Exam 7: Activity-Based Costing and Management

JIT Non-JIT Sales Orders 300 20 Sales Calls 25 25 Service Calls 150 75 Average Order Size 100 1,000 Manufacturing Cost/Unit \ 50 \ 50 Customer Costs: Processing Sales Orders \ 200,000 Selling Goods \ 120,000 Servicing Goods \ 150,000 Total \ 470,000 -Refer to the Figure.What is the total customer cost for the JIT distributor?

What are non-value-added activities?

Which of the following are assigned using direct tracing and resource drivers?

One of the three major dimensions of measuring activity performance is quality.

Assume that the accounts payable department of a company has five clerks; each one is paid $25,000 per year ($125,000 total clerical salaries).On average,the clerks spend: 20% of time on processing payments 30% of time matching invoices,receiving documents,and billing statement 50% of time correcting errors in the various documents In addition,long distance telephone costs of $1,700 are directly traced to the activity "correcting errors." A. Assign the clerical salary cost to each of the three activities. B. What is the total cost of the "correcting errors" activity?

Refer to the Figure.What is the activity rate for reworking products on the basis of rework hours?

Match each item with the correct statement below. -Process that answers the question "How many people perform the activities?"

One of the questions answered by activity analysis should be "What activities are done?"

Factors that measure the consumption of activities by products and other cost objects are value-added costs.

Match each item with the correct statement below. -System that emphasizes direct tracing and driver tracing

Control activities are performed by an organization or its customers in response to poor quality.

What type of costs are field trials and quality engineering?

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 an activity rate for receiving that is based on receiving orders.What would be the receiving costs allocated to the basic?

What is the term for the process of decreasing the time and resources required by an activity?

Which of the following is defined as a category of quality-related costs?

Setting up equipment \ 8,000 Machining 48,000 The controller has collected the expected annual prime costs for each product,the machine hours,the setup hours,and the expected production. High-end Inexpensive Direct Labour \ 24,000 \ 8,000 Direct Materials 15,000 4,000 Units 2,000 2,000 Machine Hours 1,000 3,000 Setup Hours 150 50 -Refer to the Figure.What is the overhead cost per unit for high-end laptops when using a plantwide rate that is based on direct labour costs?

Match each item with the correct statement below. -Resources consumed by the activity in producing its output.

Refer to StrongLive Company.StrongLive Company uses activity-based costing to calculate product costs. A. Calculate the per unit product cost for a Hybrid bike. B. Calculate the per unit product cost for a Road bike. C. Assume StrongLive Company adds 43% to the cost of a Hybrid bike and 38% to the cost of a Road bike obtain the selling prices. Calculate the selling prices for a Hybrid bike and a Road bike.

Using the original design,a machine requires 24 hours of setup time.By redesigning the machine,the setup time is reduced by 35%.The cost per setup hour is $250.What is the reduction in non-value-added cost per setup?

What is the activity based costing hierarchy? Give an example for each.