Question 1

Product complexity refers to the number of processes through which a product flows.

Accepted Answer

A) True 
 B)False

Question 2

Traditionally,overhead has been assigned based on direct labor hours or machine hours.What effect does this have on the cost of a high-volume item?

Accepted Answer

A) over-costs the product 
B) under-costs the product 
C) has no effect the product cost 
D) cost per unit is unaffected by product volume 
A) over-costs the product 
B) under-costs the product 
C) has no effect the product cost 
D) cost per unit is unaffected by product volume

Question 3

An activity that is essential for business operations but does not add value to a product is referred to as a ___________________________________ activity.

Accepted Answer

business v

Question 4

Relative to traditional product costing,activity-based costing differs in the way costs are

Accepted Answer

A) processed. 
B) allocated. 
C) benchmarked. 
D) incurreD. 
A) processed. 
B) allocated. 
C) benchmarked. 
D) incurreD.

Question 5

Activity-based costing conforms to GAAP with regard to which costs should be expensed.

Accepted Answer

A) True 
 B)False

Question 6

Activity-based costing and generally accepted accounting principles differ in that ABC

Accepted Answer

A) does not define product costs in the same manner as GAAP. 
B) cannot be used to compute an income statement,but GAAP can. 
C) is concerned only with costs generated from automated processes,but GAAP is concerned with costs generated from both manual and automated processes. 
D) information is useful only to managers,while GAAP information is useful to all organizational stakeholders. 
A) does not define product costs in the same manner as GAAP. 
B) cannot be used to compute an income statement,but GAAP can. 
C) is concerned only with costs generated from automated processes,but GAAP is concerned with costs generated from both manual and automated processes. 
D) information is useful only to managers,while GAAP information is useful to all organizational stakeholders.

Question 7

Preparation of a value chart is the first step in activity analysis

Accepted Answer

A) True 
 B)False

Question 8

Reed Company
Reed Company produces 50,000 units of Product Q and 6,000 units of Product Z during a period.In that period,four set-ups were required for color changes.All units of Product Q are black,which is the color in the process at the beginning of the period.A set-up was made for 1,000 blue units of Product Z;a set-up was made for 4,500 red units of Product Z;a set-up was made for 500 green units of Product Z.A set-up was then made to return the process to its standard black coloration and the units of Product Q were run.Each set-up costs $500.
Refer to Reed Company.If set-up cost is assigned on a volume basis for the department,what is the approximate per-unit set-up cost for Product Z?

Accepted Answer

A) $.010. 
B) $.036. 
C) $.040. 
D) None of the responses are correct. 
A) $.010. 
B) $.036. 
C) $.040. 
D) None of the responses are correct.

Question 9

How has the increase in product variety affected the costs of American business?

Accepted Answer

The increase in product variety has incr

Question 10

For a CPA firm,how would the wages of staff auditors 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 11

An activity center is an organizational unit

Accepted Answer

A) that makes a single product or performs a single service. 
B) in which only value-added activities are performed. 
C) that incurs only unit,batch,or product/process level costs. 
D) for which management wants separate activity information. 
A) that makes a single product or performs a single service. 
B) in which only value-added activities are performed. 
C) that incurs only unit,batch,or product/process level costs. 
D) for which management wants separate activity information.

Question 12

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 new account cost will be assigned to the University branch?

Accepted Answer

A) $10,000 
B) $20,000 
C) $30,000 
D) $50,000 
A) $10,000 
B) $20,000 
C) $30,000 
D) $50,000

Question 13

A chart that indicates each step in a production process is referred to as a _________________________.

Accepted Answer

The answer of A chart that indicates each step in...

Question 14

Cost allocation bases in activity-based costing should be

Accepted Answer

A) cost drivers. 
B) value-added activities. 
C) activity centers. 
D) processes. 
A) cost drivers. 
B) value-added activities. 
C) activity centers. 
D) processes.

Question 15

Building depreciation is generally considered a product or process level cost.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following cost drivers is often disregarded in a traditional costing system?

