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

If a company were to decrease its prevention costs by eliminating employee training,the company's external failure costs would most likely

Potter & Weasley Company had the following activities,estimated indirect activity costs,and allocation bases: Potter & Weasley uses activity based costing. The above activities are used by Departments P and Q as follows: What is the cost per driver unit for the account billing activity?

The benefits of using the ABC costing system are higher if the company

One key element of lean production is to produce large batches.

Hummingbird Manufacturing manufactures small parts and uses an activity-based costing system. The following parts were produced in October with the following information: Total packaging fees for all three parts is

In developing an ABC system,what is the last step?

The cost of product liability claims is an example of a(n)________ cost.

Activity-based management refers to using activity-based cost information to make decisions that may increase profits while satisfying customers' needs.

The plantwide overhead cost allocation rate is computed by dividing the estimated total manufacturing overhead costs by the estimated total quantity of the cost allocation base.

Kramer Company manufactures coffee tables and uses an activity-based costing system.Each coffee table consists of 20 separate parts totaling $240 in direct materials,and requires 5.0 hours of machine time to produce.Additional information follows: What is the cost of materials handling per coffee table?

If a company's plantwide overhead rate is allocated based on direct labor hours,then each job will be allocated manufacturing overhead based on the total direct labor hours incurred on the job,regardless of the manufacturing department in which those hours were incurred.

All of the following describe an ABC system except

One condition that favors using plantwide overhead rates,rather than departmental overhead rates,is that different jobs or products use the departments to a different extent.

Which of the following is an example of a cost item that should be classified as a prevention cost?

A system that focuses on activities as the fundamental cost object and uses the costs for these activities to compile indirect costs of goods and services is

Using departmental overhead rates is generally less accurate than using a single plantwide overhead rate.

Non-value-added activities can be described as activities for which the customer is willing to pay.

The cost of training employees would be classified as a prevention cost.

Indications that a product cost system needs revision include

The use of which of the following costing systems is most likely to reduce cost distortion to a minimum?