Question 1

Which of the following is an example of a value-added activity?

Accepted Answer

A) supervision of production workers 
B) inspection of products 
C) scheduling of production 
D) reworking defective units 
A) supervision of production workers 
B) inspection of products 
C) scheduling of production 
D) reworking defective units A

Question 2

What award is made when performance is maintained or exceeds a specific measure?

Accepted Answer

A) bonus 
B) stock option 
C) profit sharing 
D) gainsharing 
A) bonus 
B) stock option 
C) profit sharing 
D) gainsharing A

Question 3

A company keeps 20 days of materials inventory on hand to avoid shutdowns due to materials shortages. Carrying costs average $4,000 per day. A competitor keeps 10 days of inventory on hand, and the competitor’s carrying costs average $2,000 per day.
-Refer to the figure.Moulding costs total $20,000.What are the value-added costs?

Accepted Answer

A) $75,000 
B) $30,000 
C) $20,000 
D) $5,000 
A) $75,000 
B) $30,000 
C) $20,000 
D) $5,000 C

Question 4

A company keeps 20 days of materials inventory on hand to avoid shutdowns due to materials shortages. Carrying costs average $4,000 per day. A competitor keeps 10 days of inventory on hand, and the competitor’s carrying costs average $2,000 per day.
-Refer to the figure.Moulding the materials costs $30,000.What are the value-added costs?

Accepted Answer

A) $80,000 
B) $40,000 
C) $30,000 
D) $20,000 
A) $80,000 
B) $40,000 
C) $30,000 
D) $20,000

Question 5

What is the definition of process improvement?

Accepted Answer

A) The performance of a process to achieve major improvements. 
B) The adoption of new processes to meet strategic objectives. 
C) The incremental or continual increases in the efficiency of a process. 
D) The expression of performance measures in financial terms. 
A) The performance of a process to achieve major improvements. 
B) The adoption of new processes to meet strategic objectives. 
C) The incremental or continual increases in the efficiency of a process. 
D) The expression of performance measures in financial terms.

Question 6

What technique improves performance of activities and processes by searching for best practices?

Accepted Answer

A) value-added reporting 
B) kaizen costing 
C) trend reporting 
D) benchmarking 
A) value-added reporting 
B) kaizen costing 
C) trend reporting 
D) benchmarking

Question 7

What does activity-based management attempt to do?

Accepted Answer

A) identify and eliminate all unnecessary activities 
B) decrease the efficiency of necessary activities 
C) add new activities that decrease value 
D) use a single overhead pool to allocate shared costs 
A) identify and eliminate all unnecessary activities 
B) decrease the efficiency of necessary activities 
C) add new activities that decrease value 
D) use a single overhead pool to allocate shared costs

Question 8

Which of the following is a reason for managerial activity to be considered a value-added activity?

Accepted Answer

A) It brings about a change of state. 
B) It fixes defective units. 
C) It inspects the quality of the units. 
D) It repeats a previous activity. 
A) It brings about a change of state. 
B) It fixes defective units. 
C) It inspects the quality of the units. 
D) It repeats a previous activity.

Question 9

Friedrich Company has developed ideal standards for four activities: labour, materials, inspection, and receiving.
Information is as follows:
$\begin{array}{llccc}
\underline{\text { Activity }} &\underline{ \text { Activity Driver }} & \underline{\text {S Q}} & \underline{\text {A Q}}&\underline{\text {SP}}\
\text { Inspection } & \text { Inspection hours } & 0 & 40,000&\$4 \
\text { Labour } & \text { Hours } & 50,000 & 56,000&6 \
\text { Materials } & \text { Kilograms } & 100,000 & 105,000 &5\
\text { Receiving } & \text { Orders } & 150 & 190&150
\end{array}$

The actual prices paid per unit of each activity driver were equal to the standard prices.
-Refer to the figure.What are the non-value-added costs for labour?

Accepted Answer

A) $300,000 
B) $36,000 
C) $28,000 
D) $25,000 
A) $300,000 
B) $36,000 
C) $28,000 
D) $25,000

Question 10

What sequence defines the continuous improvement subcycle of kaizen costing?

Accepted Answer

A) check-do-plan-act 
B) do-check-plan-act 
C) plan-do-check-act 
D) establish-check-act-do 
A) check-do-plan-act 
B) do-check-plan-act 
C) plan-do-check-act 
D) establish-check-act-do

Question 11

What are processes?

