Question 1

The easiest part of calculating the total product cost is

Accepted Answer

A) separating direct material and indirect material. 
B) allocating costs to products. 
C) adding the direct materials and direct labor costs to overhead. 
D) only adding direct materials to overhead. 
A) separating direct material and indirect material. 
B) allocating costs to products. 
C) adding the direct materials and direct labor costs to overhead. 
D) only adding direct materials to overhead.

Question 2

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

Accepted Answer

A) Quality tests 
B) Engineering changes made in the assembly line 
C) Machine set-up 
D) Preparing purchase orders 
A) Quality tests 
B) Engineering changes made in the assembly line 
C) Machine set-up 
D) Preparing purchase orders

Question 3

Inspection would be classified as value-added in which of the following scenarios?

Accepted Answer

A) Production of motorcycles 
B) Manufacture of baseball jerseys 
C) Processing meat for compliance with FDA regulations 
D) Production of cereal 
A) Production of motorcycles 
B) Manufacture of baseball jerseys 
C) Processing meat for compliance with FDA regulations 
D) Production of cereal

Question 4

Place an "X" in the column that corresponds to the type of activity level referred to in the following hospital setting.

Accepted Answer

The answer of Place an "X" in the column that...

Question 5

Indicators that an activity-based costing analysis may be appropriate include all the following except

Accepted Answer

A) bids for complex products are accepted,while bids for simple products are rejected. 
B) products are similar and consume resources in the same way. 
C) high-volume jobs show losses or minimal profits,while low-volume jobs show healthy profits. 
D) bids for jobs that require "special" processing are always accepted. 
A) bids for complex products are accepted,while bids for simple products are rejected. 
B) products are similar and consume resources in the same way. 
C) high-volume jobs show losses or minimal profits,while low-volume jobs show healthy profits. 
D) bids for jobs that require "special" processing are always accepted.

Question 6

Brandon Consulting Company is headquartered in Atlanta and has branch offices in Nashville and Birmingham.Brandon uses an activity-based costing system.The Atlanta office has its costs for Administration and Legal allocated to the two branch offices.Brandon has provided the following information:     How much of Atlanta's cost will be allocated to Nashville?

Accepted Answer

A) $628,500 
B) $663,500 
C) $670,400 
D) $665,300 
A) $628,500 
B) $663,500 
C) $670,400 
D) $665,300

Question 7

Those activities that create the product the customer wants to buy are referred to as

Accepted Answer

A) profitability activities. 
B) manufacturing burden. 
C) value-added activities. 
D) period costs. 
A) profitability activities. 
B) manufacturing burden. 
C) value-added activities. 
D) period costs.

Question 8

Since a batch-level activity is based on the existence of the batch,a batch consumes resources

Accepted Answer

A) proportionately with the number of units in the batch. 
B) inversely with the number of units in the batch 
C) the same amount whether it contains 20 units or 2,000 units. 
D) a different amount whether it contains 20 
A) proportionately with the number of units in the batch. 
B) inversely with the number of units in the batch 
C) the same amount whether it contains 20 units or 2,000 units. 
D) a different amount whether it contains 20

Question 9

In the activity identification stage of implementing an activity-based costing system,the greater the level of detail

Accepted Answer

A) the less likely the company will be to have a net loss. 
B) the greater the chance of misclassifying some costs and activities 
C) the less likely to misclassify some costs and activities 
D) the less likely the company will be to break-even. 
A) the less likely the company will be to have a net loss. 
B) the greater the chance of misclassifying some costs and activities 
C) the less likely to misclassify some costs and activities 
D) the less likely the company will be to break-even.

Question 10

A characteristic of non-value-added activities is that they

Accepted Answer

A) can always be eliminated. 
B) can never be eliminated. 
C) can sometimes be eliminated. 
D) are always related to fixed costs. 
A) can always be eliminated. 
B) can never be eliminated. 
C) can sometimes be eliminated. 
D) are always related to fixed costs.

Question 11

In implementing an activity-based costing system,after all the activities have been identified and the appropriate level of detail selected,the activities are combined into activity cost pools based on their

Accepted Answer

A) behavior. 
B) function. 
C) cost drivers. 
D) cost levels. 
A) behavior. 
B) function. 
C) cost drivers. 
D) cost levels.

Question 12

Clover Manufacturing Company makes two products.The company's budget includes $200,000 of overhead.Using the traditional allocation method,the company has allocated overhead based on estimated total direct labor cost of $125,000.Clover recently implemented an activity-based costing system and had determined that overhead can be broken into three overhead pools: cutting,machine setups,and good shipped.The following is a summary of company information:
   Required: 
a.Calculate the company's overhead rate as a percentage of direct labor cost.
b.Calculate the company's overhead rates using the activity-based costing pools.
Unit 7-2,

Accepted Answer

a.$200,000/$125,000 = 160% of

Question 13

Process improvement is the examination of business processes to identify incremental changes that may reduce operating costs.

