Question 1

A volume-based costing system emphasizes direct tracing and driver tracing.

Accepted Answer

A) True 
 B)False

Question 2

Match each item with the correct statement below.
-Activities that are performed each time a unit is produced.

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 3

With its original design, a machine requires 14 hours of setup time.By redesigning the machine, the setup time is reduced by 30%.The cost per setup hour is $325.Calculate the reduction in the nonvalue-added cost per setup.

Accepted Answer

A)  $1,365 per setup 
B)  $1,225 per setup 
C)  $450 per setup 
D)  $800 per setup 
E)  $2,025 per setup 
A)  $1,365 per setup 
B)  $1,225 per setup 
C)  $450 per setup 
D)  $800 per setup 
E)  $2,025 per setup

Question 4

Assume that a company spends $15,000 a year for inspecting, $45,000 for purchasing, and $26,000 for reworking products.A good estimate of nonvalue-added costs would be:

Accepted Answer

A)  $60,000. 
B)  $41,000. 
C)  $71,000. 
D)  $45,000. 
E)  $26,000. 
A)  $60,000. 
B)  $41,000. 
C)  $71,000. 
D)  $45,000. 
E)  $26,000.

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

The process of choosing among different sets of activities caused by competing strategies refers to

Accepted Answer

A)  activity drivers. 
B)  activity inputs. 
C)  activity outputs. 
D)  activity selection. 
A)  activity drivers. 
B)  activity inputs. 
C)  activity outputs. 
D)  activity selection.

Question 7

An activity-based costing system first assigns costs to activities and then to cost objects.

Accepted Answer

A) True 
 B)False

Question 8

A ____________________ is classified as value-added provided it simultaneously meets three conditions.

Accepted Answer

discretion

Question 9

A(n) ____ is derived from the interview process (or written survey).

Accepted Answer

A)  work distribution matrix 
B)  activity explanation matrix 
C)  driver consumption matrix 
D)  value analysis matrix 
E)  tracing matrix 
A)  work distribution matrix 
B)  activity explanation matrix 
C)  driver consumption matrix 
D)  value analysis matrix 
E)  tracing matrix

Question 10

____ are assigned using direct tracing and resource drivers.

Accepted Answer

A)  Resources 
B)  Costs 
C)  Profits 
D)  Materials 
E)  Products 
A)  Resources 
B)  Costs 
C)  Profits 
D)  Materials 
E)  Products

Question 11

A plant produces 85 different electronic products.Each product requires an average of seven components that are purchased externally.By redesigning the products, it is possible to produce the 85 products so that they all have four components in common.This will reduce the demand for purchasing, receiving, and paying bills.Estimated savings from the reduced demand are $1,400,000 per year.Calculate the nonvalue-added cost of purchasing, receiving, and paying bills.

Accepted Answer

A)  $1,400,000 
B)  $1,000,000 
C)  $900,000 
D)  $600,000 
A)  $1,400,000 
B)  $1,000,000 
C)  $900,000 
D)  $600,000

Question 12

In an activity dictionary, types of resources consumed is an example of a(n)

Accepted Answer

A)  activity sharing. 
B)  quality. 
C)  activity attribute. 
D)  allocation. 
A)  activity sharing. 
B)  quality. 
C)  activity attribute. 
D)  allocation.

Question 13

Costs that are caused by the inefficient performance of value-added activities are value added costs.

Accepted Answer

A) True 
 B)False

Question 14

To calculate an activity rate, the practical capacity of each activity must be determined.

Accepted Answer

A) True 
 B)False

Question 15

______________ is concerned with doing the activity right the first time it is performed.

Accepted Answer

The answer of ______________ is concerned with doing the activity...

Question 16

​Which of the following is true of nonvalue-added activities?

Accepted Answer

A)  Nonvalue-added activities are all activities other than those that are absolutely essential to remain in business. 
B)  Nonvalue-added activities are necessary to comply with legal mandates. 
C)  Nonvalue-added activities enable other activities to be performed. 
D)  Nonvalue-added activities help meet the organization's needs, not the product needs. 
A)  Nonvalue-added activities are all activities other than those that are absolutely essential to remain in business. 
B)  Nonvalue-added activities are necessary to comply with legal mandates. 
C)  Nonvalue-added activities enable other activities to be performed. 
D)  Nonvalue-added activities help meet the organization's needs, not the product needs.

Question 17

____ focuses on the relationship of activity inputs to activity outputs.

Accepted Answer

A)  Activity output measure 
B)  Efficiency 
C)  Velocity 
D)  Activity drivers 
E)  None of these. 
A)  Activity output measure 
B)  Efficiency 
C)  Velocity 
D)  Activity drivers 
E)  None of these.

Question 18

_________________________ is a system-wide, integrated approach that focuses management's attention on activities with the objective of improving customer value and profit achieved by providing this value.