Accepted Answer

A) tasks that must be completed to do work 
B) outcomes of activities 
C) activities linked to perform a specific objective 
D) the linked set of value-creating activities from disposal of materials to disposal of the finished product by end consumers 
A) tasks that must be completed to do work 
B) outcomes of activities 
C) activities linked to perform a specific objective 
D) the linked set of value-creating activities from disposal of materials to disposal of the finished product by end consumers

Question 12

What sequence defines the maintenance subcycle?

Accepted Answer

A) establish-do-check-act 
B) establish-act-do-check 
C) do-act-establish-check 
D) check-do-plan-act 
A) establish-do-check-act 
B) establish-act-do-check 
C) do-act-establish-check 
D) check-do-plan-act

Question 13

What is kaizen costing? How does activity analysis help reduce costs?

Accepted Answer

Kaizen costing is the effort to reduce c

Question 14

A company has 5 days of finished goods inventory on hand to avoid stockouts.The carrying costs of the inventory average $5,000 per day.What are the value-added costs?

Accepted Answer

A) $1,000 
B) $5,000 
C) $15,000 
D) $25,000 
A) $1,000 
B) $5,000 
C) $15,000 
D) $25,000

Question 15

Friedrich Company has developed ideal standards for four activities: labour, materials, inspection, and receiving.
Information is as follows:
$\begin{array}{llccc}
\underline{\text { Activity }} &\underline{ \text { Activity Driver }} & \underline{\text {S Q}} & \underline{\text {A Q}}&\underline{\text {SP}}\
\text { Inspection } & \text { Inspection hours } & 0 & 40,000&\$4 \
\text { Labour } & \text { Hours } & 50,000 & 56,000&6 \
\text { Materials } & \text { Kilograms } & 100,000 & 105,000 &5\
\text { Receiving } & \text { Orders } & 150 & 190&150
\end{array}$

The actual prices paid per unit of each activity driver were equal to the standard prices.
-Refer to the figure.What are the value-added costs for materials?

Accepted Answer

A) $525,000 
B) $500,000 
C) $50,000 
D) $25,000 
A) $525,000 
B) $500,000 
C) $50,000 
D) $25,000

Question 16

Rollo Company has developed cost formulas for the drivers of the following production activities:
$$\begin{array} { l l c c } 
\text { Driver } & \text { Activits } & \text { Fixed } & \text { Variale } \
\hline \text { Labour hours } & \text { Materials } & \$ 0 & \$ 20 \
\text { Labour hours } & \text { Labour } & 0 & 10 \
\text { Machine hours } & \text { Maintenance } & 10,000 & 8 \
\text { Machine hours } & \text { Machiring } & 50,000 & 2 \
\text { Number of setups } & \text { Inspections } & 30,000 & 200 \
\text { Number of setups } & \text { Setups } & 0 & 300 \
\text { Number of purchase arders } & \text { Purchasing } & 75,00 & 3
\end{array}$$
-Refer to the figure.The activity levels are projected to be as follows: $$\begin{array} { l r } 
\text { Labour hours } & 1,000 \
\text { Machine hours } & 5,000 \
\text { Setups } & 100 \
\text { Purchase orders } & 50
\end{array}$$ What is budgeted for this projected activity level?

Accepted Answer

A) $3,504,450 
B) $1,655,430 
C) $295,150 
D) $165,543 
A) $3,504,450 
B) $1,655,430 
C) $295,150 
D) $165,543

Question 17

Which of the following is part of the cost dimension of the activity-based management model?

Accepted Answer

A) suppliers 
B) driver analysis 
C) budgeting 
D) cost objects 
A) suppliers 
B) driver analysis 
C) budgeting 
D) cost objects

Question 18

Larry Corporation has developed ideal standards for four activities: labour, materials, inspection, and receiving. Information is as follows:
$\begin{array}{llccc}
\underline{\text { Activity }} &\underline{ \text { Activity Driver }} & \underline{\text {S Q}} & \underline{\text {A Q}}&\underline{\text {SP}}\
\text { Inspection } & \text { Inspection hours } & 0 & 40,000&\$12 \
\text { Labour } & \text { Hours } & 50,000 & 56,000&18 \
\text { Materials } & \text { Kilograms } & 100,000 & 105,000 &15\
\text { Receiving } & \text { Orders } & 150 & 190&450
\end{array}$
 The actual prices paid per unit of each activity driver were equal to the standard prices.
-Refer to the figure.What are the value-added costs for labour?

