Question 1

An adaptation of ABC costing that simplifies ABC by assigning resource costs directly to cost objects is called:

Accepted Answer

A) Activity analysis. 
B) Multistage ABC. 
C) Time-Driven ABC. 
D) Resource Consumption Accounting. 
E) Customer profitability analysis. 
A) Activity analysis. 
B) Multistage ABC. 
C) Time-Driven ABC. 
D) Resource Consumption Accounting. 
E) Customer profitability analysis.

Question 2

The cost of sales visits is a:

Accepted Answer

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

Question 3

Using activity-based costing, applied miscellaneous factory overhead for the baseball cleat order based on direct labor hours is:

Accepted Answer

A) $8,745. 
B) $10,312. 
C) $10,489. 
D) $9,912. 
E) $8,456. 
A) $8,745. 
B) $10,312. 
C) $10,489. 
D) $9,912. 
E) $8,456.

Question 4

What is the overhead application rate using the firm's volume-based costing system (rounded to the nearest percent or cents)?

Accepted Answer

A) 350 percent of direct labor cost. 
B) $51.89 per direct labor-hour. 
C) 68 per cent of direct labor cost. 
D) 5,189 percent of direct labor cost. 
E) 5,110 percent of direct labor cost. 
A) 350 percent of direct labor cost. 
B) $51.89 per direct labor-hour. 
C) 68 per cent of direct labor cost. 
D) 5,189 percent of direct labor cost. 
E) 5,110 percent of direct labor cost.

Question 5

If a volume-based costing system based on direct labor hours to assign overhead is used, the total overhead cost for Product X will be:

Accepted Answer

A) $1,500. 
B) $1,560. 
C) $2,000. 
D) $2,400. 
E) $2,560. 
A) $1,500. 
B) $1,560. 
C) $2,000. 
D) $2,400. 
E) $2,560.

Question 6

Using ABC, overhead cost assigned to Job #971 for inspections 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 7

Successful activity-based costing (ABC) implementation depends upon the firm:

Accepted Answer

A) Having support of consultants with needed expertise. 
B) Having a thorough activity analysis. 
C) Starting with a relatively simple system. 
D) Having well-trained managers. 
E) Having adequate computer resources. 
A) Having support of consultants with needed expertise. 
B) Having a thorough activity analysis. 
C) Starting with a relatively simple system. 
D) Having well-trained managers. 
E) Having adequate computer resources.

Question 8

In an organization that makes furniture, which of the following is a high value-added activity?

Accepted Answer

A) Using direct materials in production. 
B) Inspecting production. 
C) Storing finished goods inventory. 
D) Moving work-in-process inventory between work stations. 
E) Reworking the product to repair defects. 
A) Using direct materials in production. 
B) Inspecting production. 
C) Storing finished goods inventory. 
D) Moving work-in-process inventory between work stations. 
E) Reworking the product to repair defects.

Question 9

Two students in a cost accounting class were arguing about the need to gather good unit cost information for manufacturing. One student, Travis, maintained that a firm producing and selling large quantities of relatively few products would have no need for an ABC system, since an ABC system is usually more expensive to implement than a volume-based system. Alicia countered that even firms with high-volume homogeneous products could benefit from a cost management technique like activity-based costing (ABC).
Required: Choose sides in this discussion and present justifications for your choice.

Accepted Answer

Answer may vary
Feedback: ABC is most us

Question 10

Engineering change orders, equipment maintenance, and product development costs are examples of:

Accepted Answer

A) Unit costs. 
B) Batch costs. 
C) Product-level costs. 
D) Facility-level costs. 
E) Unit, batch, and customer-sustaining costs, respectively. 
A) Unit costs. 
B) Batch costs. 
C) Product-level costs. 
D) Facility-level costs. 
E) Unit, batch, and customer-sustaining costs, respectively.

Question 11

Using ABC, how much machine setup overhead is assigned to the order?

Accepted Answer

A) $19,200. 
B) $8,000. 
C) $11,108. 
D) $9,960. 
E) $7,272. 
A) $19,200. 
B) $8,000. 
C) $11,108. 
D) $9,960. 
E) $7,272.

Question 12

What is Nerrod's total customer unit-level cost applicable to XBT as a customer?

Accepted Answer

A) $50. 
B) $480. 
C) $4,120. 
D) $4,125. 
E) $6,300. 
A) $50. 
B) $480. 
C) $4,120. 
D) $4,125. 
E) $6,300.

Question 13

What is the total overhead cost per unit of the laser printers order using activity-based costing (rounded to the nearest cent)?

Accepted Answer

A) $39.55. 
B) $40.05. 
C) $42.25. 
D) $50.65. 
E) $58.30. 
A) $39.55. 
B) $40.05. 
C) $42.25. 
D) $50.65. 
E) $58.30.

Question 14

Which of the following activities is a facility-level activity?

