Question 1

An activity that is performed for each unit of production is a(n):

Accepted Answer

A) Product-level activity. 
B) Facility-level activity. 
C) Unit-level activity. 
D) Performance-level activity. 
E) Batch-level activity. 
A) Product-level activity. 
B) Facility-level activity. 
C) Unit-level activity. 
D) Performance-level activity. 
E) Batch-level activity. C

Question 2

Cost to process monthly statements 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. C

Question 3

Sheen Co.manufacturers laser printers.It has outlined the following overhead cost drivers:  
Sheen Co.has an order for 1,000 laser printers that has the following production requirements:  
Using activity-based costing,applied miscellaneous factory overhead for the 1000 laser printer order based on direct labor hours is:

Accepted Answer

A) $7,800. 
B) $10,000. 
C) $10,500. 
D) $150. 
E) $21,600. 
A) $7,800. 
B) $10,000. 
C) $10,500. 
D) $150. 
E) $21,600. A

Question 4

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 5

Time-driven ABC provides a direct way to measure:

Accepted Answer

A) Production efficiency 
B) Unused capacity 
C) Product line profitability 
D) Value adding activities 
E) Customer value 
A) Production efficiency 
B) Unused capacity 
C) Product line profitability 
D) Value adding activities 
E) Customer value

Question 6

Wings Co.budgeted $555,600 manufacturing direct wages,2,315 direct labor hours and had the following manufacturing overhead:  
Requirements for Job #971 which manufactured 4 units of product:  
If Wings uses a volume-based overhead rate based on direct labor hours,the manufacturing overhead for Job #971 is:

Accepted Answer

A) $990. 
B) $1,020. 
C) $1,600. 
D) $3,460. 
E) $6,400. 
A) $990. 
B) $1,020. 
C) $1,600. 
D) $3,460. 
E) $6,400.

Question 7

Wings Co.budgeted $555,600 manufacturing direct wages,2,315 direct labor hours and had the following manufacturing overhead:  
Requirements for Job #971 which manufactured 4 units of product:  
Using ABC,overhead cost assigned to Job #971 for machine repair 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 8

Invoicing cost 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 9

Wings Co.budgeted $555,600 manufacturing direct wages,2,315 direct labor hours,and had the following manufacturing overhead:  
Requirements for Job #971 which manufactured 4 units of product:  
The total overhead of Job #971 under the ABC costing is:

Accepted Answer

A) $95. 
B) $380. 
C) $1,520. 
D) $2,300. 
E) $9,200. 
A) $95. 
B) $380. 
C) $1,520. 
D) $2,300. 
E) $9,200.

Question 10

Which one of the following is a high value-added activity?

Accepted Answer

A) Set up. 
B) Rework. 
C) Repair. 
D) Storage. 
E) Processing. 
A) Set up. 
B) Rework. 
C) Repair. 
D) Storage. 
E) Processing.

Question 11

The major limitation of volume-based costing systems is the use of volume-based:

Accepted Answer

A) Criteria. 
B) Standards. 
C) Rates. 
D) Variances. 
E) Restrictions. 
A) Criteria. 
B) Standards. 
C) Rates. 
D) Variances. 
E) Restrictions.

Question 12

Diamond Cleats Co.manufactures cleats for baseball shoes.It has outlined the following overhead cost drivers:  
Diamond Cleats Co.has an order for cleats that has the following production requirements:  
Using activity-based costing,applied machine overhead for the baseball cleat order is:

Accepted Answer

A) $47,800. 
B) $55,300. 
C) $40,500. 
D) $59,150. 
E) $51,700. 
A) $47,800. 
B) $55,300. 
C) $40,500. 
D) $59,150. 
E) $51,700.

Question 13

Multistage ABC is used when:

Accepted Answer

A) There are many departments in the organization. 
B) Management wants a higher level of accuracy from the ABC calculations. 
C) There are complex relationships among the activities. 
D) To simplify the ABC calculations. 
E) There is no such thing as Multistage ABC. 
A) There are many departments in the organization. 
B) Management wants a higher level of accuracy from the ABC calculations. 
C) There are complex relationships among the activities. 
D) To simplify the ABC calculations. 
E) There is no such thing as Multistage ABC.

Question 14

Shaver Co.manufactures a variety of electric razors for men and women.The company's plant is partially automated.Listed below is cost driver information used in the product-costing system:  
In addition,Shaver expects to spend $514,368 for 8,037 direct labor-hours.Two current product orders had the following requirements:  
What is the total manufacturing overhead assigned to the current order for Women's Razors if the firm uses a volume-based plantwide overhead rate based on the direct labor dollars?

Accepted Answer

A) $112.50. 
B) $150.00. 
C) $187.50. 
D) $9,600.00. 
E) $12,000.00. 
A) $112.50. 
B) $150.00. 
C) $187.50. 
D) $9,600.00. 
E) $12,000.00.

Question 15

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 16

Sheen Co.manufacturers laser printers.It has outlined the following overhead cost drivers:  
Sheen Co.has an order for 1,000 laser printers that has the following production requirements:  
Using activity-based costing,applied machine repetition overhead for the 1000 laser printer order is:

Accepted Answer

A) $7,800. 
B) $10,000. 
C) $10,500. 
D) $150. 
E) $21,600. 
A) $7,800. 
B) $10,000. 
C) $10,500. 
D) $150. 
E) $21,600.

