Exam 7: Activity-Based Costing and Management

A company takes 10,000 hours to produce 20,000 units of a product.What is the cycle time?

Activities necessary to remain in business are called value added activities.

Match each item with the correct statement below. -The relationship of activity inputs to activity outputs

Unit-level activities are performed each time a batch is produced.

Gleen Company has a JIT system in place.Each manufacturing cell is dedicated to the production of a single product or major subassembly.One cell,dedicated to the production of guitar pickups,has four operations: machining,finishing,assembly,and qualifying (testing). For the coming year,the pickup cell has the following budgeted costs and cell time (both at theoretical capacity): Cell time: 8,000 hours Theoretical output: 60,000 pickups During the year,the following actual results were obtained: Actual cell time: 8,000 hours Actual output: 50,000 pickups A. Compute the theoretical velocity for the cell per hour. B. Compute the theoretical cycle time in minutes. C. Compute the actual velocity for the cell per hour. D. Compute the actual cycle time in minutes.

What costs are incurred to determine whether products and services are conforming to their requirements or customer needs?

Percentage of Time Activity on Each Activity Unloading 25\% Counting 40\% Inspecting 35\% -Refer to the Figure.What is the cost for inspection?

Percentage of Time Activity on Each Activity Unloading 25\% Counting 40\% Inspecting 35\% -Refer to the Figure.What is the cost of counting?

What type of analysis is concerned with identifying the root causes of activity costs?

Assume that the accounts payable department of a company has 10 clerks; each one is paid $25,000 per year ($250,000 total clerical salaries).Six of the clerks spend the following percentages of time on the three activities: 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 One clerk,the head clerk,spends 50% of her time on administrative duties and the remainder on error correction.The remaining three clerks spend 30% of their time on processing payments and the remaining 70% of their time on matching documents. 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 and to administration. B. What is the total cost of the "correcting errors" activity?

Efficiency is the reciprocal of cycle time.

Which of the following is NOT defined as a category of quality-related costs?

Randy Candy Company produces candy sticks (hooked and straight).Both products pass through two producing departments.The hooked stick's production is much more labour-intensive than the straight stick.The straight stick is also more popular.The following data have been gathered for the two products: Total overhead costs equal $400,000.Randy Candy applies overhead based on direct labour hours.

Which of the following must be determined to calculate an activity rate?

A factory produces 175,000 3D televisions per quarter.A total of 8,750 production hours are used within the factory per quarter.What is the cycle time in minutes?

Appraisal costs are incurred to prevent poor quality in the products or services being produced.

Which matrix is derived from the interview process (or written survey)?

Match each item with the correct statement below. -The number of times an activity is performed.

Refer to the Figure.What is the activity rate for warranty work on the basis of warranty hours?

Resource drivers are factors that measure the consumption of resources by activities.