Question 1

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

Accepted Answer

A) Engineering changes made on the assembly line 
B) Quality tests 
C) Warehouse costs 
D) Preparing the annual budget 
A) Engineering changes made on the assembly line 
B) Quality tests 
C) Warehouse costs 
D) Preparing the annual budget

Question 2

Gooding Company manufactures two models of its skillet,the Kitchen and the Campfire.The Kitchen model requires 10,000 direct labor hours and the Campfire requires 30,000 direct labor hours.The company produces 3,400

Accepted Answer

A) $21,150 
B) $30,600 
C) $42,300 
D) $71,910 
A) $21,150 
B) $30,600 
C) $42,300 
D) $71,910

Question 3

Which of the following is a product- or service-related activity?

Accepted Answer

A) Batch-level 
B) Customer-level 
C) Organization-level 
D) Group-level 
A) Batch-level 
B) Customer-level 
C) Organization-level 
D) Group-level

Question 4

When using an activity-based costing system,which of the following is the formula for allocating costs to products or services?

Accepted Answer

A) Activity rate x activity driver consumption 
B) Activity rate x amount in activity pool 
C) Predetermined manufacturing overhead rate x actual activity 
D) Predetermined manufacturing overhead rate x planned activity 
A) Activity rate x activity driver consumption 
B) Activity rate x amount in activity pool 
C) Predetermined manufacturing overhead rate x actual activity 
D) Predetermined manufacturing overhead rate x planned activity

Question 5

Activities that are performed all at once on groups of products is classified as an

Accepted Answer

A) unit-level activity. 
B) group-level activity. 
C) batch-level activity. 
D) operations-level activity. 
A) unit-level activity. 
B) group-level activity. 
C) batch-level activity. 
D) operations-level activity.

Question 6

The first step in implementing an activity-based costing system begins with

Accepted Answer

A) developing activity cost pools. 
B) identifying activities. 
C) calculating activity cost pool rates. 
D) calculate the 
A) developing activity cost pools. 
B) identifying activities. 
C) calculating activity cost pool rates. 
D) calculate the

Question 7

Which of the following is not a product- or service-related activity?

Accepted Answer

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

Question 8

Assigning manufacturing overhead cost to activity pools is referred to as first-stage allocation because

Accepted Answer

A) costs are assigned first to the activity pools before being assigned to cost objects. 
B) costs are assigned first to the activity pools before being assigned to cost drivers. 
C) costs are assigned first to the activity pools before being assigned to activity drivers. 
D) costs are assigned first to the activity pools before being assigned to activity objects. 
A) costs are assigned first to the activity pools before being assigned to cost objects. 
B) costs are assigned first to the activity pools before being assigned to cost drivers. 
C) costs are assigned first to the activity pools before being assigned to activity drivers. 
D) costs are assigned first to the activity pools before being assigned to activity objects.

Question 9

The following list includes activities that are performed in a CPA firm..Classify each activity as value-added or non-value added.

Accepted Answer

The answer of The following list includes activities that are...

Question 10

One way to implement activity-based management is to take a fresh look at the activities performed in an organization to see if a business process can be changed so as to reduce costs.As part of a team responsible for implementing an activity-based costing system,you are to investigate business processes for your company and specifically investigate processes in products that are not profitable.You have been introduced to the terms Process Improvement and Business Process Reengineering.
Required:
Define activity-based management and list four ways managers use activity-based costing information and define process improvement and business process engineering.

Accepted Answer

The process of using activity-based cost

Question 11

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) $1,856,000 and $1,878,000 
B) $1,864,000 and $2,056,000 
C) $1,856,000 and $1,842,000 
D) $1,864,000 and $1,878,000 
A) $1,856,000 and $1,878,000 
B) $1,864,000 and $2,056,000 
C) $1,856,000 and $1,842,000 
D) $1,864,000 and $1,878,000

Question 12

Product-level activities are also referred to as

Accepted Answer

A) product-sustaining activities. 
B) product resource activities. 
C) batch-level activities. 
D) group-level activities. 
A) product-sustaining activities. 
B) product resource activities. 
C) batch-level activities. 
D) group-level activities.