Question 17

Demski Company has used a two-stage cost allocation system for many years.In the first stage,plant overhead costs are allocated to two production departments,P1 and P2,based on machine hours.In the second stage,Demski uses direct labor hours to assign overhead costs from the production departments to individual products A andB.
Budgeted factory overhead costs for the year are $300,000.Both the budgeted and actual machine hours in P1 and P2 are 12,000 and 28,000 hours,respectively.
After attending a seminar to learn the potential benefits of adopting an activity-based costing system (ABC),Ted Demski,the president of Demski Company,is considering implementing an ABC system.Upon his request,the controller at Demski Company has compiled the following information for analysis:
   Demski manufactures two types of product,A and B,for which the following information is available:
   Required:
(1)Determine the unit cost for each of the two products using the traditional two-stage allocation method.Round calculations to 2 decimal places.
(2)Determine the unit cost for each of the two products using the proposed ABC system.
(3)(a)Compare the unit manufacturing costs for product A and product B computed in requirements 1 and 2.Why do two the cost systems differ in their total cost for each product?
(b)Why might these differences be important to the Demski Company?
Please see Feedback for answers.

Accepted Answer

@#IMG-DLM& 
Demski manufactures two types of produ

Question 18

The controller for Alabama Cooking Oil Co.established the following overhead cost pools and cost drivers:

Accepted Answer

@#IMG-DLM& 
An order of 800 barrels of cooking oil

Question 19

Which of the following has the weakest linkage between activity and cost driver?

Accepted Answer

A) A 
B) B 
C) C 
D) D 
A) A 
B) B 
C) C 
D) D

Question 20

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.

An activity that is performed for each unit of production is a(n):

Cost to process monthly statements is an example of a:

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

Time-driven ABC provides a direct way to measure:

Wings Co.budgeted $555,600 manufacturing direct wages,2,315 direct labor hours and had the following manufacturing overhead: Requirements for Job #971 which manufactured 4 units of product: Using ABC,overhead cost assigned to Job #971 for machine repair is:

Invoicing cost is an example of a:

Wings Co.budgeted $555,600 manufacturing direct wages,2,315 direct labor hours,and had the following manufacturing overhead: Requirements for Job #971 which manufactured 4 units of product: The total overhead of Job #971 under the ABC costing is:

Which one of the following is a high value-added activity?

The major limitation of volume-based costing systems is the use of volume-based:

Diamond Cleats Co.manufactures cleats for baseball shoes.It has outlined the following overhead cost drivers: Diamond Cleats Co.has an order for cleats that has the following production requirements: Using activity-based costing,applied machine overhead for the baseball cleat order is:

Multistage ABC is used when:

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

Sheen Co.manufacturers laser printers.It has outlined the following overhead cost drivers: Sheen Co.has an order for 1,000 laser printers that has the following production requirements: Using activity-based costing,applied machine repetition overhead for the 1000 laser printer order is:

The controller for Alabama Cooking Oil Co.established the following overhead cost pools and cost drivers:

Which of the following has the weakest linkage between activity and cost driver?

Activity-based costing systems:

Cost Management and Strategy

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

Profit Planning: Cost-Volume-Profit 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 and 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

Management Compensation, Business Analysis, and Business Valuation

Filters

Exam 5: Activity-Based Costing and Customer Profitability Analysis

An activity that is performed for each unit of production is a(n):

Cost to process monthly statements is an example of a:

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

Time-driven ABC provides a direct way to measure:

Wings Co.budgeted $555,600 manufacturing direct wages,2,315 direct labor hours and had the following manufacturing overhead: Requirements for Job #971 which manufactured 4 units of product: Using ABC,overhead cost assigned to Job #971 for machine repair is:

Invoicing cost is an example of a:

Wings Co.budgeted $555,600 manufacturing direct wages,2,315 direct labor hours,and had the following manufacturing overhead: Requirements for Job #971 which manufactured 4 units of product: The total overhead of Job #971 under the ABC costing is:

Which one of the following is a high value-added activity?

The major limitation of volume-based costing systems is the use of volume-based:

Diamond Cleats Co.manufactures cleats for baseball shoes.It has outlined the following overhead cost drivers: Diamond Cleats Co.has an order for cleats that has the following production requirements: Using activity-based costing,applied machine overhead for the baseball cleat order is:

Multistage ABC is used when:

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

Sheen Co.manufacturers laser printers.It has outlined the following overhead cost drivers: Sheen Co.has an order for 1,000 laser printers that has the following production requirements: Using activity-based costing,applied machine repetition overhead for the 1000 laser printer order is:

The controller for Alabama Cooking Oil Co.established the following overhead cost pools and cost drivers:

Which of the following has the weakest linkage between activity and cost driver?

Activity-based costing systems:

Cost Management and Strategy

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

Profit Planning: Cost-Volume-Profit 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 and 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

Management Compensation, Business Analysis, and Business Valuation

Filters