Question 1

The amount of time between the development and the production of a product is

Accepted Answer

A) the product life cycle. 
B) lead time. 
C) production time. 
D) value-added time. 
A) the product life cycle. 
B) lead time. 
C) production time. 
D) value-added time.

Question 2

Glassman Company
Glassman Company produces two products: A andB.The company has three overhead functions that are required for both products.
Below is production information for Products A and B:
             Product       Prime Costs (Direct Materials + Direct Labor)      Direct Labor Hours        Overhead Function #1      Overhead Function #2       Overhead Function #3               A       $35       4 hrs       2 hrs       1 hr       6 hrs               B       $22       1.5 hr       1 hr       8 hrs       1 hr      
The company produces 800 units of Product A and 8,000 units of Product B each period.
The overhead functions have the following hourly costs:
$$\begin{array} { | l | l | } 
\hline \text { Function } & \text { Haurly Rate} \
\hline 1 & \$ 10 \
\hline 2 & 7 \
\hline 3 & 18 \
\hline
\end{array}$$

Refer to Glassman Company If total overhead is assigned to A and B on the basis of overhead activity hours used,the total product cost per unit assigned to Product B will be

Accepted Answer

A) $115.50 
B) $73.32 
C) $34.60 
D) None of the responses are correct. 
A) $115.50 
B) $73.32 
C) $34.60 
D) None of the responses are correct.

Question 3

Glassman Company
Glassman Company produces two products: A andB.The company has three overhead functions that are required for both products.
Below is production information for Products A and B:
             Product       Prime Costs (Direct Materials + Direct Labor)      Direct Labor Hours        Overhead Function #1      Overhead Function #2       Overhead Function #3               A       $35       4 hrs       2 hrs       1 hr       6 hrs               B       $22       1.5 hr       1 hr       8 hrs       1 hr      
The company produces 800 units of Product A and 8,000 units of Product B each period.
The overhead functions have the following hourly costs:
$$\begin{array} { | l | l | } 
\hline \text { Function } & \text { Haurly Rate} \
\hline 1 & \$ 10 \
\hline 2 & 7 \
\hline 3 & 18 \
\hline
\end{array}$$

Refer to Glassman Company If total overhead is assigned to A and B on the basis of overhead activity hours used,the total product cost per unit assigned to Product A will be

Accepted Answer

A) $86.32. 
B) $95.00. 
C) $115.50. 
D) None of the responses are correct. 
A) $86.32. 
B) $95.00. 
C) $115.50. 
D) None of the responses are correct.

Question 4

The following items are used in tracing costs in an ABC system.In which order are they used?
(1) cost object
(2) cost driver
(3) activity driver
(4) cost pool

Accepted Answer

A) 1,2,3,4 
B) 2,3,4,1 
C) 2,4,3,1 
D) 4,3,1,2 
A) 1,2,3,4 
B) 2,3,4,1 
C) 2,4,3,1 
D) 4,3,1,2

Question 5

Office Innovations Corporation manufactures hand-made pine file boxes for a variety of clients.As production manager,you have developed the following value chart:
             Operation       Average Number of Days                Receiving materials       1               Storing materials       2               Handling materials       3               Handling materials       6               Assembling materials       4               Building boxes       7               Attaching hinges      2               Inspection       1      a. Determine the value-added activities and their total time.
b. Determine the non-value-added activities and their total time 
c. Calculate the mamufacturing cycle efficiency.

Accepted Answer

a. Determine the value-added activities

Question 6

The Pareto principle is important to consider when an organization is

Accepted Answer

A) assessing whether to employ activity-based costing versus attribute-based costing. 
B) evaluating the number of activities that are value-added versus those that are non-value-added. 
C) deciding whether to offer a product in one color versus in ten colors. 
D) determining whether simultaneous engineering activities will be impacted by the "Rule of One." 
A) assessing whether to employ activity-based costing versus attribute-based costing. 
B) evaluating the number of activities that are value-added versus those that are non-value-added. 
C) deciding whether to offer a product in one color versus in ten colors. 
D) determining whether simultaneous engineering activities will be impacted by the "Rule of One."

