Question 1

The process of choosing among different sets of activities caused by competing strategies refers to

Accepted Answer

A)  activity drivers. 
B)  activity inputs. 
C)  activity outputs. 
D)  activity selection. 
A)  activity drivers. 
B)  activity inputs. 
C)  activity outputs. 
D)  activity selection. D

Question 2

Which is defined as a category of quality-related costs?

Accepted Answer

A)  invention 
B)  controller 
C)  internal control 
D)  external failure 
E)  None of these. 
A)  invention 
B)  controller 
C)  internal control 
D)  external failure 
E)  None of these. D

Question 3

Match each item with the correct statement below.
-The number of times an activity is performed.

Accepted Answer

A) activity analysis 
B) value-added costs 
C) velocity 
D) activity inputs 
E) activity output measure
F)activity output 
A) activity analysis 
B) value-added costs 
C) velocity 
D) activity inputs 
E) activity output measure
F)activity output E

Question 4

Quality improvement can increase profitability by decreasing costs.

Accepted Answer

A) True 
 B)False

Question 5

Activity elimination focuses on nonvalue-added activities.

Accepted Answer

A) True 
 B)False

Question 6

Costs that are caused by the inefficient performance of value-added activities are value added costs.

Accepted Answer

A) True 
 B)False

Question 7

The length of time it takes to produce a unit of output from the time raw materials are received until the good is delivered to finished goods inventory.

Accepted Answer

A) cycle time 
B) direct tracing 
C) activity sharing 
D) driver tracing 
E) value-added activities
F)activity selection 
A) cycle time 
B) direct tracing 
C) activity sharing 
D) driver tracing 
E) value-added activities
F)activity selection

Question 8

Control activities are performed by an organization to prevent or detect poor quality.

Accepted Answer

A) True 
 B)False

Question 9

A factory produces 124,000 televisions per quarter. A total of 8,000 production hours are used within the factory per quarter. Compute the velocity in units per hour.

Accepted Answer

A)  16 units per hour 
B)  15 units per hour 
C)  15.5 units per hour 
D)  18 units per hour 
A)  16 units per hour 
B)  15 units per hour 
C)  15.5 units per hour 
D)  18 units per hour

Question 10

A factory produces 124,000 televisions per quarter. A total of 8,000 production hours are used within the factory per quarter. Calculate the cycle time in minutes.

Accepted Answer

A)  3.92 
B)  3.87 
C)  3.75 
D)  3.83 
A)  3.92 
B)  3.87 
C)  3.75 
D)  3.83

Question 11

Figure 7-1.The receiving department of Owen has three activities: unloading, counting goods, and inspecting. Unloading requires a forklift that is leased for $15,000 per year. The forklift is used only for unloading. The fuel for the forklift is $2,000 per year. Inspection requires special testing equipment that has a depreciation of $500 per year and an operating cost of $1,000 per year. Receiving has four employees who each have an average salary of $35,000 per year. The work distribution matrix for the receiving personnel is as follows:
  
-Which of the following is not a possible source of customer diversity?

Accepted Answer

A)  sales support 
B)  order frequency 
C)  delivery frequency 
D)  geographic distance 
E)  Pricing 
A)  sales support 
B)  order frequency 
C)  delivery frequency 
D)  geographic distance 
E)  Pricing

Question 12

Cleaning up a polluted lake or an oil spill are examples of __________________ costs.

Accepted Answer

realized e

Question 13

Costs incurred to determine whether products and services are conforming to their requirements or customer needs are

Accepted Answer

A)  prevention costs. 
B)  appraisal costs. 
C)  internal failure costs. 
D)  external failure costs. 
E)  a different category of quality related costs. 
A)  prevention costs. 
B)  appraisal costs. 
C)  internal failure costs. 
D)  external failure costs. 
E)  a different category of quality related costs.

Question 14

Field trials and quality engineering are examples of ____.

Accepted Answer

A)  prevention costs 
B)  appraisal costs 
C)  failure costs 
D)  quality costs 
E)  value costs 
A)  prevention costs 
B)  appraisal costs 
C)  failure costs 
D)  quality costs 
E)  value costs

Question 15

Each unit of a product requires four components. The average number of components is 4.25 due to component failure. Purchasing higher quality components can reduce the average number of components to four per unit. The cost per component is $350. Calculate the reduction in failure costs per unit due to purchasing higher quality components.

Accepted Answer

A)  $43.75 
B)  $350 
C)  $175 
D)  $87.50 
E)  $372 
A)  $43.75 
B)  $350 
C)  $175 
D)  $87.50 
E)  $372

Question 16

The activity driver for the shipping activity is the number of orders shipped. Product A uses 20 orders and Product B uses 60 orders. Calculate the consumption ratios for each product.

