Question 1

Unit-level activities are performed each time a unit is produced.

Accepted Answer

A) True 
 B)False

Question 2

____ activities are unnecessary activities.

Accepted Answer

A)  Frivolous 
B)  Nonvalue-added 
C)  Expensive 
D)  Under-performing 
E)  None of these. 
A)  Frivolous 
B)  Nonvalue-added 
C)  Expensive 
D)  Under-performing 
E)  None of these.

Question 3

Producing 10,000 units of a cell phone requires $300,000 of prime costs, uses 2,000 machine hours, and takes 1,200 setup hours. The activity rates are $40 per machine hour and $100 per setup hour. What is the unit cost of a cell phone?

Accepted Answer

A)  $60 
B)  $40 
C)  $50 
D)  $100 
E)  $30 
A)  $60 
B)  $40 
C)  $50 
D)  $100 
E)  $30

Question 4

Stinler Corporation manufactures curtains for retail stores and for individual customers. The retail chain buys 70% of the curtains produced. The individual customers purchase curtains in approximately equal quantities, where the orders are about the same size. Data concerning Stinler's customer activity are as follows:
   Currently customer-driven costs are assigned to customers based on units sold, a unit-level driver.
Required:
A. Assign costs to customers by using an ABC approach.
B. Determine the selling (order filling and sales force) cost per unit sold for each type of customer.

Accepted Answer

A.
 @#IMG-DLM& @#IMG-DLM& @#IMG-DLM& B.
Cost per unit purcha

Question 5

Costs incurred to prevent poor quality in the products or services being produced 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 6

The moving activity has an expected cost of $160,000. Expected direct labor hours are 40,000, and the expected number of moves is 80,000. The best activity rate for moving is

Accepted Answer

A)  $4 per move. 
B)  $1.33 per hour-move. 
C)  $4 per hour. 
D)  $2 per move. 
A)  $4 per move. 
B)  $1.33 per hour-move. 
C)  $4 per hour. 
D)  $2 per move.

Question 7

Heedy Company makes a product using two departments -Department 1 and Department 2. Information on these departments is as follows:

Accepted Answer

The answer of Heedy Company makes a product using two...

Question 8

____________________ are financial and nonfinancial information items that describe individual activities.

Accepted Answer

The answer of ____________________ are financial and nonfinancial information items...

Question 9

Flynn Company has a JIT system in place. Each manufacturing cell is dedicated to the production of a single product or major subassembly. One cell, dedicated to the production of guitar pickups, has four operations: machining, finishing, assembly, and testing.
For the coming year, the pickup cell has the following budgeted costs and cell time (both at theoretical capacity):
   During the year, the following actual results were obtained:

Accepted Answer

The answer of Flynn Company has a JIT system in...

Question 10

Activity inputs are the resources consumed by the activity in producing its output.

Accepted Answer

A) True 
 B)False

Question 11

Figure 7-2.Steller Manufacturing has two classes of distributors: JIT distributors and non-JIT distributors. The JIT distributor places small, frequent orders and the non-JIT distributor tends to place larger, less frequent orders. Both types of distributors purchase the same product. The customer activities and costs for the previous quarter are found below:
  
-Refer to Figure 7-2. Calculate the total customer cost for the non-JIT distributor.

Accepted Answer

A)  $150,025 
B)  $122,500 
C)  $175,200 
D)  $138,247 
E)  $178,791 
A)  $150,025 
B)  $122,500 
C)  $175,200 
D)  $138,247 
E)  $178,791

Question 12

Match each item with the correct statement below.
-Factors that measure the consumption of resources by activities.

Accepted Answer

A) activity drivers 
B) activity-based costing system 
C) consumption ratio 
D) unit-level activities 
E) activity attributes
F)resource drivers 
A) activity drivers 
B) activity-based costing system 
C) consumption ratio 
D) unit-level activities 
E) activity attributes
F)resource drivers

Question 13

The cost of recalls would be an example of a(n) ____________________.

Accepted Answer

external f

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 cost per component associated with using Bello Company as the supplier.

Accepted Answer

A)  $12.00 
B)  $8.95 
C)  $84.26 
D)  $15.74 
E)  $86.25 
A)  $12.00 
B)  $8.95 
C)  $84.26 
D)  $15.74 
E)  $86.25

Question 15

Factors that measure the consumption of activities by products and other cost objects are value-added costs.

