Question 1

Activity-based management attempts to

Accepted Answer

A)  identify and eliminate all unnecessary activities. 
B)  increase the efficiency of necessary activities. 
C)  add new activities that increase value. 
D)  do all of these. 
A)  identify and eliminate all unnecessary activities. 
B)  increase the efficiency of necessary activities. 
C)  add new activities that increase value. 
D)  do all of these.

Question 2

Refer to Figure 7-8. Sallisaw uses an activity-based costing system. The activity rate for opening and closing statements is based on the number of accounts opened and closed. The activity rate for issuing monthly statements is based on the number of statements issued. The activity rate for processing transactions is based on the number of transactions processed. The activity rate for customer inquiries is based on the number of telephone minutes. The rate for ATM services is based on the number of ATM transactions.

Accepted Answer

The answer of Refer to Figure 7-8. Sallisaw uses an...

Question 3

Match each item with the correct statement below.
-Process that answers the question "How many people perform the activities?"

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

Question 4

A company spends $12,000 a year for inspecting, $41,000 for purchasing, and $22,000 for reworking products. A good estimate of nonvalue-added costs would be:

Accepted Answer

A)  $22,000 
B)  $34,000 
C)  $41,000 
D)  $33,000 
E)  $55,000 
A)  $22,000 
B)  $34,000 
C)  $41,000 
D)  $33,000 
E)  $55,000

Question 5

Figure 7-6.Xander Company produces televisions. One of its plants produces two versions of televisions: a basic model and a premium model. At the beginning of the year, the following data were prepared for the plant:
   Additionally, the following overhead activity costs are reported:
   Xander uses activity-based costing to calculate product cost.
-Refer to Figure 7-6.

Accepted Answer

The answer of Figure 7-6.Xander Company produces televisions. One of...

Question 6

Setups, material handling, and inspection are all possible examples of

Accepted Answer

A)  product diversity. 
B)  unit level overhead activities. 
C)  nonunit-level overhead activities. 
D)  sustainable development. 
E)  None of these. 
A)  product diversity. 
B)  unit level overhead activities. 
C)  nonunit-level overhead activities. 
D)  sustainable development. 
E)  None of these.

Question 7

Figure 7-5.Rizzo Manufacturing produces two types of cameras: 35mm and digital. The cameras are produced using one continuous process. Four activities have been identified: machining, setups, receiving, and packing. Resource drivers have been used to assign costs to each activity. The overhead activities, their costs, and the other related data are as follows:
  
-Refer to Figure 7-5. Using an activity rate for receiving based on receiving orders, assign receiving costs to the 35mm camera.

Accepted Answer

A)  $1,800 
B)  $2,000 
C)  $1,600 
D)  $1,200 
E)  $4,000 
A)  $1,800 
B)  $2,000 
C)  $1,600 
D)  $1,200 
E)  $4,000

Question 8

When products consume overhead activities in systematically different proportion due to such things as product size, product complexity, setup time and size of batches this is known as _________________.

Accepted Answer

The answer of When products consume overhead activities in systematically...

Question 9

Refer to Figure 7-8.

Accepted Answer

The answer of Refer to Figure 7-8.
  ...

Question 10

A company was evaluating the activity-based environmental cost of two different products - Product X and Product Y. Information on two environmental activities is as follows:
  Data on Product X and Product Y follows:

Accepted Answer

The answer of A company was evaluating the activity-based environmental...

Question 11

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 inspecting components based on sampling hours.

Accepted Answer

A)  $78 per hour 
B)  $72 per hour 
C)  $77.25 per hour 
D)  $80 per hour 
E)  $76 per hour 
A)  $78 per hour 
B)  $72 per hour 
C)  $77.25 per hour 
D)  $80 per hour 
E)  $76 per hour

Question 12

_____________________ are factors that measure the consumption of activities by products and other cost objects and can be classified as either unit-level or nonunit-level.

Accepted Answer

The answer of _____________________ are factors that measure the consumption...

Question 13

A company has developed a list of quality-related costs as follows:
   The company's controller is pleased with the Year 2 results and commented that the company is now on its way toward total quality. Is the controller right? Explain.

Accepted Answer

A good answer might include the followin

Question 14

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 total activity cost per component associated with using Traynor Inc., as the supplier.

