Question 1

Driver analysis identifies performance levels.

Accepted Answer

A) True 
 B)False

Question 2

Reducing non-value added costs decreases activity deficiency.

Accepted Answer

A) True 
 B)False

Question 3

An example of activity reduction would be

Accepted Answer

A)  improving cycle time so the need for expediting is eliminated. 
B)  redesigning products to lead to a reduced cost set of activities. 
C)  designing a new product that uses components already used by another product. 
D)  reducing demand for customer complaint handling by improving product quality. 
A)  improving cycle time so the need for expediting is eliminated. 
B)  redesigning products to lead to a reduced cost set of activities. 
C)  designing a new product that uses components already used by another product. 
D)  reducing demand for customer complaint handling by improving product quality.

Question 4

Each unit of product requires 16 pounds of material. Due to scrap and rework, each unit has been averaging 18 pounds of material. The material costs $4 per pound. The non-value-added costs are

Accepted Answer

A)  $8. 
B)  $4. 
C)  $64. 
D)  $72. 
A)  $8. 
B)  $4. 
C)  $64. 
D)  $72.

Question 5

A company has 19 days of finished goods inventory on hand to avoid stockouts. The carrying costs of the inventory average $6,000 per day. The value-added costs would be

Accepted Answer

A)  $100,000. 
B)  $-0-. 
C)  $5,000. 
D)  $10,000. 
A)  $100,000. 
B)  $-0-. 
C)  $5,000. 
D)  $10,000.

Question 6

Financial measures of performance focus on the dollar effect of activity performance changes.

Accepted Answer

A) True 
 B)False

Question 7

A time-and-motion study revealed that it should take 3 hours to produce a product that currently takes 7.5 hours to produce. Labor is $18 per hour. The value-added costs are

Accepted Answer

A)  $27. 
B)  $135. 
C)  $81. 
D)  $54. 
A)  $27. 
B)  $135. 
C)  $81. 
D)  $54.

Question 8

Activity-based costing does not provide good information for activity-based management.

Accepted Answer

A) True 
 B)False

Question 9

Cost reduction is a measure of activity improvement.

Accepted Answer

A) True 
 B)False

Question 10

Performance measurement is concerned with how well activities are performed.

Accepted Answer

A) True 
 B)False

Question 11

Mattison Company has developed cost formulas for the drivers of the following production activities:   If the actual activity was 20 setups and the actual fixed cost for inspections was $28,000 and the variable cost for inspections was $5,000, the total variance for inspections is due to

Accepted Answer

A)  unfavorable variance on fixed costs. 
B)  favorable variance on fixed costs. 
C)  favorable variance on variable costs. 
D)  unfavorable variance on variable costs. 
A)  unfavorable variance on fixed costs. 
B)  favorable variance on fixed costs. 
C)  favorable variance on variable costs. 
D)  unfavorable variance on variable costs.

Question 12

A firm's warranty costs are $125,000 per year. A competitor's warranty costs are $25,000 per year. The value-added costs are

Accepted Answer

A)  $125,000. 
B)  $100,000. 
C)  $25,000. 
D)  $-0-. 
A)  $125,000. 
B)  $100,000. 
C)  $25,000. 
D)  $-0-.

Question 13

Metropolitan, Inc., sells one of its products for $40 each. Sales volume averages 2,000 units per year. Recently, its main competitor reduced the price of its product to $28. Metropolitan expects sales to drop dramatically unless it matches the competitor's price. In addition, the current profit per unit must be maintained. Information about the product (for production of 2,000) is as follows:
   Required:

Accepted Answer

The answer of Metropolitan, Inc., sells one of its products...

Question 14

Which of the following is NOT an expected outcome of activity analysis?

Accepted Answer

A)  What activities are performed? 
B)  How many people perform the activities? 
C)  The time and resources required to perform the activities 
D)  All of these are expected outcomes. 
A)  What activities are performed? 
B)  How many people perform the activities? 
C)  The time and resources required to perform the activities 
D)  All of these are expected outcomes.

Question 15

Which of the following is descriptive of financial-based responsibility accounting?

Accepted Answer

A)  It assumes that activities are linked. 
B)  It assigns responsibility to organization units. 
C)  Its control emphasis is costs. 
D)  Its goal is continuous improvement. 
A)  It assumes that activities are linked. 
B)  It assigns responsibility to organization units. 
C)  Its control emphasis is costs. 
D)  Its goal is continuous improvement.

Question 16

Value-added costs are standard costs based on

Accepted Answer

A)  currently attainable standards. 
B)  ideal usage standards. 
C)  cycle time. 
D)  the value added. 
A)  currently attainable standards. 
B)  ideal usage standards. 
C)  cycle time. 
D)  the value added.

Question 17

Non-value-added activities

Accepted Answer

A)  are unnecessary inputs. 
B)  are valued outputs to internal users. 
C)  are valued outputs to external users. 
D)  help meet the organization's needs, not the product needs. 
A)  are unnecessary inputs. 
B)  are valued outputs to internal users. 
C)  are valued outputs to external users. 
D)  help meet the organization's needs, not the product needs.