Accepted Answer

A) True 
 B)False

Question 16

Charlotte Company produces folding chairs. It takes the company 18,000 hours to produce 90,000 chairs.
Required:
A. What is the velocity in hours?
B. What is the cycle time in hours?

Accepted Answer

Velocity = 90,000 chairs/18,00

Question 17

Packaging inspection and process acceptance are examples of ____.

Accepted Answer

A)  external failure costs 
B)  prevention costs 
C)  internal failure costs 
D)  value costs 
E)  appraisal costs 
A)  external failure costs 
B)  prevention costs 
C)  internal failure costs 
D)  value costs 
E)  appraisal costs

Question 18

Complying with the filing requirements of the IRS is an example of a

Accepted Answer

A)  recreational activity. 
B)  discretionary activity. 
C)  recommended activity. 
D)  required activity. 
A)  recreational activity. 
B)  discretionary activity. 
C)  recommended activity. 
D)  required activity.

Question 19

____ is the length of time required to produce one product; ____ is the number of units that can be produced in a given period of time.

Accepted Answer

A)  Cycle time; velocity 
B)  Velocity; cycle time 
C)  Activity time; cycle production 
D)  Cycle time; activity output 
E)  Velocity; cycle production 
A)  Cycle time; velocity 
B)  Velocity; cycle time 
C)  Activity time; cycle production 
D)  Cycle time; activity output 
E)  Velocity; cycle production

Question 20

Match each item with the correct statement below.
-Costs necessary to perform value-added activities with perfect efficiency.

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

Unit-level activities are performed each time a unit is produced.

____ activities are unnecessary activities.

Producing 10,000 units of a cell phone requires $300,000 of prime costs, uses 2,000 machine hours, and takes 1,200 setup hours. The activity rates are $40 per machine hour and $100 per setup hour. What is the unit cost of a cell phone?

Costs incurred to prevent poor quality in the products or services being produced are

The moving activity has an expected cost of $160,000. Expected direct labor hours are 40,000, and the expected number of moves is 80,000. The best activity rate for moving is

Heedy Company makes a product using two departments -Department 1 and Department 2. Information on these departments is as follows:

____________________ are financial and nonfinancial information items that describe individual activities.

Activity inputs are the resources consumed by the activity in producing its output.

Match each item with the correct statement below. -Factors that measure the consumption of resources by activities.

The cost of recalls would be an example of a(n) ____________________.

Factors that measure the consumption of activities by products and other cost objects are value-added costs.

Charlotte Company produces folding chairs. It takes the company 18,000 hours to produce 90,000 chairs. Required: A. What is the velocity in hours? B. What is the cycle time in hours?

Packaging inspection and process acceptance are examples of ____.

Complying with the filing requirements of the IRS is an example of a

is the length of time required to produce one product; is the number of units that can be produced in a given period of time.

Match each item with the correct statement below. -Costs necessary to perform value-added activities with perfect efficiency.

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

Unit-level activities are performed each time a unit is produced.

____ activities are unnecessary activities.

Producing 10,000 units of a cell phone requires $300,000 of prime costs, uses 2,000 machine hours, and takes 1,200 setup hours. The activity rates are $40 per machine hour and $100 per setup hour. What is the unit cost of a cell phone?

Costs incurred to prevent poor quality in the products or services being produced are

The moving activity has an expected cost of $160,000. Expected direct labor hours are 40,000, and the expected number of moves is 80,000. The best activity rate for moving is

Heedy Company makes a product using two departments -Department 1 and Department 2. Information on these departments is as follows:

____________________ are financial and nonfinancial information items that describe individual activities.

Activity inputs are the resources consumed by the activity in producing its output.

Match each item with the correct statement below. -Factors that measure the consumption of resources by activities.

The cost of recalls would be an example of a(n) ____________________.

Factors that measure the consumption of activities by products and other cost objects are value-added costs.

Charlotte Company produces folding chairs. It takes the company 18,000 hours to produce 90,000 chairs. Required: A. What is the velocity in hours? B. What is the cycle time in hours?

Packaging inspection and process acceptance are examples of ____.

Complying with the filing requirements of the IRS is an example of a

____ is the length of time required to produce one product; ____ is the number of units that can be produced in a given period of time.

Match each item with the correct statement below. -Costs necessary to perform value-added activities with perfect efficiency.

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

is the length of time required to produce one product; is the number of units that can be produced in a given period of time.