Accepted Answer

A)  $15.75 
B)  $10.00 
C)  $19.38 
D)  $20.00 
E)  $22.80 
A)  $15.75 
B)  $10.00 
C)  $19.38 
D)  $20.00 
E)  $22.80

Question 15

The Thompson Company uses activity-based costing to determine product cost. Three activities and their rates have been calculated as shown below.
   Thompson provided the following data from the job order cost sheet for Job #345

Accepted Answer

The answer of The Thompson Company uses activity-based costing to...

Question 16

The process of decreasing the time and resources required by an activity is known as

Accepted Answer

A)  activity reduction. 
B)  activity output measure. 
C)  activity attributes. 
D)  activity analysis. 
A)  activity reduction. 
B)  activity output measure. 
C)  activity attributes. 
D)  activity analysis.

Question 17

Figure 7-4.Honeydew Company produces two products, a high end laptop computer under the label Bunsen Laptops, and an inexpensive desktop computer under the label Beaker Computers. The two products use two overhead activities, with the following costs:
   The controller has collected the expected annual prime costs for each product, the machine hours, the setup hours, and the expected production.  
-Refer to Figure 7-4. Calculate the overhead cost per unit for each Beaker Computer, using overhead rates based on machine hours and setup hours.

Accepted Answer

A)  $6.10 per unit 
B)  $4.50 per unit 
C)  $5.75 per unit 
D)  $3.88 per unit 
A)  $6.10 per unit 
B)  $4.50 per unit 
C)  $5.75 per unit 
D)  $3.88 per unit

Question 18

Activity analysis is the effort expended to identify those factors that are the root causes of activity costs.

Accepted Answer

A) True 
 B)False

Question 19

Discretionary activities are necessary to comply with legal mandates.

Accepted Answer

A) True 
 B)False

Question 20

A company will sometimes use a ____________________ which identifies the amount of labor consumed by each activity.

Accepted Answer

work distr

Activity-based management attempts to

Match each item with the correct statement below. -Process that answers the question "How many people perform the activities?"

A company spends $12,000 a year for inspecting, $41,000 for purchasing, and $22,000 for reworking products. A good estimate of nonvalue-added costs would be:

Setups, material handling, and inspection are all possible examples of

When products consume overhead activities in systematically different proportion due to such things as product size, product complexity, setup time and size of batches this is known as _________________.

Refer to Figure 7-8.

A company was evaluating the activity-based environmental cost of two different products - Product X and Product Y. Information on two environmental activities is as follows: Data on Product X and Product Y follows:

_____________________ are factors that measure the consumption of activities by products and other cost objects and can be classified as either unit-level or nonunit-level.

A company has developed a list of quality-related costs as follows: The company's controller is pleased with the Year 2 results and commented that the company is now on its way toward total quality. Is the controller right? Explain.

The Thompson Company uses activity-based costing to determine product cost. Three activities and their rates have been calculated as shown below. Thompson provided the following data from the job order cost sheet for Job #345

The process of decreasing the time and resources required by an activity is known as

Activity analysis is the effort expended to identify those factors that are the root causes of activity costs.

Discretionary activities are necessary to comply with legal mandates.

A company will sometimes use a ____________________ which identifies the amount of labor consumed by each activity.

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

Activity-based management attempts to

Match each item with the correct statement below. -Process that answers the question "How many people perform the activities?"

A company spends $12,000 a year for inspecting, $41,000 for purchasing, and $22,000 for reworking products. A good estimate of nonvalue-added costs would be:

Setups, material handling, and inspection are all possible examples of

When products consume overhead activities in systematically different proportion due to such things as product size, product complexity, setup time and size of batches this is known as _________________.

Refer to Figure 7-8.

A company was evaluating the activity-based environmental cost of two different products - Product X and Product Y. Information on two environmental activities is as follows: Data on Product X and Product Y follows:

_____________________ are factors that measure the consumption of activities by products and other cost objects and can be classified as either unit-level or nonunit-level.

A company has developed a list of quality-related costs as follows: The company's controller is pleased with the Year 2 results and commented that the company is now on its way toward total quality. Is the controller right? Explain.

The Thompson Company uses activity-based costing to determine product cost. Three activities and their rates have been calculated as shown below. Thompson provided the following data from the job order cost sheet for Job #345

The process of decreasing the time and resources required by an activity is known as

Activity analysis is the effort expended to identify those factors that are the root causes of activity costs.

Discretionary activities are necessary to comply with legal mandates.

A company will sometimes use a ____________________ which identifies the amount of labor consumed by each activity.

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