Question 1

Activity-based costing is used in public service institutions,such as the U.S.Postal Service,but it is only used for pricing decisions.

Accepted Answer

A) True 
 B)False

Question 2

Determining costs of activity pools requires assigning costs accumulated in various account classifications to each of the activity cost pools.This is referred to as ________.

Accepted Answer

A) first-stage allocation 
B) second-stage allocation 
C) third-stage allocation 
D) forth stage allocation 
E) fifth stage allocation 
A) first-stage allocation 
B) second-stage allocation 
C) third-stage allocation 
D) forth stage allocation 
E) fifth stage allocation

Question 3

The general approach to activity-based costing systems in service and merchandise companies is very different from the activity-based costing approach used in manufacturing industries.

Accepted Answer

A) True 
 B)False

Question 4

How do managerial accountants differentiate between the design of a simple-costing system and an activity-based costing system?

Accepted Answer

Managerial accountants understand that a

Question 5

Which of the following is not a reason that manufacturing and distribution personnel would implement activity-based costing systems?

Accepted Answer

A) Focus on how to reduce costs. 
B) Focus on why to reduce costs. 
C) Set cost-reduction targets to reduce per unit costs. 
D) Reduce work without compromising customer service or perceived value. 
E) Reduce work while disregarding customer service and the perceived value. 
A) Focus on how to reduce costs. 
B) Focus on why to reduce costs. 
C) Set cost-reduction targets to reduce per unit costs. 
D) Reduce work without compromising customer service or perceived value. 
E) Reduce work while disregarding customer service and the perceived value.

Question 6

Advances in information technology have no impact on the implementation of refined costing systems.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is not a reason why managers see an accelerated need for refinement?

Accepted Answer

A) The growing demand of products and competition in product markets. 
B) The increases in direct costs. 
C) Decreases in indirect costs. 
D) Increases in product diversity with both international and domestic banking facilities. 
E) Use of broad averages fails to capture differences in demand and leads to distorted and inaccurate cost information. 
A) The growing demand of products and competition in product markets. 
B) The increases in direct costs. 
C) Decreases in indirect costs. 
D) Increases in product diversity with both international and domestic banking facilities. 
E) Use of broad averages fails to capture differences in demand and leads to distorted and inaccurate cost information.

Question 8

The method of management decision making that uses activity-based costing information to improve customer satisfaction and profitability is ________.

Accepted Answer

A) job-cost management 
B) action-cost management 
C) project-cost management 
D) product-cost management 
E) activity-based management 
A) job-cost management 
B) action-cost management 
C) project-cost management 
D) product-cost management 
E) activity-based management

Question 9

A product consumes a high level of resources per unit,but is reported to have a low cost per unit is known as ________.

Accepted Answer

A) product overcosting 
B) product undercosting 
C) strategic consequences 
D) accurate product costs 
E) accurate service costs 
A) product overcosting 
B) product undercosting 
C) strategic consequences 
D) accurate product costs 
E) accurate service costs

Question 10

Beaver's Molding Corporation produces a quantity of 50,000 molds for contractors.The workers produce 220 molds per batch.Compute the total number of batches produced.

Accepted Answer

A) 200.01 batches 
B) 210.95 batches 
C) 217.03 batches 
D) 227.27 batches 
E) 237.13 batches 
A) 200.01 batches 
B) 210.95 batches 
C) 217.03 batches 
D) 227.27 batches 
E) 237.13 batches

Question 11

A cost hierarchy is useful to managerial accountants because it categorizes various activity cost pools on the basis of the different types of cost drivers,cost-allocation bases,or different degrees of difficulty in determining cause-and-effect relationships.

Accepted Answer

A) True 
 B)False

Question 12

Why do managers use cost hierarchies? What are the four levels of the cost hierarchy in activity-based costing systems?

Accepted Answer

Managers find cost hierarchies beneficia

Question 13

When incorrect cost-allocation bases are used ________.

Accepted Answer

A) activity-cost information is accurate and available 
B) activity-cost information can be misleading 
C) activity-cost information is most useful 
D) activity-cost information is more practical 
E) activity-cost information is the optimal solution 
A) activity-cost information is accurate and available 
B) activity-cost information can be misleading 
C) activity-cost information is most useful 
D) activity-cost information is more practical 
E) activity-cost information is the optimal solution

Question 14

As product diversity and indirect costs increased,broad averaging led to inaccurate product costs.

Accepted Answer

A) True 
 B)False

Question 15

If a new manager wants to implement activity-based costing systems for the first time,where does he or she begin to consider and implement the system?

Accepted Answer

Typically,new managers implement activit

Question 16

Why do some managers in organizations deduct facility-sustaining costs as a separate lump-sum amount from operating income rather than allocate them to products?

Accepted Answer

Managers deduct facility-sustaining cost

Question 17

The costs of activities that cannot be traced to individual products or services but that support the organization as a whole are ________.

Accepted Answer

A) batch-level costs 
B) input unit-level costs 
C) output unit-level costs 
D) product-sustaining costs 
E) facility-sustaining costs 
A) batch-level costs 
B) input unit-level costs 
C) output unit-level costs 
D) product-sustaining costs 
E) facility-sustaining costs

Question 18

Why is it important for managerial accountants to identify the cost-allocation bases?