Accepted Answer

A) Pounds of direct material 
B) Machine hours 
C) Direct labor dollars 
D) Variety of products manufactured 
A) Pounds of direct material 
B) Machine hours 
C) Direct labor dollars 
D) Variety of products manufactured

Question 17

For a CPA firm,how would the costs of continuing education for audit managers 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

A just-in-time manufacturing process should have substantially less of which of the following than a traditional manufacturing process?
$\text {\underline{ I dile tille} }$   $\text {\underline{ Transfer time} }$     $\text {\underline{Value-added time} }$      $\text {\underline{ Cycle time} }$

Accepted Answer

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

Question 19

The actual time taken to perform all necessary manufacturing functions in a process is referred to as _________________________.
or

Accepted Answer

processing

Question 20

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 direct labor hours,Product B will have an overhead cost per unit of

Accepted Answer

A) $51.32 
B) $76.97 
C) $510.32 
D) None of the responses are correct. 
A) $51.32 
B) $76.97 
C) $510.32 
D) None of the responses are correct.

Product complexity refers to the number of processes through which a product flows.

Traditionally,overhead has been assigned based on direct labor hours or machine hours.What effect does this have on the cost of a high-volume item?

An activity that is essential for business operations but does not add value to a product is referred to as a ___________________________________ activity.

Relative to traditional product costing,activity-based costing differs in the way costs are

Activity-based costing conforms to GAAP with regard to which costs should be expensed.

Activity-based costing and generally accepted accounting principles differ in that ABC

Preparation of a value chart is the first step in activity analysis

How has the increase in product variety affected the costs of American business?

For a CPA firm,how would the wages of staff auditors be classified? $\text {\underline{ Direct Costs} }$ $\text {\underline{ Value-A dded Costs} }$

An activity center is an organizational unit

A chart that indicates each step in a production process is referred to as a _________________________.

Cost allocation bases in activity-based costing should be

Building depreciation is generally considered a product or process level cost.

Which of the following cost drivers is often disregarded in a traditional costing system?

For a CPA firm,how would the costs of continuing education for audit managers be classified? $\text {\underline{ Direct Costs} }$ $\text {\underline{ Value-A dded Costs} }$

A just-in-time manufacturing process should have substantially less of which of the following than a traditional manufacturing process? $\text {\underline{ I dile tille} }$ $\text {\underline{ Transfer time} }$ $\text {\underline{Value-added time} }$ $\text {\underline{ Cycle time} }$

The actual time taken to perform all necessary manufacturing functions in a process is referred to as _________________________. or

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

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

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

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

Product complexity refers to the number of processes through which a product flows.

Traditionally,overhead has been assigned based on direct labor hours or machine hours.What effect does this have on the cost of a high-volume item?

An activity that is essential for business operations but does not add value to a product is referred to as a ___________________________________ activity.

Relative to traditional product costing,activity-based costing differs in the way costs are

Activity-based costing conforms to GAAP with regard to which costs should be expensed.

Activity-based costing and generally accepted accounting principles differ in that ABC

Preparation of a value chart is the first step in activity analysis

How has the increase in product variety affected the costs of American business?

For a CPA firm,how would the wages of staff auditors 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 center is an organizational unit

A chart that indicates each step in a production process is referred to as a _________________________.

Cost allocation bases in activity-based costing should be

Building depreciation is generally considered a product or process level cost.

Which of the following cost drivers is often disregarded in a traditional costing system?

For a CPA firm,how would the costs of continuing education for audit managers be classified? Direct Costs‾ \text {\underline{ Direct Costs} } Direct Costs​ Value-A dded Costs‾ \text {\underline{ Value-A dded Costs} } Value-A dded Costs​

The actual time taken to perform all necessary manufacturing functions in a process is referred to as _________________________. or

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

For a CPA firm,how would the wages of staff auditors be classified? $\text {\underline{ Direct Costs} }$ $\text {\underline{ Value-A dded Costs} }$

For a CPA firm,how would the costs of continuing education for audit managers be classified? $\text {\underline{ Direct Costs} }$ $\text {\underline{ Value-A dded Costs} }$