Question 7

Which of the following is considered a value-added activity?
$\text {\underline{ Idle time} }$    $\text {\underline{ Inspection time} }$        $\text {\underline{ Transfer time} }$

Accepted Answer

A) yes yes no 
B) no no no 
C) yes no yes 
D) no yes yes 
A) yes yes no 
B) no no no 
C) yes no yes 
D) no yes yes

Question 8

Global competition has forced American industry to

Accepted Answer

A) seek increased governmental regulation. 
B) improve product quality and customer service. 
C) narrow product lines. 
D) decrease its social responsibility. 
A) seek increased governmental regulation. 
B) improve product quality and customer service. 
C) narrow product lines. 
D) decrease its social responsibility.

Question 9

Costs that are common to many different activities within an organization are known as ____ costs.

Accepted Answer

A) product- or process-level 
B) organizational-level 
C) batch-level 
D) unit-level 
A) product- or process-level 
B) organizational-level 
C) batch-level 
D) unit-level

Question 10

Manufacturing cycle efficiency is a measure of

Accepted Answer

A) bottlenecks. 
B) effectiveness. 
C) efficiency. 
D) quality. 
A) bottlenecks. 
B) effectiveness. 
C) efficiency. 
D) quality.

Question 11

When cost driver analysis is used,organizational profit or loss can be determined by subtracting

Accepted Answer

A) organizational costs from total margin provided by products. 
B) organizational costs from total product revenue. 
C) total product costs from total product revenue. 
D) total unit,batch,product/process,and organizational level costs incurred for a period from total product revenue. 
A) organizational costs from total margin provided by products. 
B) organizational costs from total product revenue. 
C) total product costs from total product revenue. 
D) total unit,batch,product/process,and organizational level costs incurred for a period from total product revenue.

Question 12

A value chart should include which of the following?
$\text {\underline{ Idle time} }$    $\text {\underline{ Inspection time} }$        $\text {\underline{ Transfer time} }$

Accepted Answer

A) yes no yes 
B) no no yes 
C) yes yes no 
D) yes yes yes 
A) yes no yes 
B) no no yes 
C) yes yes no 
D) yes yes yes

Question 13

A segment of a production or service process for which management wants a separate report is referred to as a(n)______________________________.

Accepted Answer

The answer of A segment of a production or service...

Question 14

Houston National Bank
Houston National Bank had the following activities,traceable costs,and
Physical flow of driver units:
$\begin{array}{lll}
\text {\underline{Activities }} & \begin{array}{l}
\text { Traceable } \
\text {\underline{ Costs }}
\end{array} & \begin{array}{l}
\text { Physical flow of } \
\text {\underline{Driver Units} }
\end{array} \
\text { Open new accounts } & \text { \$50,000 } & 1,000 \text { accounts } \
\text { Process deposits } & 36,000 & 400,000 \text { deposits } \
\text { Process withdrawals } & 15,000 & 200,000 \text { withcrawal } \
\text { Process loan applications } & 27,000 & 900 \text { applications }
\end{array}$
The above activities are used by the Memorial branch and the University branch:
                   Memorial       University                New accounts       200       400               Deposits       40,000       20,000               Withdrawals       15,000       18,000               Loan applications       100       160      
Refer to Houston National Bank.What is the cost per driver unit for the loan application activity?

Accepted Answer

A) $0.09 
B) $0.075 
C) $30.00 
D) $50.00 
A) $0.09 
B) $0.075 
C) $30.00 
D) $50.00

Question 15

Falcon Crest Corporation manufactures two brands of wine: Regular and Extra Rich
Below is the current year production data for the company:
                    Regular       Extra Rich                Direct material in pounds       225,000       110,000               Direct labor hours       45,000       65,000               Machine hours       36,000       24,000               Number of setups       1,450       65,000               Number of gallons produced       450,000       90,000       
The 335,000 pounds of material had a total cost of $753,750.Direct labor is $21 per hour.
The company has total overhead production costs of $2,212,125.
a.If Falcon Crest Corporation applies factory overhead using direct labor hours,compute the total production cost and the unit cost for each brand
b.If Falcon Crest Corporation applies factory overhead using machine hours,compute the total production cost and the unit cost for each brand.
c.Assume that Falcon Crest Corporation has established the following activity centers,cost drivers,and costs to apply factory overhead.
              Cost Pool       Cost Driver      Cost       Volume                Equipment Maintenance       # of machine hours       $450,000       60,000               Production Setup       # of setups       $248,625       3,825               Material Handling       Pounds of Materials       $703,500       335,000               Storage Costs       # of gallons produced       $810,000       540,000       
Compute the total cost and the unit cost for each brand.
d.Explain why the unit cost for each model is different across the three methods of overhead application.How can this information benefit the organization?

