Question 1

The cost of warranty work is an example of what type of cost?

Accepted Answer

A) Prevention cost 
B) Appraisal cost 
C) External failure cost 
D) Internal failure cost 
A) Prevention cost 
B) Appraisal cost 
C) External failure cost 
D) Internal failure cost

Question 2

Costs incurred to avoid manufacturing poor-quality goods or services are considered to be

Accepted Answer

A) appraisal costs. 
B) activity-based costing. 
C) prevention costs. 
D) value engineering. 
A) appraisal costs. 
B) activity-based costing. 
C) prevention costs. 
D) value engineering.

Question 3

The movement of parts is considered a non-value-added activity.

Accepted Answer

A) True 
 B)False

Question 4

Costs incurred to detect poor-quality goods and services refer to

Accepted Answer

A) activity-based costing. 
B) appraisal costs. 
C) value engineering. 
D) prevention costs. 
A) activity-based costing. 
B) appraisal costs. 
C) value engineering. 
D) prevention costs.

Question 5

Costs incurred in detecting poor quality goods or services are what type of costs?

Accepted Answer

A) External failure costs 
B) Appraisal costs 
C) Internal failure costs 
D) Prevention costs 
A) External failure costs 
B) Appraisal costs 
C) Internal failure costs 
D) Prevention costs

Question 6

Platinum Company manufactures several different products and uses an activity-based costing system.Information from its system for the year for all products follows:  
The annual production and sales of one of its products,the Zinger,are 800 units.The following data relate to the production and sales of Widgets in the most recent year:
 
What is the average cost of one Zinger?

Accepted Answer

A) $25.01 
B) $158.19 
C) $236.70 
D) $208.21 
A) $25.01 
B) $158.19 
C) $236.70 
D) $208.21

Question 7

Which term listed below describes a system where companies purchase raw materials when needed in production and complete finished goods when needed by customers?

Accepted Answer

A) Internal failure costs 
B) Backflush costing 
C) Just-in-time 
D) External failure costs 
A) Internal failure costs 
B) Backflush costing 
C) Just-in-time 
D) External failure costs

Question 8

Vintage Fun reproduces old-fashioned style roller skates and skateboards.The annual production and sales of roller skates is 950 units,while 1,750 skateboards are produced and sold.The company has traditionally used direct labor hours to allocate its overhead to products.Roller skates require 2.5 direct labor hours per unit,while skateboards require 1.25 direct labor hours per unit.The total estimated overhead for the period is $114,300.The company is looking at the possibility of changing to an activity-based costing system for its products.If the company used an activity-based costing system,it would have the following three activity cost pools:  
The overhead cost per skateboard using the traditional costing system would be closest to:

Accepted Answer

A) $31.32. 
B) $25.05. 
C) $65.31. 
D) $9.31. 
A) $31.32. 
B) $25.05. 
C) $65.31. 
D) $9.31.

Question 9

In using an ABC system,all of the following steps are performed before the company's year begins except

Accepted Answer

A) identify the primary activities and estimate a total cost pool for each. 
B) select an allocation base for each activity. 
C) allocate the costs to the cost object using the activity cost allocation rates. 
D) calculate an activity cost allocation rate for each activity. 
A) identify the primary activities and estimate a total cost pool for each. 
B) select an allocation base for each activity. 
C) allocate the costs to the cost object using the activity cost allocation rates. 
D) calculate an activity cost allocation rate for each activity.

Question 10

Carrol Company,which uses an activity-based costing system,produces travel trailers and boat trailers.The company allocates batch setup costs to the two products using the following basic data:
 
Total budgeted setup costs for the year are $158,400.
If the setup costs are allocated using number of setups,how much of the total setup costs would be allocated to boat trailers?

Accepted Answer

A) $98,560 
B) $59,840 
C) $158,400 
D) $419,294 
A) $98,560 
B) $59,840 
C) $158,400 
D) $419,294

Question 11

Two main benefits of ABC are (1)more accurate product cost information and (2)more detailed information on the costs of activities and the drivers of those costs.

Accepted Answer

A) True 
 B)False

The cost of warranty work is an example of what type of cost?

Costs incurred to avoid manufacturing poor-quality goods or services are considered to be

The movement of parts is considered a non-value-added activity.

Costs incurred to detect poor-quality goods and services refer to

Costs incurred in detecting poor quality goods or services are what type of costs?

Which term listed below describes a system where companies purchase raw materials when needed in production and complete finished goods when needed by customers?

In using an ABC system,all of the following steps are performed before the company's year begins except

Two main benefits of ABC are (1)more accurate product cost information and (2)more detailed information on the costs of activities and the drivers of those costs.

Introduction to Managerial Accounting

Building Blocks of Managerial Accounting

Job Costing

Process Costing

Cost Behavior

Cost-Volume-Profit Analysis

Relevant Costs for Short-Term Decisions

The Master Budget

Performance Evaluation

Standard Costs and Variances

Capital Investment Decisions and the Time Value of Money

Statement of Cash Flows

Financial Statement Analysis

Sustainability

Filters

Exam 4: Activity-Based Costing, lean Operations, and the Costs of Quality

The cost of warranty work is an example of what type of cost?

Costs incurred to avoid manufacturing poor-quality goods or services are considered to be

The movement of parts is considered a non-value-added activity.

Costs incurred to detect poor-quality goods and services refer to

Costs incurred in detecting poor quality goods or services are what type of costs?

Which term listed below describes a system where companies purchase raw materials when needed in production and complete finished goods when needed by customers?

In using an ABC system,all of the following steps are performed before the company's year begins except

Two main benefits of ABC are (1)more accurate product cost information and (2)more detailed information on the costs of activities and the drivers of those costs.

Introduction to Managerial Accounting

Building Blocks of Managerial Accounting

Job Costing

Process Costing

Cost Behavior

Cost-Volume-Profit Analysis

Relevant Costs for Short-Term Decisions

The Master Budget

Performance Evaluation

Standard Costs and Variances

Capital Investment Decisions and the Time Value of Money

Statement of Cash Flows

Financial Statement Analysis

Sustainability

Filters