Question 18

The effort expended to identify those factors that are the root causes of activity costs is(are) called:

Accepted Answer

A)  Driver analysis 
B)  Activity outputs 
C)  Activity inputs 
D)  Value-added activities 
A)  Driver analysis 
B)  Activity outputs 
C)  Activity inputs 
D)  Value-added activities

Question 19

A company has 5 days of finished goods inventory on hand to avoid stockouts. The carrying costs of the inventory average $2,500 per day. The non-value-added costs are

Accepted Answer

A)  $-0-. 
B)  500. 
C)  $2,500. 
D)  $12,500. 
A)  $-0-. 
B)  500. 
C)  $2,500. 
D)  $12,500.

Question 20

The process that focuses on accountability for activities rather than costs and emphasizes systemwide performance is called __________ .
or
or

Accepted Answer

process value analys

Driver analysis identifies performance levels.

Reducing non-value added costs decreases activity deficiency.

An example of activity reduction would be

Each unit of product requires 16 pounds of material. Due to scrap and rework, each unit has been averaging 18 pounds of material. The material costs $4 per pound. The non-value-added costs are

A company has 19 days of finished goods inventory on hand to avoid stockouts. The carrying costs of the inventory average $6,000 per day. The value-added costs would be

Financial measures of performance focus on the dollar effect of activity performance changes.

A time-and-motion study revealed that it should take 3 hours to produce a product that currently takes 7.5 hours to produce. Labor is $18 per hour. The value-added costs are

Activity-based costing does not provide good information for activity-based management.

Cost reduction is a measure of activity improvement.

Performance measurement is concerned with how well activities are performed.

Mattison Company has developed cost formulas for the drivers of the following production activities: If the actual activity was 20 setups and the actual fixed cost for inspections was $28,000 and the variable cost for inspections was $5,000, the total variance for inspections is due to

A firm's warranty costs are $125,000 per year. A competitor's warranty costs are $25,000 per year. The value-added costs are

Which of the following is NOT an expected outcome of activity analysis?

Which of the following is descriptive of financial-based responsibility accounting?

Value-added costs are standard costs based on

Non-value-added activities

The effort expended to identify those factors that are the root causes of activity costs is(are) called:

A company has 5 days of finished goods inventory on hand to avoid stockouts. The carrying costs of the inventory average $2,500 per day. The non-value-added costs are

The process that focuses on accountability for activities rather than costs and emphasizes systemwide performance is called __________ . or or

Introduction to Cost Management

Basic Cost Management Concepts

Cost Behavior

Activity-Based Costing

Product and Service Costing: Job-Order System

Process Costing

Allocating Costs of Support Departments and Joint Products

Budgeting for Planning and Control Key

Standard Costing: a Functional-Based Control Approach

Decentralization: Responsibility Accounting, Performance Evaluation, and Transfer Pricing

Strategic Cost Management

The Balanced Scorecard: Strategic-Based Control

Quality and Environmental Cost Management

Lean Accounting and Productivity Measurement

Cost-Volume-Profit Analysis

Activity Resource Usage Model and Tactical Decision Making

Pricing and Profitability Analysis

Capital Investment

Inventory Management: Economic Order Quantity, Jit, and the Theory of Constraints

Filters

Exam 12: Activity-Based Management

Driver analysis identifies performance levels.

Reducing non-value added costs decreases activity deficiency.

An example of activity reduction would be

Each unit of product requires 16 pounds of material. Due to scrap and rework, each unit has been averaging 18 pounds of material. The material costs $4 per pound. The non-value-added costs are

A company has 19 days of finished goods inventory on hand to avoid stockouts. The carrying costs of the inventory average $6,000 per day. The value-added costs would be

Financial measures of performance focus on the dollar effect of activity performance changes.

A time-and-motion study revealed that it should take 3 hours to produce a product that currently takes 7.5 hours to produce. Labor is $18 per hour. The value-added costs are

Activity-based costing does not provide good information for activity-based management.

Cost reduction is a measure of activity improvement.

Performance measurement is concerned with how well activities are performed.

Mattison Company has developed cost formulas for the drivers of the following production activities: If the actual activity was 20 setups and the actual fixed cost for inspections was $28,000 and the variable cost for inspections was $5,000, the total variance for inspections is due to

A firm's warranty costs are $125,000 per year. A competitor's warranty costs are $25,000 per year. The value-added costs are

Which of the following is NOT an expected outcome of activity analysis?

Which of the following is descriptive of financial-based responsibility accounting?

Value-added costs are standard costs based on

Non-value-added activities

The effort expended to identify those factors that are the root causes of activity costs is(are) called:

A company has 5 days of finished goods inventory on hand to avoid stockouts. The carrying costs of the inventory average $2,500 per day. The non-value-added costs are

The process that focuses on accountability for activities rather than costs and emphasizes systemwide performance is called __________ . or or

Introduction to Cost Management

Basic Cost Management Concepts

Cost Behavior

Activity-Based Costing

Product and Service Costing: Job-Order System

Process Costing

Allocating Costs of Support Departments and Joint Products

Budgeting for Planning and Control Key

Standard Costing: a Functional-Based Control Approach

Decentralization: Responsibility Accounting, Performance Evaluation, and Transfer Pricing

Strategic Cost Management

The Balanced Scorecard: Strategic-Based Control

Quality and Environmental Cost Management

Lean Accounting and Productivity Measurement

Cost-Volume-Profit Analysis

Activity Resource Usage Model and Tactical Decision Making

Pricing and Profitability Analysis

Capital Investment

Inventory Management: Economic Order Quantity, Jit, and the Theory of Constraints

Filters