Question 1

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 2

Procurement costs such as costs of placing orders for materials and paying suppliers are usually classified as:

Accepted Answer

A) Output-unit-level costs. 
B) Batch-level costs. 
C) Product-level costs. 
D) Facility-level costs. 
E) Vendor costs. 
A) Output-unit-level costs. 
B) Batch-level costs. 
C) Product-level costs. 
D) Facility-level costs. 
E) Vendor costs.

Question 3

Customer Profitability Analysis Spring Company collected the following data pertaining to its activities with selected customers.

Accepted Answer

@#IMG-DLM& 
Spring Company mails monthly statement

Question 4

Castenet Company uses a volume-based costing system that applies overhead cost based on direct labor hours at $250 per direct labor hour.
The company is considering adopting an activity-based costing system with the following data:   
The two jobs processed in the month of June had the following characteristics:   
Required:
(1)Compute the unit manufacturing costs of each job under the firm's current volume-based costing system.
(2)Compute the unit manufacturing costs of each job under the activity-based costing system.
(3)(a)Compare the unit manufacturing costs for Jobs A and B computed in requirements 1 and 2.
Why do the two cost systems differ in their total cost for each job?
(b)Why might these differences be important to the Company?

Accepted Answer

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Question 5

All of the following statements regarding activity-based costing systems are true except they:

Accepted Answer

A) Can provide more accurate product costs. 
B) Identify more costs as indirect costs than do traditional volume-based systems. 
C) Are likely to be more time-consuming than volume-based systems. 
D) Are used in both manufacturing and non-manufacturing companies. 
E) Are likely to have more overhead rates than volume-based systems. 
A) Can provide more accurate product costs. 
B) Identify more costs as indirect costs than do traditional volume-based systems. 
C) Are likely to be more time-consuming than volume-based systems. 
D) Are used in both manufacturing and non-manufacturing companies. 
E) Are likely to have more overhead rates than volume-based systems.

Question 6

Activity-based costing (ABC)differs from other costing approaches in its:

Accepted Answer

A) Incorporating customer needs. 
B) Complexity in implementation. 
C) Focus on operational excellence. 
D) Use of cost objects. 
E) Recognition of the causal relationship. 
A) Incorporating customer needs. 
B) Complexity in implementation. 
C) Focus on operational excellence. 
D) Use of cost objects. 
E) Recognition of the causal relationship.

Question 7

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:  
What is the total overhead cost per unit of the laser printer 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 8

In regard to selling activities,which one of the following would be a cost driver for selling expense?

Accepted Answer

A) Number of invoices. 
B) Number of sales calls. 
C) Number of production runs. 
D) Number of shipments. 
A) Number of invoices. 
B) Number of sales calls. 
C) Number of production runs. 
D) Number of shipments.

Question 9

Activity-based costing for manufacturing operations is used to assign:

Accepted Answer

A) Direct material and direct labor costs to products. 
B) Direct labor and manufacturing overhead costs to products. 
C) Manufacturing overhead costs to products. 
D) Selling and general administrative overhead costs to products. 
E) Selling and general administrative overhead and manufacturing overhead costs to products. 
A) Direct material and direct labor costs to products. 
B) Direct labor and manufacturing overhead costs to products. 
C) Manufacturing overhead costs to products. 
D) Selling and general administrative overhead costs to products. 
E) Selling and general administrative overhead and manufacturing overhead costs to products.

Question 10

Moss Manufacturing has just completed a major change in its quality control (QC)process.Previously,products had been reviewed by QC inspectors at the end of each major process,and the company's ten QC inspectors were charged as direct labor to the operation or job.In an effort to improve efficiency and quality,a computerized video QC system was purchased for $250,000.The system consists of a minicomputer,15 video cameras,other peripheral hardware,and software.
The new system used cameras stationed by QC engineers at key points in the production process.Each time an operation changes or there is a new operation,the cameras are moved,and a new master picture is loaded into the computer by a QC engineer.The camera takes pictures of the units in process,and the computer compares them to the picture of a "good" unit.Any differences are sent to a QC engineer who removes the bad units and discusses the flaws with the production supervisors.The new system has replaced the ten QC inspectors with two QC engineers.
The operating costs of the new QC system,including the salaries of the QC engineers,have been included as factory overhead in calculating the company's volume-based factory overhead rate which is based on direct labor dollars.
The company's president is confused.His vice president of production has told him how efficient the new system is,yet there is a large increase in the factory overhead rate.The computation of the rate before and after automation is shown below.

Accepted Answer

@#IMG-DLM& 
"Three hundred percent,"lamented the p

Question 11

National Inc.manufactures two models of CMD that can be used as cell phones,MPX,and digital camcorders.  
National uses a volume-based costing system to apply factory overhead based on direct labor dollars.The unit prime costs of each product were as follows:  
National's controller had been researching activity-based costing and decided to switch to it.A special study determined National's two products have the following budgeted activities:  
Using activity-based costing,applied machinery overhead for the High F model per unit is (rounded to the nearest cent):

Accepted Answer

A) $6.13. 
B) $11.86. 
C) $16.28. 
D) $32.46. 
E) $66.73. 
A) $6.13. 
B) $11.86. 
C) $16.28. 
D) $32.46. 
E) $66.73.

Question 12

Skateline Inc.designs and manufactures roller skates.The following data pertain to two of its major customers: FantasticSkates and SkateToday.

