Question 1

Match each item with the correct statement below.
-Financial and nonfinancial information items that describe individual 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 2

Andiamo Manufacturing produces two types of tablets: basic and deluxe. The tablets 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:
 $$\begin{array} { l r r r r } 
\text { Product } & \text { Machine Hours } & \text { Setups } & \text { Receiving Orders } & \text { Packing Orders } \
\text { basic } & 20,000 & 200 & 100 & 800 \
\text { deluxe } & 20,000 & 500 & 400 & 4,000 \
\text { Costs } & \$ 80,000 & \$ 60,000 & \$ 10,000 & \$ 30,000
\end{array}$$
-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?

Accepted Answer

A) $1,200 
B) $1,600 
C) $1,800 
D) $2,000 
A) $1,200 
B) $1,600 
C) $1,800 
D) $2,000

Question 3

Which ratio measures the proportion of an activity consumed by a product?

Accepted Answer

A) production ratio 
B) consumption ratio 
C) efficiency ratio 
D) quality ratio 
A) production ratio 
B) consumption ratio 
C) efficiency ratio 
D) quality ratio

Question 4

Which of the following is an example of an activity necessary to comply with Canada Customs and Revenue Agency?

Accepted Answer

A) recreational activity 
B) discretionary activity 
C) recommended activity 
D) required activity 
A) recreational activity 
B) discretionary activity 
C) recommended activity 
D) required activity

Question 5

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

Accepted Answer

A) direct analysis 
B) activity analysis 
C) driver analysis 
D) causal analysis 
A) direct analysis 
B) activity analysis 
C) driver analysis 
D) causal analysis

Question 6

Activity analysis is the effort expended to identify those factors that are the root causes of activity costs.

Accepted Answer

A) True 
 B)False

Question 7

In activity-based costing,what are interviews and surveys used to identify?

Accepted Answer

A) quality 
B) velocity 
C) value 
D) activities 
A) quality 
B) velocity 
C) value 
D) activities

Question 8

Activity input measure is the result or product of an activity.

Accepted Answer

A) True 
 B)False

Question 9

The receiving department of Powen has three activities: unloading, counting goods, and inspecting. Unloading requires a forklift that is leased for $15,000 per year. The forklift is used only for unloading. The fuel for the forklift is $2,000 per year. Inspection requires special testing equipment that has a depreciation of $500 per year and an operating cost of $1,000 per year. Receiving has four employees who each have an average salary of $35,000 per year. The work distribution matrix for the receiving personnel is as follows:
 $$\begin{array}{l}
\text { Percentage of Time }\
\begin{array} { l c } 
\text { Activity } & \text { on Each Activity } \
\text { Unloading } & 25 \% \
\text { Counting } & 40 \% \
\text { Inspecting } & 35 \%
\end{array}
\end{array}$$
-Refer to the Figure.What is the cost for inspection?

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 10

A volume-based costing system tends to be allocation-intensive.

Accepted Answer

A) True 
 B)False

Question 11

Match each item with the correct statement below.
-An activity that increases the time spent on or cost of a product or service without increasing its worth to the customer

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 12

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 13

Efficiency is the reciprocal of cycle time.

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

One way to improve efficiency is to produce higher activity output with higher cost.

Accepted Answer

A) True 
 B)False

Question 16

Tigra Company manufactures engines. Tigra produces all the parts necessary for its engines except for one electronic component, which is purchased from two local suppliers: Customer 1 and Customer 2. Both suppliers are reliable and rarely deliver late; however, Customer 1 sells the component for $10.00 per unit and Customer 2 sells the same component for $8.95. Hamilton purchases 70% of its components from Customer 2 because of the lower price. The total annual demand is 75,000 units.
 I. Activity Data
$\begin{array}{ll}
\text { Inspecting components (sampling only) } & \$ 190,000 \
\text { Reworking products (due to failed component) } & \$ 2,254,000 \
\text { Warranty work (due to failed component) } & \$ 1,723,000
\end{array}$
II. Supplier Data
$\begin{array}{lrr}&\text { Customer } 1&\text { Customer } 2\
\text { Units Purchase Price } & \$ 10.00 & \$ 8.95 \
\text { Units Purchased } & 22,500 & 52,500 \
\text { Sampling Hours } & 50 & 2,450 \
\text { Rework Hours } & 135 & 3,625 \
\text { Warranty Hours } & 475 & 6,000
\end{array}$
-Refer to the Figure.What is the activity rate for reworking products on the basis of rework hours?

Accepted Answer

A) $595 per hour 
B) $599 per hour 
C) $602 per hour 
D) $605 per hour 
A) $595 per hour 
B) $599 per hour 
C) $602 per hour 
D) $605 per hour

Question 17

Match each item with the correct statement below.
-Number of units of output that can be produced in a give period of time

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

A product currently requires eight moves.By changing the plant layout,the number of moves can be reduced to zero.The cost per move is $150.What is the reduction in the non-value-added cost of the moving activity?

Accepted Answer

A) $0 
B) $150 
C) $600 
D) $1,200 
A) $0 
B) $150 
C) $600 
D) $1,200

Question 19

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

Accepted Answer

A) prevention costs 
B) appraisal costs 
C) value added costs 
D) external failure costs 
A) prevention costs 
B) appraisal costs 
C) value added costs 
D) external failure costs

Question 20

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

Match each item with the correct statement below. -Financial and nonfinancial information items that describe individual activities

Which ratio measures the proportion of an activity consumed by a product?

Which of the following is an example of an activity necessary to comply with Canada Customs and Revenue Agency?

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

Activity analysis is the effort expended to identify those factors that are the root causes of activity costs.

In activity-based costing,what are interviews and surveys used to identify?

Activity input measure is the result or product of an activity.

A volume-based costing system tends to be allocation-intensive.

Match each item with the correct statement below. -An activity that increases the time spent on or cost of a product or service without increasing its worth to the customer

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

Efficiency is the reciprocal of cycle time.

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

One way to improve efficiency is to produce higher activity output with higher cost.

Match each item with the correct statement below. -Number of units of output that can be produced in a give period of time

A product currently requires eight moves.By changing the plant layout,the number of moves can be reduced to zero.The cost per move is $150.What is the reduction in the non-value-added cost of the moving activity?

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

What are the two classifications of activity drivers?

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

Match each item with the correct statement below. -Financial and nonfinancial information items that describe individual activities

Which ratio measures the proportion of an activity consumed by a product?

Which of the following is an example of an activity necessary to comply with Canada Customs and Revenue Agency?

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

Activity analysis is the effort expended to identify those factors that are the root causes of activity costs.

In activity-based costing,what are interviews and surveys used to identify?

Activity input measure is the result or product of an activity.

A volume-based costing system tends to be allocation-intensive.

Match each item with the correct statement below. -An activity that increases the time spent on or cost of a product or service without increasing its worth to the customer

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

Efficiency is the reciprocal of cycle time.

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

One way to improve efficiency is to produce higher activity output with higher cost.

Match each item with the correct statement below. -Number of units of output that can be produced in a give period of time

A product currently requires eight moves.By changing the plant layout,the number of moves can be reduced to zero.The cost per move is $150.What is the reduction in the non-value-added cost of the moving activity?

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

What are the two classifications of activity drivers?

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