Accepted Answer

Activity-b

Question 19

Witness Manufacturing produces two types of cameras: 35mm and digital.The cameras are produced using one continuous process.Four activities have been identified: machining, setups, receiving, and packing.Resource drivers have been used to assign costs to each activity.The overhead activities, their costs, and the other related data are as follows:   
-   Calculate the consumption ratio for setups on the digital cameras.(Note: Round answer to two decimal places.)

Accepted Answer

A)  0.56 
B)  0.80 
C)  0.45 
D)  0.69 
E)  0.50 
A)  0.56 
B)  0.80 
C)  0.45 
D)  0.69 
E)  0.50

Question 20

___________________ are performed each time a unit is produced.

Accepted Answer

Unit-level

A volume-based costing system emphasizes direct tracing and driver tracing.

Match each item with the correct statement below. -Activities that are performed each time a unit is produced.

With its original design, a machine requires 14 hours of setup time.By redesigning the machine, the setup time is reduced by 30%.The cost per setup hour is $325.Calculate the reduction in the nonvalue-added cost per setup.

Assume that a company spends $15,000 a year for inspecting, $45,000 for purchasing, and $26,000 for reworking products.A good estimate of nonvalue-added costs would be:

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

The process of choosing among different sets of activities caused by competing strategies refers to

An activity-based costing system first assigns costs to activities and then to cost objects.

A ____________________ is classified as value-added provided it simultaneously meets three conditions.

A(n) ____ is derived from the interview process (or written survey).

____ are assigned using direct tracing and resource drivers.

In an activity dictionary, types of resources consumed is an example of a(n)

Costs that are caused by the inefficient performance of value-added activities are value added costs.

To calculate an activity rate, the practical capacity of each activity must be determined.

______________ is concerned with doing the activity right the first time it is performed.

Which of the following is true of nonvalue-added activities?

____ focuses on the relationship of activity inputs to activity outputs.

_________________________ is a system-wide, integrated approach that focuses management's attention on activities with the objective of improving customer value and profit achieved by providing this value.

___________________ are performed each time a unit is produced.

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behavior, Cost Forecasting, and Segmented Income Statements

Job-Order Costing and Normal Cost Overhead Application

Process Costing

Cost-Volume-Profit Analysis

Tactical Decision-Making and Relevant Costing

Profit Planning and Flexible Budgets

Standard Costing and Variance Analysis

Performance Evaluation and Decentralization

Capital Investment Decisions

Emerging Topics in Managerial Accounting: Sustainability, Quality Cost, Lean Accounting, International Issues, Enterprise Risk Management, the Managerial Accountant in Forensicfraud Accounting

Statement of Cash Flows

Financial Statement Analysis

Filters

Exam 5: Activity-Based Costing and Management

A volume-based costing system emphasizes direct tracing and driver tracing.

Match each item with the correct statement below. -Activities that are performed each time a unit is produced.

With its original design, a machine requires 14 hours of setup time.By redesigning the machine, the setup time is reduced by 30%.The cost per setup hour is $325.Calculate the reduction in the nonvalue-added cost per setup.

Assume that a company spends $15,000 a year for inspecting, $45,000 for purchasing, and $26,000 for reworking products.A good estimate of nonvalue-added costs would be:

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

The process of choosing among different sets of activities caused by competing strategies refers to

An activity-based costing system first assigns costs to activities and then to cost objects.

A ____________________ is classified as value-added provided it simultaneously meets three conditions.

A(n) ____ is derived from the interview process (or written survey).

____ are assigned using direct tracing and resource drivers.

In an activity dictionary, types of resources consumed is an example of a(n)

Costs that are caused by the inefficient performance of value-added activities are value added costs.

To calculate an activity rate, the practical capacity of each activity must be determined.

______________ is concerned with doing the activity right the first time it is performed.

​Which of the following is true of nonvalue-added activities?

____ focuses on the relationship of activity inputs to activity outputs.

_________________________ is a system-wide, integrated approach that focuses management's attention on activities with the objective of improving customer value and profit achieved by providing this value.

___________________ are performed each time a unit is produced.

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behavior, Cost Forecasting, and Segmented Income Statements

Job-Order Costing and Normal Cost Overhead Application

Process Costing

Cost-Volume-Profit Analysis

Tactical Decision-Making and Relevant Costing

Profit Planning and Flexible Budgets

Standard Costing and Variance Analysis

Performance Evaluation and Decentralization

Capital Investment Decisions

Emerging Topics in Managerial Accounting: Sustainability, Quality Cost, Lean Accounting, International Issues, Enterprise Risk Management, the Managerial Accountant in Forensicfraud Accounting

Statement of Cash Flows

Financial Statement Analysis

Filters

Which of the following is true of nonvalue-added activities?