Accepted Answer

Managerial accountants identify the cost

Question 19

Product undercosting occurs when a product consumes a high level of resources per unit but is reported to have a low cost per unit.

Accepted Answer

A) True 
 B)False

Question 20

The strength of the cause-and-effect relationship between the cost-allocation base and the cost pools are the same across cost pools.

Accepted Answer

A) True 
 B)False

Activity-based costing is used in public service institutions,such as the U.S.Postal Service,but it is only used for pricing decisions.

Determining costs of activity pools requires assigning costs accumulated in various account classifications to each of the activity cost pools.This is referred to as ________.

The general approach to activity-based costing systems in service and merchandise companies is very different from the activity-based costing approach used in manufacturing industries.

How do managerial accountants differentiate between the design of a simple-costing system and an activity-based costing system?

Which of the following is not a reason that manufacturing and distribution personnel would implement activity-based costing systems?

Advances in information technology have no impact on the implementation of refined costing systems.

Which of the following is not a reason why managers see an accelerated need for refinement?

The method of management decision making that uses activity-based costing information to improve customer satisfaction and profitability is ________.

A product consumes a high level of resources per unit,but is reported to have a low cost per unit is known as ________.

Beaver's Molding Corporation produces a quantity of 50,000 molds for contractors.The workers produce 220 molds per batch.Compute the total number of batches produced.

A cost hierarchy is useful to managerial accountants because it categorizes various activity cost pools on the basis of the different types of cost drivers,cost-allocation bases,or different degrees of difficulty in determining cause-and-effect relationships.

Why do managers use cost hierarchies? What are the four levels of the cost hierarchy in activity-based costing systems?

When incorrect cost-allocation bases are used ________.

As product diversity and indirect costs increased,broad averaging led to inaccurate product costs.

If a new manager wants to implement activity-based costing systems for the first time,where does he or she begin to consider and implement the system?

Why do some managers in organizations deduct facility-sustaining costs as a separate lump-sum amount from operating income rather than allocate them to products?

The costs of activities that cannot be traced to individual products or services but that support the organization as a whole are ________.

Why is it important for managerial accountants to identify the cost-allocation bases?

Product undercosting occurs when a product consumes a high level of resources per unit but is reported to have a low cost per unit.

The strength of the cause-and-effect relationship between the cost-allocation base and the cost pools are the same across cost pools.

The Manager and Management Accounting

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Process Costing and Cost Allocation

Pricing Decisions, customer Profitability, and Cost Management

Determining How Costs Behave

Decision Making and Relevant Information

Quality, inventory Management, and Time

Capital Investments

Master Budget and Responsibility Accounting

Flexible Budgets, cost Variances, and Management Control

Strategy, Balanced Scorecard, and Strategic Profitability Analysis

Transfer Pricing

Performance Measurement and Compensation

Filters

Exam 6: Activity-Based Costing and Activity-Based Management

Activity-based costing is used in public service institutions,such as the U.S.Postal Service,but it is only used for pricing decisions.

Determining costs of activity pools requires assigning costs accumulated in various account classifications to each of the activity cost pools.This is referred to as ________.

The general approach to activity-based costing systems in service and merchandise companies is very different from the activity-based costing approach used in manufacturing industries.

How do managerial accountants differentiate between the design of a simple-costing system and an activity-based costing system?

Which of the following is not a reason that manufacturing and distribution personnel would implement activity-based costing systems?

Advances in information technology have no impact on the implementation of refined costing systems.

Which of the following is not a reason why managers see an accelerated need for refinement?

The method of management decision making that uses activity-based costing information to improve customer satisfaction and profitability is ________.

A product consumes a high level of resources per unit,but is reported to have a low cost per unit is known as ________.

Beaver's Molding Corporation produces a quantity of 50,000 molds for contractors.The workers produce 220 molds per batch.Compute the total number of batches produced.

A cost hierarchy is useful to managerial accountants because it categorizes various activity cost pools on the basis of the different types of cost drivers,cost-allocation bases,or different degrees of difficulty in determining cause-and-effect relationships.

Why do managers use cost hierarchies? What are the four levels of the cost hierarchy in activity-based costing systems?

When incorrect cost-allocation bases are used ________.

As product diversity and indirect costs increased,broad averaging led to inaccurate product costs.

If a new manager wants to implement activity-based costing systems for the first time,where does he or she begin to consider and implement the system?

Why do some managers in organizations deduct facility-sustaining costs as a separate lump-sum amount from operating income rather than allocate them to products?

The costs of activities that cannot be traced to individual products or services but that support the organization as a whole are ________.

Why is it important for managerial accountants to identify the cost-allocation bases?

Product undercosting occurs when a product consumes a high level of resources per unit but is reported to have a low cost per unit.

The strength of the cause-and-effect relationship between the cost-allocation base and the cost pools are the same across cost pools.

The Manager and Management Accounting

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Process Costing and Cost Allocation

Pricing Decisions, customer Profitability, and Cost Management

Determining How Costs Behave

Decision Making and Relevant Information

Quality, inventory Management, and Time

Capital Investments

Master Budget and Responsibility Accounting

Flexible Budgets, cost Variances, and Management Control

Strategy, Balanced Scorecard, and Strategic Profitability Analysis

Transfer Pricing

Performance Measurement and Compensation

Filters