Accepted Answer

A) True 
 B)False

Question 14

Place an "X" in the column that corresponds to the type of activity level referred to in each scenario.

Accepted Answer

The answer of Place an "X" in the column that...

Question 15

Processing a sales order is an example of a

Accepted Answer

A) product-level activity. 
B) unit-level activity. 
C) customer-level activity. 
D) group-level activity. 
A) product-level activity. 
B) unit-level activity. 
C) customer-level activity. 
D) group-level activity.

Question 16

Stockin Company produces Tablets and Books.Total overhead costs traditionally have been allocated on the basis of direct labor hours.After implementing activity-based costing,managers determined the following cost pools and cost drivers.They also decided that general costs should no longer be allocated to products.
   Other information is as follows:
   Required: 
a.Determine the unit product cost for Tablets using the traditional costing system.
b.Determine the unit product cost for Tablets using the activity-based costing system.
Unit 7-2,

Accepted Answer

a. @#IMG-DLM& @#IMG-DLM& 
b.ABC Rates Binding: @#IMG-DLM& Printing: $7

Question 17

Angora,Inc.uses activity-based costing to cost its two products: Standard and Deluxe.The company has provided the following data relating to its activities:
     Required: 
a.What is the activity rate for the cutting cost pool?
b.If actual activity is the same as that estimated,what is the total amount of overhead cost allocated to the Standard product?
Unit 7-2,

Accepted Answer

a.$536,000/8,000 = $67 per cut b.Machine

Question 18

An activity-based analysis that focuses only on manufacturing overhead improves GAAP-based financial statements.

Accepted Answer

A) True 
 B)False

Question 19

Camilla,Inc.uses activity-based costing to cost its two products: Standard and Deluxe.The company has provided the following data relating to its activities:
     Required: 
a.What is the activity rate for the sales cost pool?
b.If actual activity is the same as that estimated,what is the total amount of overhead cost allocated to the Deluxe product?
Unit 7-2,

Accepted Answer

a.$108,000/9,000 = $12 per order b.Machi

Question 20

At a Dole pineapple processing plant,which of the following is not a value-added activity?

Accepted Answer

A) Washing the pineapples 
B) Coring the pineapples 
C) Slicing the pineapples 
D) Labeling the packages 
A) Washing the pineapples 
B) Coring the pineapples 
C) Slicing the pineapples 
D) Labeling the packages

The easiest part of calculating the total product cost is

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

Inspection would be classified as value-added in which of the following scenarios?

Place an "X" in the column that corresponds to the type of activity level referred to in the following hospital setting.

Indicators that an activity-based costing analysis may be appropriate include all the following except

Those activities that create the product the customer wants to buy are referred to as

Since a batch-level activity is based on the existence of the batch,a batch consumes resources

In the activity identification stage of implementing an activity-based costing system,the greater the level of detail

A characteristic of non-value-added activities is that they

In implementing an activity-based costing system,after all the activities have been identified and the appropriate level of detail selected,the activities are combined into activity cost pools based on their

Process improvement is the examination of business processes to identify incremental changes that may reduce operating costs.

Place an "X" in the column that corresponds to the type of activity level referred to in each scenario.

Processing a sales order is an example of a

An activity-based analysis that focuses only on manufacturing overhead improves GAAP-based financial statements.

At a Dole pineapple processing plant,which of the following is not a value-added activity?

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

Exam 7: Activity-Based Costing and Activity Based Management

The easiest part of calculating the total product cost is

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

Inspection would be classified as value-added in which of the following scenarios?

Place an "X" in the column that corresponds to the type of activity level referred to in the following hospital setting.

Indicators that an activity-based costing analysis may be appropriate include all the following except

Those activities that create the product the customer wants to buy are referred to as

Since a batch-level activity is based on the existence of the batch,a batch consumes resources

In the activity identification stage of implementing an activity-based costing system,the greater the level of detail

A characteristic of non-value-added activities is that they

In implementing an activity-based costing system,after all the activities have been identified and the appropriate level of detail selected,the activities are combined into activity cost pools based on their

Process improvement is the examination of business processes to identify incremental changes that may reduce operating costs.

Place an "X" in the column that corresponds to the type of activity level referred to in each scenario.

Processing a sales order is an example of a

An activity-based analysis that focuses only on manufacturing overhead improves GAAP-based financial statements.

At a Dole pineapple processing plant,which of the following is not a value-added activity?

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