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 activity rate for processing sales orders?

A) $1.47 per order B) $182.00 per order C) $625.00 per order D) $667.00 per order A) $1.47 per order B) $182.00 per order C) $625.00 per order D) $667.00 per order

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 activity rate for selling goods?

A) $375 per sales call B) $1,200 per sales call C) $2,400 per sales call D) $4,800 per sales call A) $375 per sales call B) $1,200 per sales call C) $2,400 per sales call D) $4,800 per sales call

CompInc. produces two products: a high-end laptop computer and an inexpensive laptop. The two products use two overhead activities, which have the following costs: The controller has collected the expected annual prime costs for each product, the machine hours, the setup hours, and the expected production. $\begin{array}{lr} \text { Setting up equipment } & \$ 8,000 \\ \text { Machining } & 48,000 \end{array}$ \[\begin{array} { l r r } & \text { High-end } & \text { Inexpensive } \\ \text { Direct Labour } & \$ 24,000 & \$ 8,000 \\ \text { Direct Materials } & 15,000 & 4,000 \\ \text { Units } & 2,000 & 2,000 \\ \text { Machine Hours } & 1,000 & 3,000 \\ \text { Setup Hours } & 150 & 50 \end{array}\] -Refer to the Figure.What is the overhead cost per unit for high-end laptops when using a plantwide rate that is based on direct labour costs?

A) $21.00 per laptop B) $14.00 per laptop C) $10.00 per laptop D) $7.00 per laptop A) $21.00 per laptop B) $14.00 per laptop C) $10.00 per laptop D) $7.00 per laptop

Exam 7: Activity-Based Costing and Management

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: JIT Non-JIT Sales Orders 300 20 Sales Calls 25 25 Service Calls 150 75 Average Order Size 100 1,000 Manufacturing Cost/Unit \ 50 \ 50 Customer Costs: Processing Sales Orders \ 200,000 Selling Goods \ 120,000 Servicing Goods \ 150,000 Total \ 470,000 -Refer to the Figure.What is the activity rate for processing sales orders?

(Multiple Choice)

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Question 141

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

(Multiple Choice)

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Question 142

Refer to First Choice Credit Union. A. Calculate the total number of chequing accounts. B. Calculate the yearly overall cost per chequing account. C. Calculate the monthly overall cost per chequing account.

(Essay)

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Question 143

What costs are incurred to avoid poor quality in the products or services being produced?

(Multiple Choice)

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Question 144

What is the term for products having different consumption ratios for different overhead activities?

(Multiple Choice)

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Question 145

What costing method can help a company to become more competitive by providing more accurate cost data?

(Multiple Choice)

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Question 146

A production dictionary lists the activities in an organization along with some critical activity attributes.

(True/False)

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Question 147

What is the term for the process of decreasing the time and resources required by an activity?

(Multiple Choice)

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Question 148

What type of activity is performed in response to poor quality?

(Multiple Choice)

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Question 149

What is the term for the time required to produce one unit of a product?

(Multiple Choice)

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Question 150

What can be caused by using only unit-based activity drivers to assign non-unit-related overhead costs?

(Multiple Choice)

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Question 151

Which of the following is defined as a category of quality-related costs?

(Multiple Choice)

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Question 152

Product diversity means that products consume overhead activities in systematically similar proportions.

(True/False)

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Question 153

CompInc. produces two products: a high-end laptop computer and an inexpensive laptop. The two products use two overhead activities, which have the following costs: The controller has collected the expected annual prime costs for each product, the machine hours, the setup hours, and the expected production. Setting up equipment \ 8,000 Machining 48,000 High-end Inexpensive Direct Labour \ 24,000 \ 8,000 Direct Materials 15,000 4,000 Units 2,000 2,000 Machine Hours 1,000 3,000 Setup Hours 150 50 -Refer to the Figure.What is the overhead cost per unit for high-end laptops when using a plantwide rate that is based on direct labour costs?

(Multiple Choice)

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Question 154

Refer to First Choice Credit Union. A. Calculate the total number of chequing accounts. B. Calculate the yearly overall cost per chequing account. C. Calculate the monthly overall cost per chequing account.

What costs are incurred to avoid poor quality in the products or services being produced?

What is the term for products having different consumption ratios for different overhead activities?

What costing method can help a company to become more competitive by providing more accurate cost data?

A production dictionary lists the activities in an organization along with some critical activity attributes.

What is the term for the process of decreasing the time and resources required by an activity?

What type of activity is performed in response to poor quality?

What is the term for the time required to produce one unit of a product?

What can be caused by using only unit-based activity drivers to assign non-unit-related overhead costs?

Which of the following is defined as a category of quality-related costs?

Product diversity means that products consume overhead activities in systematically similar proportions.

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

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