Question 1

Which of the following is NOT a possible source of customer diversity?

Accepted Answer

A)  sales support 
B)  order frequency 
C)  geographic distance 
D)  pricing 
A)  sales support 
B)  order frequency 
C)  geographic distance 
D)  pricing

Question 2

A defective product is one that conforms to specifications.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is a view of conformance that assumes an acceptable range of values exists for each specification or quality characteristic?

Accepted Answer

A)  standard 
B)  normal 
C)  common 
D)  traditional 
A)  standard 
B)  normal 
C)  common 
D)  traditional

Question 4

An activity-based costing system first traces costs to activities and then to products.

Accepted Answer

A) True 
 B)False

Question 5

$\begin{array}{lr}
\text { Setting up equipment } & \$ 8,000 \
\text { Machining } & 48,000
\end{array}$ 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 inexpensive laptop's consumption ratio for setup hours?

Accepted Answer

A)  0.25 
B)  0.45 
C)  0.50 
D)  0.75 
A)  0.25 
B)  0.45 
C)  0.50 
D)  0.75

Question 6

What costs are incurred when products and services fail to either conform to requirements or satisfy customer needs after being delivered to customers?

Accepted Answer

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

Question 7

$$\begin{array}{l}
&\text { Percentage of Time }\
\text { Activity } & \text { on Each Activity } \
\text { Unloading } & 25 \% \
\text { Counting } & 40 \% \
\text { Inspecting } & 35 \%
\end{array}$$
-Refer to the Figure.What is the cost of unloading?

Accepted Answer

A)  $50,500 
B)  $52,000 
C)  $54,000 
D)  $56,000 
A)  $50,500 
B)  $52,000 
C)  $54,000 
D)  $56,000

Question 8

SarahLou Company had sales of $2,500,000 for last year.Data on quality-related costs for last year are as follows: $\begin{array}{lr}
\text { Inspection } & 80,000 \
\text { Scrap } & 10,000 \
\text { Rework } & 45,000 \
\text { Quality training } & 20,000 \
\text { Warranty work } & 100,000 \
\text { Customer complaints } & 30,000
\end{array}$ A.	Classify each of the quality-related costs as control (prevention and appraisal), internal failure, or external failure.
B.	What percentage of sales is accounted for by quality-related costs?
C.	If quality-related costs could be reduced to 2% of sales, by how much would SarahLou’s profit increase?

Accepted Answer

The answer of SarahLou Company had sales of $2,500,000 for...

Question 9

Last year,Tevia Inc.shipped 6,000,000 kg of goods to customers at a cost of $4,800,000.Suppose an individual customer orders 40,000 kg and produces $400,000 of revenue.(The total revenue is $40 million.)What amount of shipping cost would be assigned to the customer when using activity-based costing?

Accepted Answer

A)  $4,000 
B)  $8,000 
C)  $32,000 
D)  $40,000 
A)  $4,000 
B)  $8,000 
C)  $32,000 
D)  $40,000

Question 10

What are the two classifications of activity drivers?

Accepted Answer

A)  unit-level and non-unit-level 
B)  exact and inexact 
C)  inputs and outputs 
D)  right and wrong 
A)  unit-level and non-unit-level 
B)  exact and inexact 
C)  inputs and outputs 
D)  right and wrong

Question 11

$$\begin{array} { l r r } 
& \text { JIT } & \text { Non-JIT } \
\text { Sales Orders } & 300 & 20 \
\text { Sales Calls } & 25 & 25 \
\text { Service Calls } & 150 & 75 \
\text { Average Order Size } & 100 & 1,000 \
\text { Manufacturing Cost/Unit } & \$ 50 & \$ 50
\end{array}$$ $$\begin{array}{l}
\text { Customer Costs: }\
\begin{array} { l l } 
\text { Processing Sales Orders } & \$ 200,000 \
\text { Selling Goods } & \$ 120,000 \
\text { Servicing Goods } & \$ 150,000 \
\text { Total } & \$ 470,000
\end{array}
\end{array}$$
-Refer to the Figure.What is the activity rate for servicing goods?

Accepted Answer

A)  $650 per service call 
B)  $667 per service call 
C)  $675 per service call 
D)  $2,000 per service call 
A)  $650 per service call 
B)  $667 per service call 
C)  $675 per service call 
D)  $2,000 per service call

Question 12

Which of the following best characterizes unrealized external failure costs?

Accepted Answer

A)  They are also called societal costs, 
B)  They are paid for by the firm. 
C)  They are not caused by the firm. 
D)  They include the costs of treating toxic materials. 
A)  They are also called societal costs, 
B)  They are paid for by the firm. 
C)  They are not caused by the firm. 
D)  They include the costs of treating toxic materials.

