Question 1

What is the standard quantity for non-value-added activities that are unnecessary?

Accepted Answer

A) one 
B) zero 
C) actual quantity minus standard price 
D) actual quantity plus standard price 
A) one 
B) zero 
C) actual quantity minus standard price 
D) actual quantity plus standard price

Question 2

What is the major source of information for the activity-based management system?

Accepted Answer

A) driver analysis 
B) an activity-based costing system 
C) a performance measurement system 
D) product information 
A) driver analysis 
B) an activity-based costing system 
C) a performance measurement system 
D) product information

Question 3

Which of the following is an objective of activity-based management?

Accepted Answer

A) to improve decision making through less accurate cost information 
B) to increase the number of activities necessary to perform processes 
C) to encourage cost reduction through continuous improvement 
D) to decrease profitability 
A) to improve decision making through less accurate cost information 
B) to increase the number of activities necessary to perform processes 
C) to encourage cost reduction through continuous improvement 
D) to decrease profitability

Question 4

A firm's warranty costs are $125,000 per year.A competitor's warranty costs are $25,000 per year.What are the non-value-added costs?

Accepted Answer

A) $150,000 
B) $125,000 
C) $100,000 
D) $25,000 
A) $150,000 
B) $125,000 
C) $100,000 
D) $25,000

Question 5

Setup time for a product is 12 hours. A firm that uses JIT and produces the same product has reduced setup time to 1 hour. Setup labour is $6 per hour.
-Refer to the figure.What are the value-added costs?

Accepted Answer

A) $72 
B) $66 
C) $12 
D) $6 
A) $72 
B) $66 
C) $12 
D) $6

Question 6

What incentive specifically relates to sharing the gains from improvements in projects?

Accepted Answer

A) bonuses 
B) stock options 
C) profit sharing 
D) gainsharing 
A) bonuses 
B) stock options 
C) profit sharing 
D) gainsharing

Question 7

Froelech Company has developed capacity standards. Information is as follows:
$\begin{array}{llr}
  \text {Standard cost of the activity capacity acquired  } &\$150,000\
 \text { Standard cost of the activity capacity used  } &100,000\
 \text {  Standard cost of the actual activity used} &120,000
\end{array}$

-Refer to the figure.What is the unused capacity variance?

Accepted Answer

A) $20,000 favourable 
B) $30,000 favourable 
C) $35,000 favourable 
D) $50,000 favourable. 
A) $20,000 favourable 
B) $30,000 favourable 
C) $35,000 favourable 
D) $50,000 favourable.

Question 8

What process dimension of the activity-based management model deals with "how well"?

Accepted Answer

A) resources 
B) driver analysis 
C) activities 
D) performance measures 
A) resources 
B) driver analysis 
C) activities 
D) performance measures

Question 9

Gibson,Inc.,has developed ideal standards for four activities: labour,materials,inspection,and receiving.
Information is as follows:
 $\begin{array}{llrrr}
\text {Activity}&\text {Activity Driver}&\text {SQ}&\text {AQ}&\text {SP}\
\text { Labour } & \text { Hours } & 500 & 550 & \$ 32 \
\text { Materials } & \text { Kilograms } & 2,000 & 2,500 & 48 \
\text { Inspection } & \text { Inspection hours } & 0 & 375 & 22 \
\text { Receiving } & \text { Orders } & 60 & 75 & 800
\end{array}$
 The actual prices paid per unit of each activity driver were equal to the standard prices.
Complete the following cost report.
 $\begin{array}{lcccc}
  \text { Activity } & \text { Value-Added } &\text { Non-value-Added } & \text { Actual }\ 
 \text {Labour  } &\$\underline{\quad\quad}&\$\underline{\quad\quad}&\$\underline{\quad\quad}\
 \text { Materials } &\underline{\quad\quad}&\underline{\quad\quad}&\underline{\quad\quad}\
 \text { Inspection } &\underline{\quad\quad}&\underline{\quad\quad}&\underline{\quad\quad}\
 \text { Receiving } &\underline{\quad\quad}&\underline{\quad\quad}&\underline{\quad\quad}\
 \text {Totals  } &\$\underline{\quad\quad}&\$\underline{\quad\quad}&\$\underline{\quad\quad}\
\end{array}$

Accepted Answer

None

Question 10

What is the term for the effort expended to identify those factors that are the root causes of activity costs?

Accepted Answer

A) activity input 
B) activity output 
C) driver analysis 
D) value-added activity 
A) activity input 
B) activity output 
C) driver analysis 
D) value-added activity

Question 11

Setup time for a product is 12 hours.A firm that uses JIT and produces the same product has reduced setup time by 1 hour.Setup labour is $20 per hour.What would be the currently attainable standard for setup time if the company wants to reduce non-value-added costs by 40 percent next year?

Accepted Answer

A) 7.6 hours 
B) 7.2 hours 
C) 6.6 hours 
D) 4.8 hours 
A) 7.6 hours 
B) 7.2 hours 
C) 6.6 hours 
D) 4.8 hours

Question 12

What technique improves performance of activities and processes by predicting activity costs as activity output changes?

Accepted Answer

A) value-added reporting 
B) activity flexible budgeting 
C) kaizen costing 
D) benchmarking 
A) value-added reporting 
B) activity flexible budgeting 
C) kaizen costing 
D) benchmarking

Question 13

A company has 20 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) $100,000 
B) $10,000 
C) $5,000 
D) $0 
A) $100,000 
B) $10,000 
C) $5,000 
D) $0

Question 14

What is multiplied by standard quantity to equal value-added costs?

