Question 1

The cost of maintenance on the entire production plant would be considered a facility-level cost.

Accepted Answer

A) True 
 B)False

Question 2

Garrett Company manufactures coffee tables and uses an activity-based costing system to allocate all manufacturing conversion costs.Each coffee table consists of 15 separate parts totaling $125 in direct materials,and requires 2.0 hours of machine time to produce.Additional information follows:
 
What is the total manufacturing cost per coffee table?

Accepted Answer

A) $165.50 
B) $40.50 
C) $162.75 
D) $30.00 
A) $165.50 
B) $40.50 
C) $162.75 
D) $30.00

Question 3

Refined costing systems can be used to allocate any indirect costs to any cost objects.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is a sign that a product cost system is not working properly?

Accepted Answer

A) The cost system is fully depreciated. 
B) The cost system was installed five years ago. 
C) The cost system has multiple allocation bases. 
D) Managers don't understand costs and profits. 
A) The cost system is fully depreciated. 
B) The cost system was installed five years ago. 
C) The cost system has multiple allocation bases. 
D) Managers don't understand costs and profits.

Question 5

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 verification activity?

Accepted Answer

A) $1.75 
B) $1.50 
C) $9.56 
D) $8.00 
A) $1.75 
B) $1.50 
C) $9.56 
D) $8.00

Question 6

Waste activities is another name for non-value-added activities.

Accepted Answer

A) True 
 B)False

Question 7

The manager at Rainbow International prepares a Cost of Quality report to report the following expenses:  
Which of the following total cost is the total cost of quality in the external failure cost category?

Accepted Answer

A) $180,000 
B) $7,500 
C) $240,000 
D) $680,000 
E) $250,000 
A) $180,000 
B) $7,500 
C) $240,000 
D) $680,000 
E) $250,000

Question 8

Managers who practice total quality management

Accepted Answer

A) invest more resources at the front end of the value chain in research and development and design to produce a superior product. 
B) invest more resources in inspecting and repairing products once they are produced. 
C) practice both A and B. 
D) practice neither A nor B. 
A) invest more resources at the front end of the value chain in research and development and design to produce a superior product. 
B) invest more resources in inspecting and repairing products once they are produced. 
C) practice both A and B. 
D) practice neither A nor B.

Question 9

The cost of installing improved production equipment and production processes is a(n)________ cost.

Accepted Answer

A) external failure 
B) internal failure 
C) appraisal 
D) prevention 
A) external failure 
B) internal failure 
C) appraisal 
D) prevention

Question 10

Value-added activities are activities that could be reduced or removed from the process with no ill effect on the end product or service.

Accepted Answer

A) True 
 B)False

Question 11

Costs incurred to detect poor quality goods or services are

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 12

Swiss Furniture Company manufactures bookshelves and uses an activity-based costing system.The following information is provided for the month of May:
 
Each bookshelf consists of 4 parts.The direct materials cost per bookshelf is $30.00.
What is the cost of materials handling and assembling per bookshelf?

Accepted Answer

A) $8.00 
B) $24.80 
C) $22.00 
D) $14.00 
A) $8.00 
B) $24.80 
C) $22.00 
D) $14.00

Question 13

ABC tends to increase the unit cost of low-volume products and decrease the unit cost of high-volume products.

Accepted Answer

A) True 
 B)False

Question 14

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 predetermined overhead allocation rate using the traditional costing system would be closest to

Accepted Answer

A) $52.25 per direct labor hour. 
B) $48.13 per direct labor hour. 
C) $42.33 per direct labor hour. 
D) $25.05 per direct labor hour. 
A) $52.25 per direct labor hour. 
B) $48.13 per direct labor hour. 
C) $42.33 per direct labor hour. 
D) $25.05 per direct labor hour.

Question 15

A departmental overhead rate is calculated by dividing the total estimated departmental overhead cost pool by the estimated total amount of the department's cost allocation base.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is a lean strategy?

Accepted Answer

A) Group like machines together. 
B) Produce in smaller batches than a traditional system. 
C) Maintain a higher level of inventory than a traditional system. 
D) Lengthen setup times relative to a traditional system. 
A) Group like machines together. 
B) Produce in smaller batches than a traditional system. 
C) Maintain a higher level of inventory than a traditional system. 
D) Lengthen setup times relative to a traditional system.