Accepted Answer

A) $900,000 
B) $792,000 
C) $84,000 
D) $75,000 
A) $900,000 
B) $792,000 
C) $84,000 
D) $75,000

Question 19

Larry Corporation has developed ideal standards for four activities: labour, materials, inspection, and receiving. Information is as follows:
$\begin{array}{llccc}
\underline{\text { Activity }} &\underline{ \text { Activity Driver }} & \underline{\text {S Q}} & \underline{\text {A Q}}&\underline{\text {SP}}\
\text { Inspection } & \text { Inspection hours } & 0 & 40,000&\$12 \
\text { Labour } & \text { Hours } & 50,000 & 56,000&18 \
\text { Materials } & \text { Kilograms } & 100,000 & 105,000 &15\
\text { Receiving } & \text { Orders } & 150 & 190&450
\end{array}$
 The actual prices paid per unit of each activity driver were equal to the standard prices.
-Refer to the figure.What are the non-value-added costs for inspection?

Accepted Answer

A) $480,000 
B) $420,000 
C) $60,000 
D) $40,000 
A) $480,000 
B) $420,000 
C) $60,000 
D) $40,000

Question 20

Which of the following is part of the process dimension of the activity-based management model?

Accepted Answer

A) driver analysis,activity analysis,and resources 
B) driver analysis,cost objectives,and performance measurement 
C) resources,activity analysis,and performance measurement 
D) driver analysis,activity analysis,and performance measurement 
A) driver analysis,activity analysis,and resources 
B) driver analysis,cost objectives,and performance measurement 
C) resources,activity analysis,and performance measurement 
D) driver analysis,activity analysis,and performance measurement

Which of the following is an example of a value-added activity?

What award is made when performance is maintained or exceeds a specific measure?

What is the definition of process improvement?

What technique improves performance of activities and processes by searching for best practices?

What does activity-based management attempt to do?

Which of the following is a reason for managerial activity to be considered a value-added activity?

What sequence defines the continuous improvement subcycle of kaizen costing?

What are processes?

What sequence defines the maintenance subcycle?

What is kaizen costing? How does activity analysis help reduce costs?

A company has 5 days of finished goods inventory on hand to avoid stockouts.The carrying costs of the inventory average $5,000 per day.What are the value-added costs?

Which of the following is part of the cost dimension of the activity-based management model?

Which of the following is part of the process dimension of the activity-based management model?

A: Basic Cost Management Concepts

B: Basic Cost Management Concepts

Cost Behaviour

Cost-Volume-Profit Analysis

Job-Order Costing Systems

Process Costing

Activity-Based Costing

Allocating Costs of Support Departments and Joint Products

Budgeting for Planning and Control

Standard Costing: a Functional-Based Control Approach

Responsibility Accounting,performance Evaluation,and Transfer Pricing

Tactical Decision Making

Pricing and Profitability Analysis

Strategic Cost Management

The Balanced Scorecard: Strategic-Based Control

Quality and Environmental Cost Management

Lean Accounting and Productivity Measurement

Inventory Management: Economic Order Quantity,jit,and the Theory of Constraints

Filters

Exam 14: Activity-Based Management

Which of the following is an example of a value-added activity?

What award is made when performance is maintained or exceeds a specific measure?

What is the definition of process improvement?

What technique improves performance of activities and processes by searching for best practices?

What does activity-based management attempt to do?

Which of the following is a reason for managerial activity to be considered a value-added activity?

What sequence defines the continuous improvement subcycle of kaizen costing?

What are processes?

What sequence defines the maintenance subcycle?

What is kaizen costing? How does activity analysis help reduce costs?

A company has 5 days of finished goods inventory on hand to avoid stockouts.The carrying costs of the inventory average $5,000 per day.What are the value-added costs?

Which of the following is part of the cost dimension of the activity-based management model?

Which of the following is part of the process dimension of the activity-based management model?

A: Basic Cost Management Concepts

B: Basic Cost Management Concepts

Cost Behaviour

Cost-Volume-Profit Analysis

Job-Order Costing Systems

Process Costing

Activity-Based Costing

Allocating Costs of Support Departments and Joint Products

Budgeting for Planning and Control

Standard Costing: a Functional-Based Control Approach

Responsibility Accounting,performance Evaluation,and Transfer Pricing

Tactical Decision Making

Pricing and Profitability Analysis

Strategic Cost Management

The Balanced Scorecard: Strategic-Based Control

Quality and Environmental Cost Management

Lean Accounting and Productivity Measurement

Inventory Management: Economic Order Quantity,jit,and the Theory of Constraints

Filters