Question 13

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 14

Mantle Co.manufactures baseball bats.The company's total overhead consists of assembly costs and inspection costs.The following data is available: Cost Pool Wood Aluminum Total Cost
Assembly 500 machine hrs.500 machine hrs.$ 45,000
Inspections 350 inspections 150 inspections 75,000
2,100 labor hrs.1,900 labor hrs.
Total overhead assigned to wood bats assuming a single overhead rate and using activity based costing,respectively,are:

Accepted Answer

A) $63,000 and $75,000 
B) $63,000 and $57,000 
C) $57,000 and $45,000 
D) $57,000 and $75,000 
A) $63,000 and $75,000 
B) $63,000 and $57,000 
C) $57,000 and $45,000 
D) $57,000 and $75,000

Question 15

Identifying activities performed in the organization is the first step in developing activity-based product costs.Which of the following is a way to identify these activities?

Accepted Answer

A) Asking employees what they do 
B) Analyzing industry averages 
C) Both asking employees what they do and analyzing industry averages 
D) Neither asking employees what they do nor analyzing industry averages 
A) Asking employees what they do 
B) Analyzing industry averages 
C) Both asking employees what they do and analyzing industry averages 
D) Neither asking employees what they do nor analyzing industry averages

Question 16

The examination of business processes to identify incremental changes that may reduce operating costs is referred to as

Accepted Answer

A) variance analysis. 
B) incremental analysis. 
C) process improvement. 
D) total quality management. 
A) variance analysis. 
B) incremental analysis. 
C) process improvement. 
D) total quality management.

Question 17

In an activity-based costing system,the benefits of defining more detailed activities will always outweigh the effort needed to monitor activity performance,and the resulting potential for error.

Accepted Answer

A) True 
 B)False

Question 18

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 Birmingham?

Accepted Answer

A) $174,500 
B) $167,600 
C) $209,500 
D) $175,400 
A) $174,500 
B) $167,600 
C) $209,500 
D) $175,400

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

Gooding Company manufactures two models of its skillet,the Kitchen and the Campfire.The Kitchen model requires 10,000 direct labor hours and the Campfire requires 30,000 direct labor hours.The company produces 3,400

Which of the following is a product- or service-related activity?

When using an activity-based costing system,which of the following is the formula for allocating costs to products or services?

Activities that are performed all at once on groups of products is classified as an

The first step in implementing an activity-based costing system begins with

Which of the following is not a product- or service-related activity?

Assigning manufacturing overhead cost to activity pools is referred to as first-stage allocation because

The following list includes activities that are performed in a CPA firm..Classify each activity as value-added or non-value added.

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

Product-level activities are also referred to as

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

Identifying activities performed in the organization is the first step in developing activity-based product costs.Which of the following is a way to identify these activities?

The examination of business processes to identify incremental changes that may reduce operating costs is referred to as

In an activity-based costing system,the benefits of defining more detailed activities will always outweigh the effort needed to monitor activity performance,and the resulting potential for error.

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

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

Gooding Company manufactures two models of its skillet,the Kitchen and the Campfire.The Kitchen model requires 10,000 direct labor hours and the Campfire requires 30,000 direct labor hours.The company produces 3,400

Which of the following is a product- or service-related activity?

When using an activity-based costing system,which of the following is the formula for allocating costs to products or services?

Activities that are performed all at once on groups of products is classified as an

The first step in implementing an activity-based costing system begins with

Which of the following is not a product- or service-related activity?

Assigning manufacturing overhead cost to activity pools is referred to as first-stage allocation because

The following list includes activities that are performed in a CPA firm..Classify each activity as value-added or non-value added.

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

Product-level activities are also referred to as

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

Identifying activities performed in the organization is the first step in developing activity-based product costs.Which of the following is a way to identify these activities?

The examination of business processes to identify incremental changes that may reduce operating costs is referred to as

In an activity-based costing system,the benefits of defining more detailed activities will always outweigh the effort needed to monitor activity performance,and the resulting potential for error.

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