Question 1

The key to reducing costs through activity management is

Accepted Answer

A) eliminating high-cost executive positions. 
B) eliminating activities such as inspections. 
C) eliminating the resources associated with the reduced activities. 
D) eliminating high-cost executive positions,activities such as inspections,and the resources associated with the reduced activities. 
A) eliminating high-cost executive positions. 
B) eliminating activities such as inspections. 
C) eliminating the resources associated with the reduced activities. 
D) eliminating high-cost executive positions,activities such as inspections,and the resources associated with the reduced activities. C

Question 2

Dawson Company manufactures two products,Regular and Deluxe.Overhead costs consist of machining,$2,500,000; and assembly,$1,250,000.Recent data are provided below: Regular Deluxe
Direct labor hours 10,000 15,000
Machine hours 10,000 30,000
Number of parts 90,000 160,000
Overhead allocated to Deluxe using a single overhead rate based on number of parts and using activity based costing,respectively,are:

Accepted Answer

A) $2,400,000 and $2,625,000 
B) $937,500 and $2,812,500 
C) $1,350,000 and $1,125,000 
D) $1,075,000 and $2,675,000 
A) $2,400,000 and $2,625,000 
B) $937,500 and $2,812,500 
C) $1,350,000 and $1,125,000 
D) $1,075,000 and $2,675,000 A

Question 3

In an activity-based costing system,which of the following is not a category in which activities are classified?

Accepted Answer

A) Unit-level 
B) Batch-level 
C) Product-level 
D) Factory-level 
A) Unit-level 
B) Batch-level 
C) Product-level 
D) Factory-level D

Question 4

Which of the following would be a likely activity driver for warehousing/packaging?

Accepted Answer

A) Direct labor hours 
B) Number of machine set-ups 
C) Number of product lines 
D) Number of batches 
A) Direct labor hours 
B) Number of machine set-ups 
C) Number of product lines 
D) Number of batches

Question 5

Identify the following activities in a medical equipment plant as value-added or non-value-added.

Accepted Answer

The answer of Identify the following activities in a medical...

Question 6

In an activity-based costing system,which of the following is not a category in which activities are classified?

Accepted Answer

A) Unit-level 
B) Batch-level 
C) Product-level 
D) Delivery-level 
A) Unit-level 
B) Batch-level 
C) Product-level 
D) Delivery-level

Question 7

In an activity-based costing system,a critical question to ask during activity identification is,"How important is this activity to the overall strategy of the organization?"

Accepted Answer

A) True 
 B)False

Question 8

Activity-based costing did not gain widespread popularity until

Accepted Answer

A) 1887. 
B) 1907. 
C) 1957. 
D) 1987. 
A) 1887. 
B) 1907. 
C) 1957. 
D) 1987.

Question 9

Even when direct materials and direct labor comprise the majority of product costs,manufacturing overhead allocation is still a major issue.

Accepted Answer

A) True 
 B)False

Question 10

A management tool that focuses on improving the efficiency and effectiveness of an organization's business processes through radical change is referred to as

Accepted Answer

A) business process reengineering. 
B) process improvement. 
C) radical analysis. 
D) activity-based management. 
A) business process reengineering. 
B) process improvement. 
C) radical analysis. 
D) activity-based management.

Question 11

Murphy Company produces two products: Standard and Deluxe.The company uses an activity-based costing system.Murphy produces 8,000

Accepted Answer

A) $1.75 
B) $11.00 
C) $15.00 
D) $16.00 
A) $1.75 
B) $11.00 
C) $15.00 
D) $16.00

Question 12

With activity-based costing,the goal is to develop a product cost that captures the amount of each resource consumed by the activities performed to produce a specific product.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following would be considered a customer-level activity?

Accepted Answer

A) Ordering direct materials used in all products 
B) Engineering changes made that will affect all products 
C) Cleaning the machines before beginning production 
D) Processing a sales order 
A) Ordering direct materials used in all products 
B) Engineering changes made that will affect all products 
C) Cleaning the machines before beginning production 
D) Processing a sales order

Question 14

Organizational-level activities provide identifiable benefits to specific products or services.

Accepted Answer

A) True 
 B)False

Question 15

Morrow Co.produces 3 products: Beta,Delta,and Gamma.Beta requires 400 purchase orders,Delta requires 600 purchase orders,and Gamma requires 1,000 purchase orders.Morrow has identified an ordering and receiving activity cost pool with allocated overhead of $180,000 for which the cost driver is purchase orders.Direct labor hours used on each product are 50,000 for Beta,40,000 for Delta,and 110,000 for Gamma.How much ordering and receiving overhead is assigned to each product? Beta Delta Gamma

Accepted Answer

A) $60,000 $60,000 $60,000 
B) $45,000 $36,000 $99,000 
C) $36,000 $54,000 $90,000 
D) $40,500 $45,000 $94,500 
A) $60,000 $60,000 $60,000 
B) $45,000 $36,000 $99,000 
C) $36,000 $54,000 $90,000 
D) $40,500 $45,000 $94,500

Question 16

Turnbull Company produces two products and their overhead consists of setups $20,000; machining $2,220,000; and packing $80,000.Data for the current year follow: Beta Delta
Number of setups 20 20
Machine hours 1,000 4,000
Packing orders 150 350
Number of

Accepted Answer

A) $256,000 and $478,000 
B) $464,000 and $456,000 
C) $256,000 and $242,000 
D) $464,000 and $478,000 
A) $256,000 and $478,000 
B) $464,000 and $456,000 
C) $256,000 and $242,000 
D) $464,000 and $478,000

Question 17

The process of using activity-based costing information to manage a business's activities,and thus its costs,is called total quality management.

