Question 1

What type of costs typically represent a much higher percentage of product costs than direct labour?

Accepted Answer

A)  value-added costs 
B)  activity costs 
C)  overhead costs 
D)  consumption costs 
A)  value-added costs 
B)  activity costs 
C)  overhead costs 
D)  consumption costs C

Question 2

A volume-based costing system tends to be allocation-intensive.

Accepted Answer

A) True 
 B)False  True

Question 3

What is the term for increasing the efficiency of necessary activities by using economies of scale?

Accepted Answer

A)  activity elimination 
B)  activity sharing 
C)  activity management 
D)  activity selection 
A)  activity elimination 
B)  activity sharing 
C)  activity management 
D)  activity selection B

Question 4

Indeed Company makes a product using two departments: Department 1 and Department 2.Information on these departments is as follows:   
A.	Calculate the department overhead rate for each department. Use machine hours as the base in Department 1 and direct labour hours as the base in Department 2.
B.	A job has prime cost of $270. It uses 10 machine hours in Department 1 and 15 direct labour hours in Department 2. Calculate the total product cost for the job.
C.	Recalculate the department overhead rate for each department. Use direct labour hours as the base in Department 1 and machine hours as the base in Department 2.
D.	A job has prime cost of $270. It uses 10 direct labour hours in Department 1 and 15 machine hours in Department 2. Using the rates calculated in part C, calculate the total product cost for the job.

Accepted Answer

The answer of Indeed Company makes a product using two...

Question 5

Which ratio measures the proportion of an activity consumed by a product?

Accepted Answer

A)  production ratio 
B)  consumption ratio 
C)  efficiency ratio 
D)  quality ratio 
A)  production ratio 
B)  consumption ratio 
C)  efficiency ratio 
D)  quality ratio

Question 6

$$\begin{array} { l r r r r } 
\text { Product } & \text { Machine Hours } & \text { Setups } & \text { Receiving Orders } & \text { Packing Orders } \
\text { basic } & 20,000 & 200 & 100 & 800 \
\text { deluxe } & 20,000 & 500 & 400 & 4,000 \
\text { Costs } & \$ 80,000 & \$ 60,000 & \$ 10,000 & \$ 30,000
\end{array}$$
-Refer to the Figure.Suppose Andiamo uses only machine hours to calculate a plantwide overhead rate.What would be the total overhead assigned to the basic tablets?

Accepted Answer

A)  $60,000 
B)  $80,000 
C)  $90,000 
D)  $180,000 
A)  $60,000 
B)  $80,000 
C)  $90,000 
D)  $180,000

Question 7

Match each item with the correct statement below.
-Activities that are performed each time a unit is produced

Accepted Answer

A) Activity drivers 
B) Activity-based costing system 
C) Consumption ratio 
D) Unit-level activities 
E) Activity attributes
F)Resource drivers 
A) Activity drivers 
B) Activity-based costing system 
C) Consumption ratio 
D) Unit-level activities 
E) Activity attributes
F)Resource drivers

Question 8

What costs are incurred when products and services do NOT conform to either specifications or customer needs prior to being delivered?

Accepted Answer

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

Question 9

Match each item with the correct statement below.
-Costs necessary to perform value-added activities with perfect efficiency.

Accepted Answer

A) Activity analysis 
B) Value-added costs 
C) Velocity 
D) Activity inputs 
E) Activity output measure
F)Activity output 
A) Activity analysis 
B) Value-added costs 
C) Velocity 
D) Activity inputs 
E) Activity output measure
F)Activity output

Question 10

In activity-based costing,what are interviews and surveys used to identify?

Accepted Answer

A)  quality 
B)  velocity 
C)  value 
D)  activities 
A)  quality 
B)  velocity 
C)  value 
D)  activities

Question 11

The robust quality view of conformance is that variations in the product are acceptable.

Accepted Answer

A) True 
 B)False

Question 12

A company has two inspectors,each earning a salary of $150,000.One inspector works exclusively on inspecting parts received from outside suppliers,while the other spends 40% of her time inspecting parts and 60% of her time inspecting final products.How much labour cost should be assigned to the activity of inspecting parts?

Accepted Answer

A)  $60,000 
B)  $90,000 
C)  $210,000 
D)  $300,000 
A)  $60,000 
B)  $90,000 
C)  $210,000 
D)  $300,000

Question 13

What is the term for a list of activities accompanied by information that describes each activity?

Accepted Answer

A)  an activity manifesto 
B)  an activity journal 
C)  an activity dictionary 
D)  an activity note 
A)  an activity manifesto 
B)  an activity journal 
C)  an activity dictionary 
D)  an activity note

Question 14

Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.