Accepted Answer

@#IMG-DLM& 
d.The allocation of overhead using vol

Question 16

An activity-based costing system should be evaluated with regard to the benefits it can provide an organization versus the costs of implementing it.

Accepted Answer

A) True 
 B)False

Question 17

For a company that manufactures candy,how would the cost of sugar be classified?
$\text {\underline{ Direct Costs} }$         $\text {\underline{ Value-A dded Costs} }$

Accepted Answer

A)  Yes No 
B)  No Yes 
C)  Yes Yes 
D)  No No 
A)  Yes No 
B)  No Yes 
C)  Yes Yes 
D)  No No

Question 18

An activity that does not increase the value of a product for a customer is referred to as a _________________________ activity.

Accepted Answer

The answer of An activity that does not increase the...

Question 19

Houston National Bank
Houston National Bank had the following activities,traceable costs,and
Physical flow of driver units:
$\begin{array}{lll}
\text {\underline{Activities }} & \begin{array}{l}
\text { Traceable } \
\text {\underline{ Costs }}
\end{array} & \begin{array}{l}
\text { Physical flow of } \
\text {\underline{Driver Units} }
\end{array} \
\text { Open new accounts } & \text { \$50,000 } & 1,000 \text { accounts } \
\text { Process deposits } & 36,000 & 400,000 \text { deposits } \
\text { Process withdrawals } & 15,000 & 200,000 \text { withcrawal } \
\text { Process loan applications } & 27,000 & 900 \text { applications }
\end{array}$

The above activities are used by the Memorial branch and the University branch:
                   Memorial       University                New accounts       200       400               Deposits       40,000       20,000               Withdrawals       15,000       18,000               Loan applications       100       160      
Refer to Houston National Bank.How much of the loan application cost will be assigned to the Memorial branch?

Accepted Answer

A) $3,000 
B) $4,800 
C) $ 7,800 
D) $27,000 
A) $3,000 
B) $4,800 
C) $ 7,800 
D) $27,000

Question 20

Ultimate Vision Corporation
Ultimate Vision Corporation has two product lines: LCD televisions and projection televisions.The company has budgeted the following production and overhead costs for the upcoming year:
                           LCD TV’s       Projection TV’s              Units Produced               1,500       2,250               Direct labor hours per Unit              20       30               Material Moves per Product Line              15       20               Budgeted Materials Handling Cost       $75,000                             Total Machine Hours             10,000        16,000               Machine Maintenance Costs      $180,000                     
Refer to Ultimate Vision Corporation.If the company uses total direct labor hours to allocate factory overhead,the materials handing cost allocated to projection TVs would be:

Accepted Answer

A) $35,000 
B) $45,000 
C) $46,875 
D) $51,923 
A) $35,000 
B) $45,000 
C) $46,875 
D) $51,923

The amount of time between the development and the production of a product is

The following items are used in tracing costs in an ABC system.In which order are they used? (1) cost object (2) cost driver (3) activity driver (4) cost pool

The Pareto principle is important to consider when an organization is

Which of the following is considered a value-added activity? $\text {\underline{ Idle time} }$ $\text {\underline{ Inspection time} }$ $\text {\underline{ Transfer time} }$

Global competition has forced American industry to

Costs that are common to many different activities within an organization are known as ____ costs.

Manufacturing cycle efficiency is a measure of

When cost driver analysis is used,organizational profit or loss can be determined by subtracting

A value chart should include which of the following? $\text {\underline{ Idle time} }$ $\text {\underline{ Inspection time} }$ $\text {\underline{ Transfer time} }$

A segment of a production or service process for which management wants a separate report is referred to as a(n)______________________________.

An activity-based costing system should be evaluated with regard to the benefits it can provide an organization versus the costs of implementing it.

For a company that manufactures candy,how would the cost of sugar be classified? $\text {\underline{ Direct Costs} }$ $\text {\underline{ Value-A dded Costs} }$

An activity that does not increase the value of a product for a customer is referred to as a _________________________ activity.

