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

Which of the following terms describes the process of reevaluating activities to reduce costs while satisfying customers' needs?

The cost of testing incoming raw materials from a supplier would be classified as a(n)________ cost.

Back Porch Company manufactures lawn chairs using an activity-based costing system to allocate all manufacturing conversion costs.The following information is provided for the month of June: Each lawn chair consists of 8 parts;the total direct materials cost per lawn chair is $10.00. What is the total cost of packaging per lawn chair?

Which of the following is not likely to be a cost driver of activities associated with determining product cost?

Telecom uses activity-based costing to allocate all manufacturing conversion costs.Telecom produces cellular telephones;each phone has $40.00 of direct materials,includes 30 parts and requires 3 hours of machine time.Additional information follows: What is the cost of assembling per phone?

Batch-level activities and costs are incurred again each time a batch is produced.

Using traditional costing instead of ABC costing might lead to all of the following except

An example of a prevention cost is the cost of redesigning the product to reduce its complexity.

Companies that use ABC trace direct materials and direct labor to cost objects just as would be done using traditional costing systems.

Which of the following systems focuses on activities as the fundamental cost objects and uses the costs of those activities as building blocks for compiling the indirect costs of products and other cost objects?

The costs of training production personnel on their job tasks is an example of which of the following types of costs?

Cooper's Bags Company manufactures cloth grocery bags to be sold to grocery stores and other retailers.Cooper's Bags Company sells the bags in cases of 1,000 bags.The bags come in three sizes: Large,Medium,and Small.Currently,Cooper's Bags Company uses a single plantwide overhead rate to allocate its $8,088,000 of annual manufacturing overhead.Of this amount,$2,210,000 is associated with the Large Bag line,$3,418,800 is associated with the Medium Bag line,and $2,459,000 is associated with the Small Bag line.Cooper's Bags Company is currently running a total of 40,000 machine hours: 13,000 in the Large Bag line,15,400 in the Medium Bag line,and 11,600 in the Small Bag line.Cooper's Bags Company uses machine hours as the cost driver for manufacturing overhead costs. Which product line(s)have been overcosted or undercosted by using the plantwide manufacturing overhead rate?

The allocation base selected for each department should be the cost driver of the costs in the departmental overhead pool.

The goal of value-engineering is to

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 manufacturing costs for Part 001 is

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 costs for Part 001 is closest to (round to two decimal points)

The cost to research and develop,design and market new models would be considered a product-level cost.

Vandalay Industries manufactures two products: toasters and blenders.The annual production and sales of toasters is 2,200 units,while 1,500 units of blenders are produced and sold.The company has traditionally used direct labor hours to allocate its overhead to products.Toasters require 1.25 direct labor hours per unit,while blenders require 1 direct labor hours per unit.The total estimated overhead for the period is $149,115.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 Blenders using the traditional costing system would be closest to

The manager at East Coast Manufacturing organizes costs to prepare the Costs of Quality report.The manger compiled the following data: What of the following cost is the total cost of quality the manager should use to report the costs in the internal failure cost category?

Hummingbird Manufacturing manufactures small parts and uses an activity-based costing system. The following parts were produced in October with the following information: Total unit cost for part B is closest to (rounded to two decimal places)