Question 1

Which of the following is NOT a supplier-driven activity?

Accepted Answer

A)  receiving 
B)  purchasing 
C)  efficiency 
D)  inspection of incoming components 
A)  receiving 
B)  purchasing 
C)  efficiency 
D)  inspection of incoming components

Question 2

Activity drivers should be classified as either internal or external.

Accepted Answer

A) True 
 B)False

Question 3

What is the term for the process of choosing among different sets of activities caused by competing strategies?

Accepted Answer

A)  activity elimination 
B)  activity reduction 
C)  activity costing 
D)  activity selection 
A)  activity elimination 
B)  activity reduction 
C)  activity costing 
D)  activity selection

Question 4

What can be caused by using only unit-based activity drivers to assign non-unit-related overhead costs?

Accepted Answer

A)  product diversity 
B)  distorted product costs 
C)  efficiency 
D)  activity sharing 
A)  product diversity 
B)  distorted product costs 
C)  efficiency 
D)  activity sharing

Question 5

Which of the following are setups,material handling,and inspection all possible examples of?

Accepted Answer

A)  product diversity 
B)  unit-level overhead activities 
C)  non-unit-level overhead activities 
D)  sustainable diversity 
A)  product diversity 
B)  unit-level overhead activities 
C)  non-unit-level overhead activities 
D)  sustainable diversity

Question 6

A factory produces 108,000 3D televisions per quarter.A total of 12,000 production hours are used within the factory per quarter.What is the velocity in units per hour?

Accepted Answer

A)  2 units per hour 
B)  9 units per hour 
C)  16 units per hour 
D)  18 units per hour 
A)  2 units per hour 
B)  9 units per hour 
C)  16 units per hour 
D)  18 units per hour

Question 7

The value-added standard is the waste-free component of the value-added activity.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is an example of an activity necessary to comply with Canada Customs and Revenue Agency?

Accepted Answer

A)  recreational activity 
B)  discretionary activity 
C)  recommended activity 
D)  required activity 
A)  recreational activity 
B)  discretionary activity 
C)  recommended activity 
D)  required activity

Question 9

A company takes 15,000 hours to produce 30,000 units of a product.What is the velocity?

Accepted Answer

A)  0.5 units per hour 
B)  1.0 unit per hour 
C)  2.0 units per hour 
D)  2.5 units per hour 
A)  0.5 units per hour 
B)  1.0 unit per hour 
C)  2.0 units per hour 
D)  2.5 units per hour

Question 10

Match each item with the correct statement below.
-Financial and nonfinancial information items that describe individual activities

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 11

Zero defects means that most products conform to specifications.

Accepted Answer

A) True 
 B)False

Question 12

Producing 20,000 cell phone units requires $600,000 of prime costs,uses 4,000 machine hours,and takes 2,400 setup hours.The activity rates are $80 per machine hour and $200 per setup hour.What is the unit cost of a cell phone?

Accepted Answer

A)  $30 
B)  $40 
C)  $50 
D)  $60 
A)  $30 
B)  $40 
C)  $50 
D)  $60

Question 13

A production dictionary lists the activities in an organization along with some critical activity attributes.

Accepted Answer

A) True 
 B)False

Question 14

One way to improve efficiency is to produce higher activity output with higher cost.

Accepted Answer

A) True 
 B)False

Question 15

What is the term for activities that are considered unnecessary to staying in business?

Accepted Answer

A)  value-added activities 
B)  non-value-added activities 
C)  direct activities 
D)  indirect activities 
A)  value-added activities 
B)  non-value-added activities 
C)  direct activities 
D)  indirect activities

Question 16

Environmental costs are costs that are incurred because poor environmental quality exists.

Accepted Answer

A) True 
 B)False

Question 17

$\begin{array}{lr}
\text { Setting up equipment } & \$ 8,000 \
\text { Machining } & 48,000
\end{array}$ The controller has collected the expected annual prime costs for each product,the machine hours,the setup hours,and the expected production. $$\begin{array} { l r r } 
& \text { High-end } & \text { Inexpensive } \
\text { Direct Labour } & \$ 24,000 & \$ 8,000 \
\text { Direct Materials } & 15,000 & 4,000 \
\text { Units } & 2,000 & 2,000 \
\text { Machine Hours } & 1,000 & 3,000 \
\text { Setup Hours } & 150 & 50
\end{array}$$
-Refer to the Figure.What is the overhead cost per unit for each inexpensive laptop,when using overhead rates that are based on machine hours and setup hours?

