Question 1

Today,traditional accounting methods are

Accepted Answer

A) still appropriate for financial reporting. 
B) still appropriate for providing useful cost information to internal managers. 
C) still appropriate for both internal and external financial reporting. 
D) outdated for all purposes. 
A) still appropriate for financial reporting. 
B) still appropriate for providing useful cost information to internal managers. 
C) still appropriate for both internal and external financial reporting. 
D) outdated for all purposes.

Question 2

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 an activity-based costing (ABC)system to allocate factory overhead,the machine maintenance cost allocated to LCD TVs would be:

Accepted Answer

A) $51,923 
B) $55,385 
C) $69,231 
D) $72,000 
A) $51,923 
B) $55,385 
C) $69,231 
D) $72,000

Question 3

When a company is labor-intensive,the cost driver that is probably least significant would be

Accepted Answer

A) direct labor hours. 
B) direct labor dollars. 
C) machine hours. 
D) cost of materials useD. 
A) direct labor hours. 
B) direct labor dollars. 
C) machine hours. 
D) cost of materials useD.

Question 4

Costs that support a product type or process are referred to as ________________________.

Accepted Answer

product/pr

Question 5

The actual time it takes to perform a specific task is called

Accepted Answer

A) inspection time. 
B) service time. 
C) transfer time. 
D) quality time. 
A) inspection time. 
B) service time. 
C) transfer time. 
D) quality time.

Question 6

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 number of units produced 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

Question 7

There is a direct relationship between the complexity of a production process and overhead costs.

Accepted Answer

A) True 
 B)False

Question 8

A series of activities that when performed together satisfy a specific objective is referred to as a ____________________.

Accepted Answer

The answer of A series of activities that when performed...

Question 9

Simultaneous engineering can be used to

Accepted Answer

A) reduce both product and process complexity. 
B) integrate activity-based costing with value chain analysis. 
C) reduce the time-to-market of new products through elimination of batch-level activities. 
D) reduce manufacturing cycle efficiency by reducing process waste. 
A) reduce both product and process complexity. 
B) integrate activity-based costing with value chain analysis. 
C) reduce the time-to-market of new products through elimination of batch-level activities. 
D) reduce manufacturing cycle efficiency by reducing process waste.

Question 10

Costs that are associated with the production of a single unit of a product are referred to as _________________________.

Accepted Answer

The answer of Costs that are associated with the production...

Question 11

Godfrey Corporation would like to institute an activity-based costing system to price products.The company's Purchasing Department incurs costs of $550,000 per year and has six employees.Purchasing has determined the three major activities that occur during the year.
              Activity       Allocation Measure      # of People         Total Cost               Issuing purchase orders       # of purchase orders       1       $150,000               Reviewing receiving reports       # of receiving reports      2       $175,000               Making phone calls       # of phone calls       3       $225,000       
During the year,50,000 phone calls were made in the department;15,000 purchase orders were issued;and 10,000 shipments were received.Product A required 200 phone calls,150 receiving reports,and 50 purchase orders.Product B required 350 phone calls,400 receiving reports,and 100 purchase orders.
 a. Determine the amount of Purchasing Department cost that should be assigned to each of these products.
b. Determine Purchasing Department cost per unit if 1,500 units of Prochuct $ \mathrm{A} $ and 3,000 units of Product $ \mathrm{B} $ were manufactured during the year.

Accepted Answer

The answer of Godfrey Corporation would like to institute an...

Question 12

For one product that a firm produces,the manufacturing cycle efficiency is 20 percent.If the total production time is 12 hours,what is the total manufacturing time?

Accepted Answer

A) 15.0 hours 
B) 60.0 hours 
C) 12.0 hours 
D) 2.4 hours 
A) 15.0 hours 
B) 60.0 hours 
C) 12.0 hours 
D) 2.4 hours

Question 13

Efficient Electronics Corporation produces two types of electronic data organizers: basic and deluxe.The following information about the production process is available:
                     Basic      Deluxe               Number produced        900,000       500,000               Machine hours       75,000       30,000               Inspection hours       9,000       45,000               Revenues       $63,000,000       $45,000,000               Direct costs       $38,000,000       $31,000,000       
Total factory overhead is $10,000,000.Of this overhead,$4,000,000 is related to utilities and the remainder is related to quality control.
a.Determine the total overhead cost assigned to each type of data organizer using machine hours as the allocation base.Calculate the gross profit per unit for each product.
b.Determine the total overhead cost assigned to each type of data organizer if overhead is assigned using allocation bases appropriate to the overhead costs.Calculate the gross profit per unit of each product.
c.Explain why the unit cost for each model is different between the two methods of allocation.

Accepted Answer

@#IMG-DLM& c)When machine hours are used to alloca

Question 14

Business value-added activities add value to a product.