Accepted Answer

A)  0.3; 0.7 
B)  0.625; 0.375 
C)  0.25; 0.75 
D)  0.215; 0.785 
A)  0.3; 0.7 
B)  0.625; 0.375 
C)  0.25; 0.75 
D)  0.215; 0.785

Question 17

One of the questions answered by activity analysis should be "What activities are done?"

Accepted Answer

A) True 
 B)False

Question 18

Zero defects means that most products conform to specifications.

Accepted Answer

A) True 
 B)False

Question 19

Figure 7-3.Hamilton Company manufactures engines. Hamilton produces all the parts necessary for its engines except for one electronic component, which is purchased from two local suppliers: Traynor Inc. and Bello Company. Both suppliers are reliable and rarely deliver late; however, Traynor sells the component for $10.00 per unit and Bello sells the same component for $8.95. Hamilton purchases 70% of its components from Bello, because of the lower price. The total annual demand is 75,000 units.    
-Refer to Figure 7-3. Calculate the activity rate for reworking products based on rework hours. Round to the nearest whole dollar.

Accepted Answer

A)  $599 per hour 
B)  $595 per hour 
C)  $602 per hour 
D)  $605 per hour 
E)  $622 per hour 
A)  $599 per hour 
B)  $595 per hour 
C)  $602 per hour 
D)  $605 per hour 
E)  $622 per hour

Question 20

____ is present whenever products have different consumption ratios for different overhead activities.

Accepted Answer

A)  Environmental costs 
B)  Activity sharing 
C)  Product diversity 
D)  Activity inputs 
E)  Control costs 
A)  Environmental costs 
B)  Activity sharing 
C)  Product diversity 
D)  Activity inputs 
E)  Control costs

The process of choosing among different sets of activities caused by competing strategies refers to

Which is defined as a category of quality-related costs?

Match each item with the correct statement below. -The number of times an activity is performed.

Quality improvement can increase profitability by decreasing costs.

Activity elimination focuses on nonvalue-added activities.

Costs that are caused by the inefficient performance of value-added activities are value added costs.

The length of time it takes to produce a unit of output from the time raw materials are received until the good is delivered to finished goods inventory.

Control activities are performed by an organization to prevent or detect poor quality.

A factory produces 124,000 televisions per quarter. A total of 8,000 production hours are used within the factory per quarter. Compute the velocity in units per hour.

A factory produces 124,000 televisions per quarter. A total of 8,000 production hours are used within the factory per quarter. Calculate the cycle time in minutes.

Cleaning up a polluted lake or an oil spill are examples of __________________ costs.

Costs incurred to determine whether products and services are conforming to their requirements or customer needs are

Field trials and quality engineering are examples of ____.

The activity driver for the shipping activity is the number of orders shipped. Product A uses 20 orders and Product B uses 60 orders. Calculate the consumption ratios for each product.

One of the questions answered by activity analysis should be "What activities are done?"

Zero defects means that most products conform to specifications.

____ is present whenever products have different consumption ratios for different overhead activities.

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behavior

Cost-Volume-Profit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Absorption and Variable Costing, and Inventory Management

Profit Planning

Standard Costing: a Managerial Control Tool

Flexible Budgets and Overhead Analysis

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Statement of Cash Flows

Financial Statement Analysis

Filters

Exam 7: Activity-Based Costing and Management

The process of choosing among different sets of activities caused by competing strategies refers to

Which is defined as a category of quality-related costs?

Match each item with the correct statement below. -The number of times an activity is performed.

Quality improvement can increase profitability by decreasing costs.

Activity elimination focuses on nonvalue-added activities.

Costs that are caused by the inefficient performance of value-added activities are value added costs.

The length of time it takes to produce a unit of output from the time raw materials are received until the good is delivered to finished goods inventory.

Control activities are performed by an organization to prevent or detect poor quality.

A factory produces 124,000 televisions per quarter. A total of 8,000 production hours are used within the factory per quarter. Compute the velocity in units per hour.

A factory produces 124,000 televisions per quarter. A total of 8,000 production hours are used within the factory per quarter. Calculate the cycle time in minutes.

Cleaning up a polluted lake or an oil spill are examples of __________________ costs.

Costs incurred to determine whether products and services are conforming to their requirements or customer needs are

Field trials and quality engineering are examples of ____.

The activity driver for the shipping activity is the number of orders shipped. Product A uses 20 orders and Product B uses 60 orders. Calculate the consumption ratios for each product.

One of the questions answered by activity analysis should be "What activities are done?"

Zero defects means that most products conform to specifications.

____ is present whenever products have different consumption ratios for different overhead activities.

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behavior

Cost-Volume-Profit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Absorption and Variable Costing, and Inventory Management

Profit Planning

Standard Costing: a Managerial Control Tool

Flexible Budgets and Overhead Analysis

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Statement of Cash Flows

Financial Statement Analysis

Filters