Accepted Answer

A)  $21.00 per unit 
B)  $19.00 per unit 
C)  $12.00 per unit 
D)  $10.00 per unit 
A)  $21.00 per unit 
B)  $19.00 per unit 
C)  $12.00 per unit 
D)  $10.00 per unit

Question 18

What is the aim of activity-based management?

Accepted Answer

A)  to identify and eliminate all unnecessary activities 
B)  to decrease the efficiency of necessary activities 
C)  to add new activities that decrease value 
D)  to increase non-value-added activities 
A)  to identify and eliminate all unnecessary activities 
B)  to decrease the efficiency of necessary activities 
C)  to add new activities that decrease value 
D)  to increase non-value-added activities

Question 19

Lauren's Volleyball Company produces two types of volleyballs: Volleylite and Official Game.Both products pass through two producing departments.The Official Game production is much more labour-intensive than the Volleylite.The Volleylite is also more popular.The following data have been gathered for the two products:   Lauren's Volleyball has decided to used activity-based costing and has developed two types of activities,machine related (based on machine hours),and other overhead (based on packing orders).Machine-related costs equal $160,000.Other overhead costs equal $240,000. 
A.	Calculate the activity rate for machine-related costs based on machine hours.
B.	Calculate the activity rate for other overhead costs based on packing orders.
C.	Using the two activity rates, calculate the overhead cost per unit for Official Game.
D.	Using the two activity rates, calculate the overhead cost per unit for Volleylite.

Accepted Answer

The answer of Lauren's Volleyball Company produces two types of...

Question 20

Discretionary activities are necessary to comply with legal mandates.

Accepted Answer

A) True 
 B)False

Which of the following is NOT a supplier-driven activity?

Activity drivers should be classified as either internal or external.

What is the term for the process of choosing among different sets of activities caused by competing strategies?

What can be caused by using only unit-based activity drivers to assign non-unit-related overhead costs?

Which of the following are setups,material handling,and inspection all possible examples of?

A factory produces 108,000 3D televisions per quarter.A total of 12,000 production hours are used within the factory per quarter.What is the velocity in units per hour?

The value-added standard is the waste-free component of the value-added activity.

Which of the following is an example of an activity necessary to comply with Canada Customs and Revenue Agency?

A company takes 15,000 hours to produce 30,000 units of a product.What is the velocity?

Match each item with the correct statement below. -Financial and nonfinancial information items that describe individual activities

Zero defects means that most products conform to specifications.

Producing 20,000 cell phone units requires $600,000 of prime costs,uses 4,000 machine hours,and takes 2,400 setup hours.The activity rates are $80 per machine hour and $200 per setup hour.What is the unit cost of a cell phone?

A production dictionary lists the activities in an organization along with some critical activity attributes.

One way to improve efficiency is to produce higher activity output with higher cost.

What is the term for activities that are considered unnecessary to staying in business?

Environmental costs are costs that are incurred because poor environmental quality exists.

What is the aim of activity-based management?

Discretionary activities are necessary to comply with legal mandates.

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

Which of the following is NOT a supplier-driven activity?

Activity drivers should be classified as either internal or external.

What is the term for the process of choosing among different sets of activities caused by competing strategies?

What can be caused by using only unit-based activity drivers to assign non-unit-related overhead costs?

Which of the following are setups,material handling,and inspection all possible examples of?

A factory produces 108,000 3D televisions per quarter.A total of 12,000 production hours are used within the factory per quarter.What is the velocity in units per hour?

The value-added standard is the waste-free component of the value-added activity.

Which of the following is an example of an activity necessary to comply with Canada Customs and Revenue Agency?

A company takes 15,000 hours to produce 30,000 units of a product.What is the velocity?

Match each item with the correct statement below. -Financial and nonfinancial information items that describe individual activities

Zero defects means that most products conform to specifications.

Producing 20,000 cell phone units requires $600,000 of prime costs,uses 4,000 machine hours,and takes 2,400 setup hours.The activity rates are $80 per machine hour and $200 per setup hour.What is the unit cost of a cell phone?

A production dictionary lists the activities in an organization along with some critical activity attributes.

One way to improve efficiency is to produce higher activity output with higher cost.

What is the term for activities that are considered unnecessary to staying in business?

Environmental costs are costs that are incurred because poor environmental quality exists.

What is the aim of activity-based management?

Discretionary activities are necessary to comply with legal mandates.

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