Accepted Answer

A) non-value-added costs 
B) currently attainable standards 
C) standard price 
D) actual price 
A) non-value-added costs 
B) currently attainable standards 
C) standard price 
D) actual price

Question 15

What is an activity output measure?

Accepted Answer

A) the activities performed 
B) the number of people performing the activities 
C) the time and resources required to perform the activities 
D) the number of time an activity is performed 
A) the activities performed 
B) the number of people performing the activities 
C) the time and resources required to perform the activities 
D) the number of time an activity is performed

Question 16

Which of the following is a value-added activity?

Accepted Answer

A) moving 
B) inspecting 
C) processing 
D) waiting 
A) moving 
B) inspecting 
C) processing 
D) waiting

Question 17

What technique improves performance of activities and processes by comparing the number of times an activity can be performed to the number actually performed?

Accepted Answer

A) value-added activity reporting 
B) activity flexible budgeting 
C) activity capacity reporting 
D) activity trend reporting 
A) value-added activity reporting 
B) activity flexible budgeting 
C) activity capacity reporting 
D) activity trend reporting

Question 18

A time-and-motion study revealed that it should take 3 hours to produce a product that currently takes 7.5 hours to produce.Labour is $18 per hour.What are the non-value-added costs?

Accepted Answer

A) $81 
B) $54 
C) $27 
D) $18 
A) $81 
B) $54 
C) $27 
D) $18

Question 19

Describe how the activity-based management model combines the process and costing views.What are the steps involved in each? What are the objectives of the activity-based management system?

Accepted Answer

The purpose of activity-based management

Question 20

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.If the actual activity was 20 setups,the actual fixed cost for inspections was $28,000,and the variable cost for inspections was $5,000,what is the total variance for inspections?

Accepted Answer

A) $2,000 favourable 
B) $2,000 unfavourable 
C) $1,000 favourable 
D) $1,000 unfavourable 
A) $2,000 favourable 
B) $2,000 unfavourable 
C) $1,000 favourable 
D) $1,000 unfavourable

What is the standard quantity for non-value-added activities that are unnecessary?

What is the major source of information for the activity-based management system?

Which of the following is an objective of activity-based management?

A firm's warranty costs are $125,000 per year.A competitor's warranty costs are $25,000 per year.What are the non-value-added costs?

Setup time for a product is 12 hours. A firm that uses JIT and produces the same product has reduced setup time to 1 hour. Setup labour is $6 per hour. -Refer to the figure.What are the value-added costs?

What incentive specifically relates to sharing the gains from improvements in projects?

Froelech Company has developed capacity standards. Information is as follows: Standard cost of the activity capacity acquired \1 50,000 Standard cost of the activity capacity used 100,000 Standard cost of the actual activity used 120,000 -Refer to the figure.What is the unused capacity variance?

What process dimension of the activity-based management model deals with "how well"?

What is the term for the effort expended to identify those factors that are the root causes of activity costs?

Setup time for a product is 12 hours.A firm that uses JIT and produces the same product has reduced setup time by 1 hour.Setup labour is $20 per hour.What would be the currently attainable standard for setup time if the company wants to reduce non-value-added costs by 40 percent next year?

What technique improves performance of activities and processes by predicting activity costs as activity output changes?

A company has 20 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?

What is multiplied by standard quantity to equal value-added costs?

What is an activity output measure?

Which of the following is a value-added activity?

What technique improves performance of activities and processes by comparing the number of times an activity can be performed to the number actually performed?

A time-and-motion study revealed that it should take 3 hours to produce a product that currently takes 7.5 hours to produce.Labour is $18 per hour.What are the non-value-added costs?

Describe how the activity-based management model combines the process and costing views.What are the steps involved in each? What are the objectives of the activity-based management system?

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

What is the standard quantity for non-value-added activities that are unnecessary?

What is the major source of information for the activity-based management system?

Which of the following is an objective of activity-based management?

A firm's warranty costs are $125,000 per year.A competitor's warranty costs are $25,000 per year.What are the non-value-added costs?

Setup time for a product is 12 hours. A firm that uses JIT and produces the same product has reduced setup time to 1 hour. Setup labour is $6 per hour. -Refer to the figure.What are the value-added costs?

What incentive specifically relates to sharing the gains from improvements in projects?

Froelech Company has developed capacity standards. Information is as follows: Standard cost of the activity capacity acquired \1 50,000 Standard cost of the activity capacity used 100,000 Standard cost of the actual activity used 120,000 -Refer to the figure.What is the unused capacity variance?

What process dimension of the activity-based management model deals with "how well"?

What is the term for the effort expended to identify those factors that are the root causes of activity costs?

Setup time for a product is 12 hours.A firm that uses JIT and produces the same product has reduced setup time by 1 hour.Setup labour is $20 per hour.What would be the currently attainable standard for setup time if the company wants to reduce non-value-added costs by 40 percent next year?

What technique improves performance of activities and processes by predicting activity costs as activity output changes?

A company has 20 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?

What is multiplied by standard quantity to equal value-added costs?

What is an activity output measure?

Which of the following is a value-added activity?

What technique improves performance of activities and processes by comparing the number of times an activity can be performed to the number actually performed?

A time-and-motion study revealed that it should take 3 hours to produce a product that currently takes 7.5 hours to produce.Labour is $18 per hour.What are the non-value-added costs?

Describe how the activity-based management model combines the process and costing views.What are the steps involved in each? What are the objectives of the activity-based management system?

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