Question 13

Refer to Netplay Company.

Accepted Answer

The answer of Refer to Netplay Company.  ...

Question 14

The moving activity has an expected cost of $80,000.Expected direct labour hours are 20,000,and the expected number of moves is 40,000.What is the best activity rate for moving?

Accepted Answer

A)  $2 per hour 
B)  $2 per move 
C)  $4 per hour 
D)  $4 per move 
A)  $2 per hour 
B)  $2 per move 
C)  $4 per hour 
D)  $4 per move

Question 15

Which of the following is an example of a value-added activity?

Accepted Answer

A)  inspecting 
B)  scheduling 
C)  moving 
D)  supervising 
A)  inspecting 
B)  scheduling 
C)  moving 
D)  supervising

Question 16

Match each item with the correct statement below.
-Factors that measure the consumption of resources by 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 17

Match each item with the correct statement below.
-The length of time it takes to produce a unit of output from the time raw materials are received until the good is delivered to finished goods inventory

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 18

Which of the following is an example of types of resources consumed in an activity dictionary?

Accepted Answer

A)  activity sharing 
B)  qualities 
C)  activity attributes 
D)  allocations 
A)  activity sharing 
B)  qualities 
C)  activity attributes 
D)  allocations

Question 19

Which of the following is one of the three conditions necessary to classify an activity as discretionary?

Accepted Answer

A)  The activity produces a change of state. 
B)  The change of state was achievable by preceding activities. 
C)  The activity does not enable other activities to be performed. 
D)  The activity increases efficiency. 
A)  The activity produces a change of state. 
B)  The change of state was achievable by preceding activities. 
C)  The activity does not enable other activities to be performed. 
D)  The activity increases efficiency.

Question 20

Refer to the Figure.What is the total cost per component associated with using Customer 2 as the supplier?

Accepted Answer

A)  $8.95 
B)  $12.00 
C)  $15.74 
D)  $84.26 
A)  $8.95 
B)  $12.00 
C)  $15.74 
D)  $84.26

Which of the following is NOT a possible source of customer diversity?

A defective product is one that conforms to specifications.

Which of the following is a view of conformance that assumes an acceptable range of values exists for each specification or quality characteristic?

An activity-based costing system first traces costs to activities and then to products.

What costs are incurred when products and services fail to either conform to requirements or satisfy customer needs after being delivered to customers?

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

Last year,Tevia Inc.shipped 6,000,000 kg of goods to customers at a cost of $4,800,000.Suppose an individual customer orders 40,000 kg and produces $400,000 of revenue.(The total revenue is $40 million.)What amount of shipping cost would be assigned to the customer when using activity-based costing?

What are the two classifications of activity drivers?

Which of the following best characterizes unrealized external failure costs?

Refer to Netplay Company.

The moving activity has an expected cost of $80,000.Expected direct labour hours are 20,000,and the expected number of moves is 40,000.What is the best activity rate for moving?

Which of the following is an example of a value-added activity?

Match each item with the correct statement below. -Factors that measure the consumption of resources by activities

Match each item with the correct statement below. -The length of time it takes to produce a unit of output from the time raw materials are received until the good is delivered to finished goods inventory

Which of the following is an example of types of resources consumed in an activity dictionary?

Which of the following is one of the three conditions necessary to classify an activity as discretionary?

Refer to the Figure.What is the total cost per component associated with using Customer 2 as the supplier?

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 possible source of customer diversity?

A defective product is one that conforms to specifications.

Which of the following is a view of conformance that assumes an acceptable range of values exists for each specification or quality characteristic?

An activity-based costing system first traces costs to activities and then to products.

What costs are incurred when products and services fail to either conform to requirements or satisfy customer needs after being delivered to customers?

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

What are the two classifications of activity drivers?

Which of the following best characterizes unrealized external failure costs?

Refer to Netplay Company.

The moving activity has an expected cost of $80,000.Expected direct labour hours are 20,000,and the expected number of moves is 40,000.What is the best activity rate for moving?

Which of the following is an example of a value-added activity?

Match each item with the correct statement below. -Factors that measure the consumption of resources by activities

Match each item with the correct statement below. -The length of time it takes to produce a unit of output from the time raw materials are received until the good is delivered to finished goods inventory

Which of the following is an example of types of resources consumed in an activity dictionary?

Which of the following is one of the three conditions necessary to classify an activity as discretionary?

Refer to the Figure.What is the total cost per component associated with using Customer 2 as the supplier?

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