Introduction to Cost Accounting

Cost Terminology and Cost Behaviors

Predetermined Overhead Rates, Flexible Budgets, and Absorptionvariable Costing

Job Order Costing

Process Costing

Standard Costing and Variance Analysis

The Master Budget

Break-Even Point and Cost-Volume-Profit Analysis

Relevant Information for Decision Making

Allocation of Joint Costs and Accounting for By-Products

Introduction to Cost Management Systems

Responsibility Accounting,support Department Allocations,and Transfer Pricing

Performance Measurement, balanced Scorecards, and Performance Rewards

Capital Budgeting

Managing Costs and Uncertainty

Implementing Quality Concepts

Inventory and Production Management

Emerging Management Practices

Filters

Product	Prime Costs (Direct Materials + Direct Labor)	Direct Labor Hours	Overhead Function #1	Overhead Function #2	Overhead Function #3
A	$35	4 hrs	2 hrs	1 hr	6 hrs
B	$22	1.5 hr	1 hr	8 hrs	1 hr

Operation	Average Number of Days
Receiving materials	1
Storing materials	2
Handling materials	3
Handling materials	6
Assembling materials	4
Building boxes	7
Attaching hinges	2
Inspection	1

	Memorial	University
New accounts	200	400
Deposits	40,000	20,000
Withdrawals	15,000	18,000
Loan applications	100	160

	Regular	Extra Rich
Direct material in pounds	225,000	110,000
Direct labor hours	45,000	65,000
Machine hours	36,000	24,000
Number of setups	1,450	65,000
Number of gallons produced	450,000	90,000

Cost Pool	Cost Driver	Cost	Volume
Equipment Maintenance	# of machine hours	$450,000	60,000
Production Setup	# of setups	$248,625	3,825
Material Handling	Pounds of Materials	$703,500	335,000
Storage Costs	# of gallons produced	$810,000	540,000

		LCD TV’s	Projection TV’s
Units Produced		1,500	2,250
Direct labor hours per Unit		20	30
Material Moves per Product Line		15	20
Budgeted Materials Handling Cost	$75,000
Total Machine Hours		10,000	16,000
Machine Maintenance Costs	$180,000

Exam 4: Activity-Based Management and Activity-Based Costing

The amount of time between the development and the production of a product is

The following items are used in tracing costs in an ABC system.In which order are they used? (1) cost object (2) cost driver (3) activity driver (4) cost pool

The Pareto principle is important to consider when an organization is

Which of the following is considered a value-added activity? Idle time‾ \text {\underline{ Idle time} } Idle time​ Inspection time‾ \text {\underline{ Inspection time} } Inspection time​ Transfer time‾ \text {\underline{ Transfer time} } Transfer time​

Global competition has forced American industry to

Costs that are common to many different activities within an organization are known as ____ costs.

Manufacturing cycle efficiency is a measure of

When cost driver analysis is used,organizational profit or loss can be determined by subtracting

A value chart should include which of the following? Idle time‾ \text {\underline{ Idle time} } Idle time​ Inspection time‾ \text {\underline{ Inspection time} } Inspection time​ Transfer time‾ \text {\underline{ Transfer time} } Transfer time​

A segment of a production or service process for which management wants a separate report is referred to as a(n)______________________________.

An activity-based costing system should be evaluated with regard to the benefits it can provide an organization versus the costs of implementing it.

For a company that manufactures candy,how would the cost of sugar be classified? Direct Costs‾ \text {\underline{ Direct Costs} } Direct Costs​ Value-A dded Costs‾ \text {\underline{ Value-A dded Costs} } Value-A dded Costs​

An activity that does not increase the value of a product for a customer is referred to as a _________________________ activity.

Introduction to Cost Accounting

Cost Terminology and Cost Behaviors

Predetermined Overhead Rates, Flexible Budgets, and Absorptionvariable Costing

Job Order Costing

Process Costing

Standard Costing and Variance Analysis

The Master Budget

Break-Even Point and Cost-Volume-Profit Analysis

Relevant Information for Decision Making

Allocation of Joint Costs and Accounting for By-Products

Introduction to Cost Management Systems

Responsibility Accounting,support Department Allocations,and Transfer Pricing

Performance Measurement, balanced Scorecards, and Performance Rewards

Capital Budgeting

Managing Costs and Uncertainty

Implementing Quality Concepts

Inventory and Production Management

Emerging Management Practices

Filters

Which of the following is considered a value-added activity? $\text {\underline{ Idle time} }$ $\text {\underline{ Inspection time} }$ $\text {\underline{ Transfer time} }$

A value chart should include which of the following? $\text {\underline{ Idle time} }$ $\text {\underline{ Inspection time} }$ $\text {\underline{ Transfer time} }$

For a company that manufactures candy,how would the cost of sugar be classified? $\text {\underline{ Direct Costs} }$ $\text {\underline{ Value-A dded Costs} }$