Question 1

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

Accepted Answer

A) 0.50 hour 
B) 0.75 hour 
C) 1.00 hour 
D) 2.00 hours 
A) 0.50 hour 
B) 0.75 hour 
C) 1.00 hour 
D) 2.00 hours

Question 2

What is the aim of activity-based management?

Accepted Answer

A) to identify and eliminate all unnecessary activities 
B) to decrease the efficiency of necessary activities 
C) to add new activities that decrease value 
D) to increase non-value-added activities 
A) to identify and eliminate all unnecessary activities 
B) to decrease the efficiency of necessary activities 
C) to add new activities that decrease value 
D) to increase non-value-added activities

Question 3

Moustache Manufacturing has two classes of distributors: JIT distributors and non-JIT distributors. The JIT distributor places small, frequent orders, and the non-JIT distributor tends to place larger, less frequent orders. Both types of distributors purchase the same product. The customer activities and costs for the previous quarter are found below:
 $$\begin{array} { l r r } 
& \text { JIT } & \text { Non-JIT } \
\text { Sales Orders } & 300 & 20 \
\text { Sales Calls } & 25 & 25 \
\text { Service Calls } & 150 & 75 \
\text { Average Order Size } & 100 & 1,000 \
\text { Manufacturing Cost/Unit } & \$ 50 & \$ 50
\end{array}$$ $$\begin{array}{l}
\text { Customer Costs: }\
\begin{array} { l l } 
\text { Processing Sales Orders } & \$ 200,000 \
\text { Selling Goods } & \$ 120,000 \
\text { Servicing Goods } & \$ 150,000 \
\text { Total } & \$ 470,000
\end{array}
\end{array}$$
-Refer to the Figure.What is the total customer cost for the JIT distributor?

Accepted Answer

A) $60,000 
B) $100,050 
C) $187,500 
D) $347,550 
A) $60,000 
B) $100,050 
C) $187,500 
D) $347,550

Question 4

Assume that the accounts payable department of a company has five clerks; each one is paid $25,000 per year ($125,000 total clerical salaries).On average,the clerks spend:
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
In addition,long distance telephone costs of $1,700 are directly traced to the activity "correcting errors."
 A. Assign the clerical sal ary cost to each of the three activities.
B. What is the total cost of the "correcting errors" activity?

Accepted Answer

The answer of Assume that the accounts payable department of...

Question 5

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 6

Match each item with the correct statement below.
-System that emphasizes direct tracing and driver tracing

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 7

The robust quality view of conformance is that variations in the product are acceptable.

Accepted Answer

A) True 
 B)False

Question 8

A manual process takes 36 minutes of direct labour time and 12 kg of material to make a product.Automating the process requires 24 minutes of machine time and 10 kg of material.The cost per labour hour is $18,the cost per machine hour is $14,and the cost per kilogram of materials is $22.What is the non-value-added cost per unit?

Accepted Answer

A) $5.60 per unit 
B) $10.80 per unit 
C) $44.00 per unit 
D) $49.20 per unit 
A) $5.60 per unit 
B) $10.80 per unit 
C) $44.00 per unit 
D) $49.20 per unit

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

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 11

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

Accepted Answer

A) practical capacity of each activity 
B) expenditure level of each activity 
C) processing ratio of each activity 
D) value of each activity 
A) practical capacity of each activity 
B) expenditure level of each activity 
C) processing ratio of each activity 
D) value of each activity

Question 12

Which of the following is NOT a category of environmental cost?

Accepted Answer

A) prevention costs 
B) detection costs 
C) total quality costs 
D) internal failure costs 
A) prevention costs 
B) detection costs 
C) total quality costs 
D) internal failure costs

Question 13

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?

Accepted Answer

A) 3.00 
B) 3.83 
C) 3.87 
D) 3.92 
A) 3.00 
B) 3.83 
C) 3.87 
D) 3.92

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

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 only machine hours to calculate a plantwide overhead rate.What would be the total overhead assigned to the basic tablets?

Accepted Answer

A) $60,000 
B) $80,000 
C) $90,000 
D) $180,000 
A) $60,000 
B) $80,000 
C) $90,000 
D) $180,000

Question 16

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 17

Which of the following focuses on the relationship of activity inputs to activity outputs?

Accepted Answer

A) quality 
B) efficiency 
C) time 
D) cycle time 
A) quality 
B) efficiency 
C) time 
D) cycle time

Question 18

What type of costs are packaging inspection and process acceptance?

Accepted Answer

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

Question 19

Refer to StrongLive Company.StrongLive Company uses activity-based costing to calculate product costs.
 A. Calculate the per unit product cost for a Hybrid bike.
B. Calculate the per unit product cost for a Road bike.
Assume StrongLive Company adds $43 \%$ to the cost of a Hybrid bike and $38 \%$ to the cost
C. of a Road bike obtain the selling prices. Calculate the selling prices for a Hybrid bike and a Road bike.

Accepted Answer

The answer of Refer to StrongLive Company.StrongLive Company uses activity-based...

Question 20

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

Accepted Answer

A) True 
 B)False

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

What is the aim of activity-based management?

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?

Match each item with the correct statement below. -System that emphasizes direct tracing and driver tracing

The robust quality view of conformance is that variations in the product are acceptable.

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

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

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

Which of the following is NOT a category of environmental cost?

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.

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

Which of the following focuses on the relationship of activity inputs to activity outputs?

What type of costs are packaging inspection and process acceptance?

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

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

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

What is the aim of activity-based management?

Match each item with the correct statement below. -System that emphasizes direct tracing and driver tracing

The robust quality view of conformance is that variations in the product are acceptable.

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

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

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

Which of the following is NOT a category of environmental cost?

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.

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

Which of the following focuses on the relationship of activity inputs to activity outputs?

What type of costs are packaging inspection and process acceptance?

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

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