Accepted Answer

A) True 
 B)False

Question 18

Activities that support the products or services a company provides is classified as an

Accepted Answer

A) unit-level activity. 
B) batch-level activity. 
C) product-level activity. 
D) organization-level activity. 
A) unit-level activity. 
B) batch-level activity. 
C) product-level activity. 
D) organization-level activity.

Question 19

Delivery of goods to customer job sites
Required:
Identify at least one possible cost driver for each activity cost pool.

Accepted Answer

The answer of Delivery of goods to customer job sites
Required:
Identify...

Question 20

Ayala Inc.computed an overhead rate for machining costs $1,500,000 of $15 per machine hour.Machining costs are driven by machine hours.If computed based on direct labor hours,the overhead rate for machining costs would be $30 per direct labor hour.The company produces two products,Hammer and Tong.Hammer requires 60,000 machine hours and 20,000 direct labor hours,while Tong requires 40,000 machine hours and 30,000 direct labor hours.Using activity-based costing,machining costs assigned to each product is Hammer Tong

Accepted Answer

A) $600,000 $900,000 
B) $750,000 $750,000 
C) $800,000 $700,000 
D) $900,000 $600,000 
A) $600,000 $900,000 
B) $750,000 $750,000 
C) $800,000 $700,000 
D) $900,000 $600,000

The key to reducing costs through activity management is

In an activity-based costing system,which of the following is not a category in which activities are classified?

Which of the following would be a likely activity driver for warehousing/packaging?

Identify the following activities in a medical equipment plant as value-added or non-value-added.

In an activity-based costing system,which of the following is not a category in which activities are classified?

In an activity-based costing system,a critical question to ask during activity identification is,"How important is this activity to the overall strategy of the organization?"

Activity-based costing did not gain widespread popularity until

Even when direct materials and direct labor comprise the majority of product costs,manufacturing overhead allocation is still a major issue.

A management tool that focuses on improving the efficiency and effectiveness of an organization's business processes through radical change is referred to as

Murphy Company produces two products: Standard and Deluxe.The company uses an activity-based costing system.Murphy produces 8,000

With activity-based costing,the goal is to develop a product cost that captures the amount of each resource consumed by the activities performed to produce a specific product.

Which of the following would be considered a customer-level activity?

Organizational-level activities provide identifiable benefits to specific products or services.

Turnbull Company produces two products and their overhead consists of setups $20,000; machining $2,220,000; and packing $80,000.Data for the current year follow: Beta Delta Number of setups 20 20 Machine hours 1,000 4,000 Packing orders 150 350 Number of

The process of using activity-based costing information to manage a business's activities,and thus its costs,is called total quality management.

Activities that support the products or services a company provides is classified as an

Delivery of goods to customer job sites Required: Identify at least one possible cost driver for each activity cost pool.

Accounting As a Tool for Management

Cost Behavior and Cost Estimation

Cost-Volume-Profit Analysis and Pricing Decisions

Product Costs and Job Order Costing

Planning and Forecasting

Performance Evaluation: Variance Analysis

Using Accounting Information to Make Managerial Decisions

Capital Budgeting

Decentralizing and Performance Evaluation

Performance Evaluation Revisited: a Balanced Approach

Financial Statement Analysis

Statement of Cash Flows

Topic Focus: Process Costing

Topic Focus Variable and Absorption Costing

Topic Focus Standard Costing Systems

Topic Focus Customer Profitability

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Exam 7: Activity-Based Costing and Activity Based Management

The key to reducing costs through activity management is

In an activity-based costing system,which of the following is not a category in which activities are classified?

Which of the following would be a likely activity driver for warehousing/packaging?

Identify the following activities in a medical equipment plant as value-added or non-value-added.

In an activity-based costing system,which of the following is not a category in which activities are classified?

In an activity-based costing system,a critical question to ask during activity identification is,"How important is this activity to the overall strategy of the organization?"

Activity-based costing did not gain widespread popularity until

Even when direct materials and direct labor comprise the majority of product costs,manufacturing overhead allocation is still a major issue.

A management tool that focuses on improving the efficiency and effectiveness of an organization's business processes through radical change is referred to as

Murphy Company produces two products: Standard and Deluxe.The company uses an activity-based costing system.Murphy produces 8,000

With activity-based costing,the goal is to develop a product cost that captures the amount of each resource consumed by the activities performed to produce a specific product.

Which of the following would be considered a customer-level activity?

Organizational-level activities provide identifiable benefits to specific products or services.

Turnbull Company produces two products and their overhead consists of setups $20,000; machining $2,220,000; and packing $80,000.Data for the current year follow: Beta Delta Number of setups 20 20 Machine hours 1,000 4,000 Packing orders 150 350 Number of

The process of using activity-based costing information to manage a business's activities,and thus its costs,is called total quality management.

Activities that support the products or services a company provides is classified as an

Delivery of goods to customer job sites Required: Identify at least one possible cost driver for each activity cost pool.

Accounting As a Tool for Management

Cost Behavior and Cost Estimation

Cost-Volume-Profit Analysis and Pricing Decisions

Product Costs and Job Order Costing

Planning and Forecasting

Performance Evaluation: Variance Analysis

Using Accounting Information to Make Managerial Decisions

Capital Budgeting

Decentralizing and Performance Evaluation

Performance Evaluation Revisited: a Balanced Approach

Financial Statement Analysis

Statement of Cash Flows

Topic Focus: Process Costing

Topic Focus Variable and Absorption Costing

Topic Focus Standard Costing Systems

Topic Focus Customer Profitability

Filters