Accepted Answer

A) True 
 B)False

Question 15

Match each item with the correct statement below.
-Activities necessary to remain in business

Accepted Answer

A) Cycle time 
B) Non-value added 
C) Velocity 
D) Quality 
E) Value-added activities
F)Efficiency 
A) Cycle time 
B) Non-value added 
C) Velocity 
D) Quality 
E) Value-added activities
F)Efficiency

Question 16

Costs that are caused by the inefficient performance of value-added activities are non-value-added costs.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is NOT a category of environmental cost?

Accepted Answer

A)  prevention costs 
B)  detection costs 
C)  total quality costs 
D)  internal failure costs 
A)  prevention costs 
B)  detection costs 
C)  total quality costs 
D)  internal failure costs

Question 18

A company spends $50,000 a year for inspecting,$40,000 for purchasing,and $60,000 for reworking products.What would be the best estimate of non-value-added costs?

Accepted Answer

A)  $50,000 
B)  $60,000 
C)  $110,000 
D)  $150,000 
A)  $50,000 
B)  $60,000 
C)  $110,000 
D)  $150,000

Question 19

Match each item with the correct statement below.
-Factors that measure the consumption of activities by products and other cost objects

Accepted Answer

A) Activity drivers 
B) Activity-based costing system 
C) Consumption ratio 
D) Unit-level activities 
E) Activity attributes
F)Resource drivers 
A) Activity drivers 
B) Activity-based costing system 
C) Consumption ratio 
D) Unit-level activities 
E) Activity attributes
F)Resource drivers

Question 20

Develop a set of at least five interview questions that could be used in the construction of an activity dictionary.Also explain why you would ask each question; i.e.,what information you hope to acquire and how it would apply to the activity dictionary.

Accepted Answer

Answers will vary wi

What type of costs typically represent a much higher percentage of product costs than direct labour?

A volume-based costing system tends to be allocation-intensive.

What is the term for increasing the efficiency of necessary activities by using economies of scale?

Which ratio measures the proportion of an activity consumed by a product?

Match each item with the correct statement below. -Activities that are performed each time a unit is produced

What costs are incurred when products and services do NOT conform to either specifications or customer needs prior to being delivered?

Match each item with the correct statement below. -Costs necessary to perform value-added activities with perfect efficiency.

In activity-based costing,what are interviews and surveys used to identify?

The robust quality view of conformance is that variations in the product are acceptable.

What is the term for a list of activities accompanied by information that describes each activity?

Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.

Match each item with the correct statement below. -Activities necessary to remain in business

Costs that are caused by the inefficient performance of value-added activities are non-value-added costs.

Which of the following is NOT a category of environmental cost?

A company spends $50,000 a year for inspecting,$40,000 for purchasing,and $60,000 for reworking products.What would be the best estimate of non-value-added costs?

Match each item with the correct statement below. -Factors that measure the consumption of activities by products and other cost objects

Develop a set of at least five interview questions that could be used in the construction of an activity dictionary.Also explain why you would ask each question; i.e.,what information you hope to acquire and how it would apply to the activity dictionary.

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behaviour

Costvolumeprofit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Absorption and Variable Costing,and Inventory Management

Budgeting, production, cash, and Master Budget

Standard Costing: a Managerial Control Tool

Flexible Budgets and Overhead Analysis

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Filters

Exam 7: Activity-Based Costing and Management

What type of costs typically represent a much higher percentage of product costs than direct labour?

A volume-based costing system tends to be allocation-intensive.

What is the term for increasing the efficiency of necessary activities by using economies of scale?

Which ratio measures the proportion of an activity consumed by a product?

Match each item with the correct statement below. -Activities that are performed each time a unit is produced

What costs are incurred when products and services do NOT conform to either specifications or customer needs prior to being delivered?

Match each item with the correct statement below. -Costs necessary to perform value-added activities with perfect efficiency.

In activity-based costing,what are interviews and surveys used to identify?

The robust quality view of conformance is that variations in the product are acceptable.

What is the term for a list of activities accompanied by information that describes each activity?

Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.

Match each item with the correct statement below. -Activities necessary to remain in business

Costs that are caused by the inefficient performance of value-added activities are non-value-added costs.

Which of the following is NOT a category of environmental cost?

A company spends $50,000 a year for inspecting,$40,000 for purchasing,and $60,000 for reworking products.What would be the best estimate of non-value-added costs?

Match each item with the correct statement below. -Factors that measure the consumption of activities by products and other cost objects

Develop a set of at least five interview questions that could be used in the construction of an activity dictionary.Also explain why you would ask each question; i.e.,what information you hope to acquire and how it would apply to the activity dictionary.

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behaviour

Costvolumeprofit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Absorption and Variable Costing,and Inventory Management

Budgeting, production, cash, and Master Budget

Standard Costing: a Managerial Control Tool

Flexible Budgets and Overhead Analysis

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Filters