Accepted Answer

@#IMG-DLM& 
Required:Compare the net pro

Question 13

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,the materials handling overhead cost assigned to Job #971 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 14

Customer lifetime value is a type of analysis used to:

Accepted Answer

A) Assess the ethical practices of each salesperson-customer relationship. 
B) Assess the current profit potential of a customer. 
C) Assess the long term profit potential of a customer. 
D) Assess the current profit potential of all the firm's customers. 
E) Assess the long term profit potential of all the firm's customers. 
A) Assess the ethical practices of each salesperson-customer relationship. 
B) Assess the current profit potential of a customer. 
C) Assess the long term profit potential of a customer. 
D) Assess the current profit potential of all the firm's customers. 
E) Assess the long term profit potential of all the firm's customers.

Question 15

National Inc.manufactures two models of CMD that can be used as cell phones,MPX,and digital camcorders.  
National uses a volume-based costing system to apply factory overhead based on direct labor dollars.The unit prime costs of each product were as follows:  
National's controller had been researching activity-based costing and decided to switch to it.A special study determined National's two products have the following budgeted activities:  
Using activity-based costing,total overhead per unit of Great P model is (rounded to the nearest cent):

Accepted Answer

A) $42.61. 
B) $45.99. 
C) $61.32. 
D) $66.73. 
E) $168.00. 
A) $42.61. 
B) $45.99. 
C) $61.32. 
D) $66.73. 
E) $168.00.

Question 16

Which of the following is a batch-level cost driver?

Accepted Answer

A) Output units. 
B) Number of employees. 
C) Number of orders. 
D) Number of parts. 
E) Machine hours. 
A) Output units. 
B) Number of employees. 
C) Number of orders. 
D) Number of parts. 
E) Machine hours.

Question 17

The cost of unused capacity can be determined using ABC costing for the purpose of:

Accepted Answer

A) Determining more accurately the ABC costs. 
B) Helping managers plan the short and longer-term use of the operating resources. 
C) Determining product profitability. 
D) Completing an effective activity analysis. 
A) Determining more accurately the ABC costs. 
B) Helping managers plan the short and longer-term use of the operating resources. 
C) Determining product profitability. 
D) Completing an effective activity analysis.

Question 18

The management of activities to improve the value received by the customer and the competitiveness of the organization is:

Accepted Answer

A) Cost driver analysis. 
B) Customer profitability analysis. 
C) Activity-based management. 
D) Performance measurement. 
E) Activity analysis. 
A) Cost driver analysis. 
B) Customer profitability analysis. 
C) Activity-based management. 
D) Performance measurement. 
E) Activity analysis.

Question 19

A company using a volume-based overhead assignment (allocation)method will tend to:

Accepted Answer

A) Overstate the cost of low volume products. 
B) Understate the cost of low volume products. 
C) Understate the cost of high volume products. 
D) Understate the cost of all products. 
E) Either understate or overstate the cost of high volume products depending on the specific manufacturing factors involved. 
A) Overstate the cost of low volume products. 
B) Understate the cost of low volume products. 
C) Understate the cost of high volume products. 
D) Understate the cost of all products. 
E) Either understate or overstate the cost of high volume products depending on the specific manufacturing factors involved.

Question 20

The common element among the firms Nike,GM,and Lego Group is:

Accepted Answer

A) All these firms use ABC. 
B) Each of the firms has addressed critical problems regarding complexity in its product offerings. 
C) Each of the firms has used a consultant and an ERP to implement ABC. 
D) All of these firms,once users of ABC,have now chosen not to use ABC costing. 
E) Each of the firms has addressed critical problems involving the cost and use of capacity. 
A) All these firms use ABC. 
B) Each of the firms has addressed critical problems regarding complexity in its product offerings. 
C) Each of the firms has used a consultant and an ERP to implement ABC. 
D) All of these firms,once users of ABC,have now chosen not to use ABC costing. 
E) Each of the firms has addressed critical problems involving the cost and use of capacity.

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

Procurement costs such as costs of placing orders for materials and paying suppliers are usually classified as:

Customer Profitability Analysis Spring Company collected the following data pertaining to its activities with selected customers.

All of the following statements regarding activity-based costing systems are true except they:

Activity-based costing (ABC)differs from other costing approaches in its:

In regard to selling activities,which one of the following would be a cost driver for selling expense?

Activity-based costing for manufacturing operations is used to assign:

Skateline Inc.designs and manufactures roller skates.The following data pertain to two of its major customers: FantasticSkates and SkateToday.

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,the materials handling overhead cost assigned to Job #971 is:

Customer lifetime value is a type of analysis used to:

Which of the following is a batch-level cost driver?

The cost of unused capacity can be determined using ABC costing for the purpose of:

The management of activities to improve the value received by the customer and the competitiveness of the organization is:

A company using a volume-based overhead assignment (allocation)method will tend to:

The common element among the firms Nike,GM,and Lego Group is:

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

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

Procurement costs such as costs of placing orders for materials and paying suppliers are usually classified as:

Customer Profitability Analysis Spring Company collected the following data pertaining to its activities with selected customers.

All of the following statements regarding activity-based costing systems are true except they:

Activity-based costing (ABC)differs from other costing approaches in its:

In regard to selling activities,which one of the following would be a cost driver for selling expense?

Activity-based costing for manufacturing operations is used to assign:

Skateline Inc.designs and manufactures roller skates.The following data pertain to two of its major customers: FantasticSkates and SkateToday.

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,the materials handling overhead cost assigned to Job #971 is:

Customer lifetime value is a type of analysis used to:

Which of the following is a batch-level cost driver?

The cost of unused capacity can be determined using ABC costing for the purpose of:

The management of activities to improve the value received by the customer and the competitiveness of the organization is:

A company using a volume-based overhead assignment (allocation)method will tend to:

The common element among the firms Nike,GM,and Lego Group is:

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