Question 1

There is a positive relationship between value-added (VA)activities and manufacturing cycle efficiency (MCE).

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is most likely to make the implementation of ABC/ABM slow and difficult?

Accepted Answer

A) The development of new cost drivers that measure costs more effectively. 
B) A lack of involvement by or support from upper management. 
C) The need for dual costing systems. 
D) An inability to eliminate all business-value-added activities. 
A) The development of new cost drivers that measure costs more effectively. 
B) A lack of involvement by or support from upper management. 
C) The need for dual costing systems. 
D) An inability to eliminate all business-value-added activities.

Question 3

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 machine maintenance cost allocated to LCD TV's 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 4

Building depreciation is generally considered an organizational or facility cost.

Accepted Answer

A) True 
 B)False

Question 5

Describe the two-step process by which costs are allocated in an ABC system.

Accepted Answer

Costs must be accumulated in the general

Question 6

The sum of the non-value-added time and the value-added time equals

Accepted Answer

A) inspection time. 
B) production time. 
C) the product life cycle. 
D) cycle time. 
A) inspection time. 
B) production time. 
C) the product life cycle. 
D) cycle time.

Question 7

Implementing activity based costing (ABC)has a direct impact on reducing overhead in an organization.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following add customer value?

Accepted Answer

A) setup time 
B) storage time 
C) idle time 
D) processing time 
A) setup time 
B) storage time 
C) idle time 
D) processing time

Question 9

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 deposit cost will be assigned to the University branch?

Accepted Answer

A) $ 1,800 
B) $ 3,600 
C) $ 5,400 
D) $36,000 
A) $ 1,800 
B) $ 3,600 
C) $ 5,400 
D) $36,000

Question 10

A(n)_________________________ measures the resources consumed by a manufacturing process.

Accepted Answer

The answer of A(n)_________________________ measures the resources consumed by a...

Question 11

Of the following,which is the best reason for using activity-based costing?

Accepted Answer

A) to keep better track of overhead costs 
B) to more accurately assign overhead costs to cost pools so that these costs are better controlled 
C) to better assign overhead costs to products 
D) to assign indirect service overhead costs to direct overhead cost pools 
A) to keep better track of overhead costs 
B) to more accurately assign overhead costs to cost pools so that these costs are better controlled 
C) to better assign overhead costs to products 
D) to assign indirect service overhead costs to direct overhead cost pools

Question 12

Brewer Corporation would like to institute an activity-based costing system to allocate overhead to its products.The company's Shipping Department incurs costs of $750,000 per year and has nine employees.The Shipping Department has determined that three major activities that occur during the year.
             Activity        Measure       # of People       Total Cost               Reviewing sales invoices       # of sales invoices       2       $175,000               Initiating shipping orders       # of shipping orders       3       $270,000               Making phone calls       # of phone calls       4       $330,000       
During the year,60,000 phone calls were made in the department;25,000 sales invoices were reviewed;and 15,000 shipments were initiated.Product 101 required 300 phone calls,225 sales invoice reviews,and 175 shipping orders.Product 102 required 400 phone calls,500 sales invoice reviews,and 350 shipping orders.
 a. Determine the amount of Shipping Department cost that should be assigned to each of these products.
b. Determine ShippingDepartment cost per unit if 2,500 urits of Product 101 and 5,000 units of Product 102 were sold chuing the vear.

Accepted Answer

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

Question 13

A traditional costing system has fewer cost pools that does an activity-based costing (ABC)system.

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

A) $84.00. 
B) $88.64. 
C) $110.64. 
D) None of the responses are correct. 
A) $84.00. 
B) $88.64. 
C) $110.64. 
D) None of the responses are correct.

Question 15

Which of the following is typically regarded as a cost driver in traditional accounting practices?

Accepted Answer

A) number of purchase orders processed 
B) number of customers served 
C) number of transactions processed 
D) number of direct labor hours worked 
A) number of purchase orders processed 
B) number of customers served 
C) number of transactions processed 
D) number of direct labor hours worked

Question 16

Costs that support an overall production or service process are referred to as ______________________________.
or

Accepted Answer

organizati

Question 17

Which of the following would not be considered a value-added activity in the preparation of a tax return?

Accepted Answer

A) printing a copy of the return for the client 
B) printing a copy of the return for the IRS 
C) installing tax software 
D) checking for accuracy 
A) printing a copy of the return for the client 
B) printing a copy of the return for the IRS 
C) installing tax software 
D) checking for accuracy

Question 18

Which of the following is/are part of activity-based management?
$\text {\underline{ Activity analys} }$                  $\text {\underline{ Cost driver analysis} }$

Accepted Answer

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

There is a positive relationship between value-added (VA)activities and manufacturing cycle efficiency (MCE).

Which of the following is most likely to make the implementation of ABC/ABM slow and difficult?

Building depreciation is generally considered an organizational or facility cost.

Describe the two-step process by which costs are allocated in an ABC system.

The sum of the non-value-added time and the value-added time equals

Implementing activity based costing (ABC)has a direct impact on reducing overhead in an organization.

Which of the following add customer value?

A(n)_________________________ measures the resources consumed by a manufacturing process.

Of the following,which is the best reason for using activity-based costing?

A traditional costing system has fewer cost pools that does an activity-based costing (ABC)system.

Which of the following is typically regarded as a cost driver in traditional accounting practices?

Costs that support an overall production or service process are referred to as ______________________________. or

Which of the following would not be considered a value-added activity in the preparation of a tax return?

Which of the following is/are part of activity-based management? $\text {\underline{ Activity analys} }$ $\text {\underline{ Cost driver analysis} }$

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

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

Activity	Measure	# of People	Total Cost
Reviewing sales invoices	# of sales invoices	2	$175,000
Initiating shipping orders	# of shipping orders	3	$270,000
Making phone calls	# of phone calls	4	$330,000

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

There is a positive relationship between value-added (VA)activities and manufacturing cycle efficiency (MCE).

Which of the following is most likely to make the implementation of ABC/ABM slow and difficult?

Building depreciation is generally considered an organizational or facility cost.

Describe the two-step process by which costs are allocated in an ABC system.

The sum of the non-value-added time and the value-added time equals

Implementing activity based costing (ABC)has a direct impact on reducing overhead in an organization.

Which of the following add customer value?

A(n)_________________________ measures the resources consumed by a manufacturing process.

Of the following,which is the best reason for using activity-based costing?

A traditional costing system has fewer cost pools that does an activity-based costing (ABC)system.

Which of the following is typically regarded as a cost driver in traditional accounting practices?

Costs that support an overall production or service process are referred to as ______________________________. or

Which of the following would not be considered a value-added activity in the preparation of a tax return?

Which of the following is/are part of activity-based management? Activity analys‾ \text {\underline{ Activity analys} } Activity analys​ Cost driver analysis‾ \text {\underline{ Cost driver analysis} } Cost driver analysis​

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/are part of activity-based management? $\text {\underline{ Activity analys} }$ $\text {\underline{ Cost driver analysis} }$