Question 17

Beartowne Enterprises uses an activity-based costing system to assign costs in its auto-parts division.
 
The following units were produced in December with the following information:
 
Total unit cost for Part 002 is closest to (rounded):

Accepted Answer

A) $5.36 
B) $5.70. 
C) $9.37. 
D) $3.64. 
A) $5.36 
B) $5.70. 
C) $9.37. 
D) $3.64.

Question 18

Bilingsly Limited,a manufacturer of a variety of products,uses an activity-based costing system.Information from its system for the year for all products follows:  
Bilingsly Limited makes 450 of its product B63 a year,which requires a total of 53 machine hours,13 inspection hours,and 19 orders.Product B63 requires $45.70 in direct materials per unit and $58.20 in direct labor per unit.Product B63 sells for $265 per unit.What is the profit margin in total for Product B63?

Accepted Answer

A) $80.20 
B) $36,090.00 
C) $116,986.60 
D) $70,335.50 
A) $80.20 
B) $36,090.00 
C) $116,986.60 
D) $70,335.50

Question 19

Managers often reap benefits by using ABC data in ABM to pinpoint opportunities to cut costs.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following cost of quality categories represent the cost incurred to rework a product after the company detects a poor-quality product before the company delivers the product to a consumer?

Accepted Answer

A) Lean production 
B) Value added activity 
C) Internal failure costs 
D) External failure costs 
A) Lean production 
B) Value added activity 
C) Internal failure costs 
D) External failure costs

The cost of maintenance on the entire production plant would be considered a facility-level cost.

Refined costing systems can be used to allocate any indirect costs to any cost objects.

Which of the following is a sign that a product cost system is not working properly?

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 verification activity?

Waste activities is another name for non-value-added activities.

The manager at Rainbow International prepares a Cost of Quality report to report the following expenses: Which of the following total cost is the total cost of quality in the external failure cost category?

Managers who practice total quality management

The cost of installing improved production equipment and production processes is a(n)________ cost.

Value-added activities are activities that could be reduced or removed from the process with no ill effect on the end product or service.

Costs incurred to detect poor quality goods or services are

ABC tends to increase the unit cost of low-volume products and decrease the unit cost of high-volume products.

A departmental overhead rate is calculated by dividing the total estimated departmental overhead cost pool by the estimated total amount of the department's cost allocation base.

Which of the following is a lean strategy?

Beartowne Enterprises uses an activity-based costing system to assign costs in its auto-parts division. The following units were produced in December with the following information: Total unit cost for Part 002 is closest to (rounded):

Managers often reap benefits by using ABC data in ABM to pinpoint opportunities to cut costs.

Which of the following cost of quality categories represent the cost incurred to rework a product after the company detects a poor-quality product before the company delivers the product to a consumer?

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 maintenance on the entire production plant would be considered a facility-level cost.

Refined costing systems can be used to allocate any indirect costs to any cost objects.

Which of the following is a sign that a product cost system is not working properly?

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 verification activity?

Waste activities is another name for non-value-added activities.

The manager at Rainbow International prepares a Cost of Quality report to report the following expenses: Which of the following total cost is the total cost of quality in the external failure cost category?

Managers who practice total quality management

The cost of installing improved production equipment and production processes is a(n)________ cost.

Value-added activities are activities that could be reduced or removed from the process with no ill effect on the end product or service.

Costs incurred to detect poor quality goods or services are

ABC tends to increase the unit cost of low-volume products and decrease the unit cost of high-volume products.

A departmental overhead rate is calculated by dividing the total estimated departmental overhead cost pool by the estimated total amount of the department's cost allocation base.

Which of the following is a lean strategy?

Beartowne Enterprises uses an activity-based costing system to assign costs in its auto-parts division. The following units were produced in December with the following information: Total unit cost for Part 002 is closest to (rounded):

Managers often reap benefits by using ABC data in ABM to pinpoint opportunities to cut costs.

Which of the following cost of quality categories represent the cost incurred to rework a product after the company detects a poor-quality product before the company delivers the product to a consumer?

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