Exam 7: Activity-Based Costing and Management
Exam 1: Introduction to Managerial Accounting45 Questions
Exam 2: Basic Managerial Accounting Concepts156 Questions
Exam 3: Cost Behaviour186 Questions
Exam 4: Costvolumeprofit Analysis: a Managerial Planning Tool160 Questions
Exam 5: Job-Order Costing176 Questions
Exam 6: Process Costing157 Questions
Exam 7: Activity-Based Costing and Management155 Questions
Exam 8: Absorption and Variable Costing,and Inventory Management88 Questions
Exam 9: Budgeting, production, cash, and Master Budget166 Questions
Exam 10: Standard Costing: a Managerial Control Tool174 Questions
Exam 11: Flexible Budgets and Overhead Analysis149 Questions
Exam 12: Performance Evaluation and Decentralization145 Questions
Exam 13: Short-Run Decision Making: Relevant Costing149 Questions
Exam 14: Capital Investment Decisions153 Questions
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What type of costs typically represent a much higher percentage of product costs than direct labour?
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(Multiple Choice)
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Correct Answer:
C
A volume-based costing system tends to be allocation-intensive.
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(True/False)
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Correct Answer:
True
What is the term for increasing the efficiency of necessary activities by using economies of scale?
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(Multiple Choice)
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Correct Answer:
B
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.

(Essay)
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Which ratio measures the proportion of an activity consumed by a product?
(Multiple Choice)
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Product Machine Hours Setups Receiving Orders Packing Orders basic 20,000 200 100 800 deluxe 20,000 500 400 4,000 Costs \ 80,000 \ 60,000 \ 10,000 \ 30,000
-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?
(Multiple Choice)
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Match each item with the correct statement below.
-Activities that are performed each time a unit is produced
(Multiple Choice)
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What costs are incurred when products and services do NOT conform to either specifications or customer needs prior to being delivered?
(Multiple Choice)
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Match each item with the correct statement below.
-Costs necessary to perform value-added activities with perfect efficiency.
(Multiple Choice)
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In activity-based costing,what are interviews and surveys used to identify?
(Multiple Choice)
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The robust quality view of conformance is that variations in the product are acceptable.
(True/False)
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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?
(Multiple Choice)
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What is the term for a list of activities accompanied by information that describes each activity?
(Multiple Choice)
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Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.
(True/False)
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Match each item with the correct statement below.
-Activities necessary to remain in business
(Multiple Choice)
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Costs that are caused by the inefficient performance of value-added activities are non-value-added costs.
(True/False)
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Which of the following is NOT a category of environmental cost?
(Multiple Choice)
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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?
(Multiple Choice)
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Match each item with the correct statement below.
-Factors that measure the consumption of activities by products and other cost objects
(Multiple Choice)
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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.
(Essay)
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