Accepted Answer

A) True 
 B)False

Question 15

For traditional costing purposes,R&D costs are

Accepted Answer

A) capitalized and allocated over the product life cycle. 
B) expensed as incurred. 
C) capitalized and amortized over three years. 
D) charged to the future accounting periods that receive the benefit of the R&D expenditures. 
A) capitalized and allocated over the product life cycle. 
B) expensed as incurred. 
C) capitalized and amortized over three years. 
D) charged to the future accounting periods that receive the benefit of the R&D expenditures.

Question 16

Discuss how activity-based costing and activity based management support continuous improvement in an organization.

Accepted Answer

Activity based costing and activity base

Question 17

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 number of units produced to allocate factory overhead,the machine maintenance cost allocated to LCD TVs would be:

Accepted Answer

A) $51,923 
B) $55,385 
C) $69,231 
D) $72,000 
A) $51,923 
B) $55,385 
C) $69,231 
D) $72,000

Question 18

Glassman Company
Glassman Company produces two products: A and B.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:
$$\begin{array} { | l | l | } 
\hline \text { Function } & \text { Hourly Ratr } \
\hline 1 & \$ 10 \
\hline 2 & 7 \
\hline 4 & 18 \
\hline
\end{array}$$
Refer to Glassman Company If total overhead is assigned to A and B on the basis of units produced,Product A will have an overhead cost per unit ofB.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:
$$\begin{array} { | l | l | } 
\hline \text { Function } & \text { Haurly Rate } \
\hline 1 & \$ 10 \
\hline 2 & 7 \
\hline 4 & 18 \
\hline
\end{array}$$
Refer to Glassman Company If total overhead is assigned to A and B on the basis of units produced,Product A will have an overhead cost per unit of

Accepted Answer

A) $ 88.64. 
B) $123.64. 
C) $135.00. 
D) None of the responses are correct. 
A) $ 88.64. 
B) $123.64. 
C) $135.00. 
D) None of the responses are correct.

Question 19

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.Assume that Reed Company has decided to allocate overhead costs using levels of cost drivers.What would be the approximate per-unit set-up cost for the green units of Product Z?

Accepted Answer

A) $1.00. 
B) $0.25. 
C) $0.04. 
D) None of the responses are correct. 
A) $1.00. 
B) $0.25. 
C) $0.04. 
D) None of the responses are correct.

Question 20

When a firm redesigns a product to reduce the number of component parts,the firm is

Accepted Answer

A) increasing consumer value. 
B) increasing the value added to the product. 
C) decreasing product variety. 
D) decreasing non-value-added costs. 
A) increasing consumer value. 
B) increasing the value added to the product. 
C) decreasing product variety. 
D) decreasing non-value-added costs.

Today,traditional accounting methods are

When a company is labor-intensive,the cost driver that is probably least significant would be

Costs that support a product type or process are referred to as ________________________.

The actual time it takes to perform a specific task is called

There is a direct relationship between the complexity of a production process and overhead costs.

A series of activities that when performed together satisfy a specific objective is referred to as a ____________________.

Simultaneous engineering can be used to

Costs that are associated with the production of a single unit of a product are referred to as _________________________.

For one product that a firm produces,the manufacturing cycle efficiency is 20 percent.If the total production time is 12 hours,what is the total manufacturing time?

Business value-added activities add value to a product.

For traditional costing purposes,R&D costs are

Discuss how activity-based costing and activity based management support continuous improvement in an organization.

When a firm redesigns a product to reduce the number of component parts,the firm is

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

		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

Activity	Allocation Measure	# of People	Total Cost
Issuing purchase orders	# of purchase orders	1	$150,000
Reviewing receiving reports	# of receiving reports	2	$175,000
Making phone calls	# of phone calls	3	$225,000

	Basic	Deluxe
Number produced	900,000	500,000
Machine hours	75,000	30,000
Inspection hours	9,000	45,000
Revenues	$63,000,000	$45,000,000
Direct costs	$38,000,000	$31,000,000

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

Today,traditional accounting methods are

When a company is labor-intensive,the cost driver that is probably least significant would be

Costs that support a product type or process are referred to as ________________________.

The actual time it takes to perform a specific task is called

There is a direct relationship between the complexity of a production process and overhead costs.

A series of activities that when performed together satisfy a specific objective is referred to as a ____________________.

Simultaneous engineering can be used to

Costs that are associated with the production of a single unit of a product are referred to as _________________________.

For one product that a firm produces,the manufacturing cycle efficiency is 20 percent.If the total production time is 12 hours,what is the total manufacturing time?

Business value-added activities add value to a product.

For traditional costing purposes,R&D costs are

Discuss how activity-based costing and activity based management support continuous improvement in an organization.

When a firm redesigns a product to reduce the number of component parts,the firm is

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