driver?

Volume-based rates produce inaccurate product cost when:

Volume-based overhead rates may cause undesirable strategic effects such as:

The general sales manager's salary is an example of a:

Which of the following cost pools are used to classify costs under activity-based costing?

Important concepts in resource consumption accounting include all of the following except:

In an activity-based costing system, overhead costs are divided into separate:

What is Nerrod's total customer batch-level cost applicable to Ninto?

If Activity X had a budgeted cost of $125,000 and a budgeted activity consumption of 10,000 engineering hours, what would the activity consumption rate be?

Which of the following activity cost pools would most likely be allocated based on the number of production runs?

Purchase order, set-up, and inspection costs are examples of:

Activity-based costing systems:

If the usage of project activities is not proportional to the number of units produced, then some managers will be overcharged and others undercharged under the:

Short-Term Profit Planning: Cost-Volume-Profit CVP Analysis

Implementing Strategy: The Value Chain, the Balanced Scorecard, and the Strategy Map

Basic Cost Management Concepts

Job Costing

Process Costing

Cost Allocation: Departments, Joint Products, and By-Products

Cost Estimation

Short-Term Profit Planning: Cost-Volume-Profit Cvp Analysis

Strategy and the Master Budget

Decision Making With a Strategic Emphasis

Strategy and the Analysis of Capital Investments

Cost Planning for the Product Life Cycle: Target Costing, Theory of Constraints, and Strategic Pricing

Operational Performance Measurement: Sales, Direct-Cost Variances, and the Role of Nonfinancial Performance Measures

Operational Performance Measurement: Indirect-Cost Variances and Resource-Capacity Management

Operational Performance Measurement: Further Analysis of Productivity and Sales

The Management and Control of Quality

Strategic Performance Measurement: Cost Centers, Profit Centers, and the Balanced Scorecard

Strategic Performance Measurement: Investment Centers and Transfer Pricing

Management Compensation, Business Analysis, and Business Valuation

Filters