Accepted Answer

A) Materials handling. 
B) Plant maintenance. 
C) Product inspection. 
D) Design engineering. 
E) Purchase orders. 
A) Materials handling. 
B) Plant maintenance. 
C) Product inspection. 
D) Design engineering. 
E) Purchase orders.

Question 15

Plant overhead for ABC Corp in $150 million per year, a portion of which (20%) is attributable to inspection costs which are charged to products on the basis the number of parts in the products. The plant produces 500,000 units per year, and on the average, each product has 20 parts.
Required: What is the average inspection cost in a product? What is the inspection cost for a product with 50 parts?

Accepted Answer

Answer may vary
Feedback: $150 million ×

Question 16

Processing sales returns and allowances is usually classified as 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 17

Customer profitability analysis:

Accepted Answer

A) Always shows that the company with the highest total sales generates the highest net customer profit. 
B) Always shows that the company with the lowest total sales generates the lowest net customer profit. 
C) Produces the same results as a Pareto analysis. 
D) Helps identify actions that affect customer profitability. 
E) None of the above answers is correct. 
A) Always shows that the company with the highest total sales generates the highest net customer profit. 
B) Always shows that the company with the lowest total sales generates the lowest net customer profit. 
C) Produces the same results as a Pareto analysis. 
D) Helps identify actions that affect customer profitability. 
E) None of the above answers is correct.

Question 18

Which of the following would likely be the most appropriate cost driver of electric power used by machines?

Accepted Answer

A) Number of units. 
B) Machine size. 
C) Number of machine hours. 
D) Number of production runs. 
E) Purchase cost of machines. 
A) Number of units. 
B) Machine size. 
C) Number of machine hours. 
D) Number of production runs. 
E) Purchase cost of machines.

Question 19

Using activity-based costing, applied quality control factory overhead for the Great P model per unit is (rounded to the nearest cent):

Accepted Answer

A) $4.60. 
B) $9.45. 
C) $13.44. 
D) $15.12. 
E) $42.61. 
A) $4.60. 
B) $9.45. 
C) $13.44. 
D) $15.12. 
E) $42.61.

Question 20

The examination of the efficiency of each of a firm's activities is:

Accepted Answer

A) Activity analysis. 
B) Pareto analysis. 
C) Activity-based management. 
D) Performance measurement. 
E) Attribute-based management. 
A) Activity analysis. 
B) Pareto analysis. 
C) Activity-based management. 
D) Performance measurement. 
E) Attribute-based management.

An adaptation of ABC costing that simplifies ABC by assigning resource costs directly to cost objects is called:

The cost of sales visits is a:

Using activity-based costing, applied miscellaneous factory overhead for the baseball cleat order based on direct labor hours is:

What is the overhead application rate using the firm's volume-based costing system (rounded to the nearest percent or cents)?

If a volume-based costing system based on direct labor hours to assign overhead is used, the total overhead cost for Product X will be:

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

Successful activity-based costing (ABC) implementation depends upon the firm:

In an organization that makes furniture, which of the following is a high value-added activity?

Engineering change orders, equipment maintenance, and product development costs are examples of:

Using ABC, how much machine setup overhead is assigned to the order?

What is Nerrod's total customer unit-level cost applicable to XBT as a customer?

What is the total overhead cost per unit of the laser printers order using activity-based costing (rounded to the nearest cent)?

Which of the following activities is a facility-level activity?

Processing sales returns and allowances is usually classified as a:

Customer profitability analysis:

Which of the following would likely be the most appropriate cost driver of electric power used by machines?

Using activity-based costing, applied quality control factory overhead for the Great P model per unit is (rounded to the nearest cent):

The examination of the efficiency of each of a firm's activities is:

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

An adaptation of ABC costing that simplifies ABC by assigning resource costs directly to cost objects is called:

The cost of sales visits is a:

Using activity-based costing, applied miscellaneous factory overhead for the baseball cleat order based on direct labor hours is:

What is the overhead application rate using the firm's volume-based costing system (rounded to the nearest percent or cents)?

If a volume-based costing system based on direct labor hours to assign overhead is used, the total overhead cost for Product X will be:

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

Successful activity-based costing (ABC) implementation depends upon the firm:

In an organization that makes furniture, which of the following is a high value-added activity?

Engineering change orders, equipment maintenance, and product development costs are examples of:

Using ABC, how much machine setup overhead is assigned to the order?

What is Nerrod's total customer unit-level cost applicable to XBT as a customer?

What is the total overhead cost per unit of the laser printers order using activity-based costing (rounded to the nearest cent)?

Which of the following activities is a facility-level activity?

Processing sales returns and allowances is usually classified as a:

Customer profitability analysis:

Which of the following would likely be the most appropriate cost driver of electric power used by machines?

Using activity-based costing, applied quality control factory overhead for the Great P model per unit is (rounded to the nearest cent):

The examination of the efficiency of each of a firm's activities is:

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