Question 1

Which of the following is a reason for managerial activity to be considered a value-added activity?

Accepted Answer

A)  It is an enabling resource for operational activities that bring about a change of state. 
B)  Managing activities brings order by changing the state from uncoordinated activities to coordinated activities. 
C)  Both are reasons for classifying managerial activities as value-added activity. 
D)  Neither is a reason for classifying managerial activities as value-added activity. 
A)  It is an enabling resource for operational activities that bring about a change of state. 
B)  Managing activities brings order by changing the state from uncoordinated activities to coordinated activities. 
C)  Both are reasons for classifying managerial activities as value-added activity. 
D)  Neither is a reason for classifying managerial activities as value-added activity.

Question 2

What is the purpose of driver analysis?

Accepted Answer

A)  identify activities in a process 
B)  identify number of processes 
C)  identify root causes of activity costs 
D)  identify complexity of processes 
A)  identify activities in a process 
B)  identify number of processes 
C)  identify root causes of activity costs 
D)  identify complexity of processes

Question 3

_______________ decreases the time and resources required by different activities.

Accepted Answer

A)  Activity sharing 
B)  Activity elimination 
C)  Activity selection 
D)  Activity reduction 
A)  Activity sharing 
B)  Activity elimination 
C)  Activity selection 
D)  Activity reduction

Question 4

The purpose of trend reporting on non-value-added costs is to

Accepted Answer

A)  trace resources to cost objectives. 
B)  assess value content. 
C)  define root causes. 
D)  see if cost reductions occurred as expected. 
A)  trace resources to cost objectives. 
B)  assess value content. 
C)  define root causes. 
D)  see if cost reductions occurred as expected.

Question 5

The unused capacity variance is

Accepted Answer

A)  the difference in costs between activity availability and activity usage. 
B)  the difference in costs between actual activity level acquired and the value-added standard quantity of activity that should have been used. 
C)  the difference in costs between practical capacity of activity and the standard capacity of the activity. 
D)  none of these. 
A)  the difference in costs between activity availability and activity usage. 
B)  the difference in costs between actual activity level acquired and the value-added standard quantity of activity that should have been used. 
C)  the difference in costs between practical capacity of activity and the standard capacity of the activity. 
D)  none of these.

Question 6

Park, 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.Park 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

@#IMG-DLM&_TB2043_00

Question 7

Sasha Cat Company sells one of its products for $100 each.Sales volume averages 750 units per year.Recently, its main competitor reduced the price of its product to $80.Sasha Cat Company 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 750) is as follows:   The non-value-added cost per unit is

Accepted Answer

A)  $41.67. 
B)  $43.33. 
C)  $40.47. 
D)  $38.33. 
A)  $41.67. 
B)  $43.33. 
C)  $40.47. 
D)  $38.33.

Question 8

Setup time for a product is 12 hours.A firm that uses JIT and produces the same product has reduced setup time to 1 hour.Setup labor is $6 per hour.
-The value-added costs are

Accepted Answer

A)  $72. 
B)  $66. 
C)  $12. 
D)  $6. 
A)  $72. 
B)  $66. 
C)  $12. 
D)  $6.

Question 9

Larry Corporation has developed ideal standards for four activities: labor, materials, inspection, and receiving.Information is as follows:   The actual prices paid per unit of each activity driver were equal to the standard prices.
-The value-added costs for labor are

Accepted Answer

A)  $900,000. 
B)  $792,000. 
C)  $84,000. 
D)  $75,000. 
A)  $900,000. 
B)  $792,000. 
C)  $84,000. 
D)  $75,000.

Question 10

Activity-based management attempts to

Accepted Answer

A)  identify and eliminate all unnecessary activities. 
B)  increase the efficiency of necessary activities. 
C)  add new activities that increase value. 
D)  all of these. 
A)  identify and eliminate all unnecessary activities. 
B)  increase the efficiency of necessary activities. 
C)  add new activities that increase value. 
D)  all of these.

Question 11

_______________ increases the efficiency of necessary activities by using economies of scale.

Accepted Answer

A)  Activity sharing 
B)  Activity elimination 
C)  Activity selection 
D)  Activity reduction 
A)  Activity sharing 
B)  Activity elimination 
C)  Activity selection 
D)  Activity reduction

Question 12

_______________ refers to incremental or continual increases in the efficiency of an existing product.

Accepted Answer

A)  Process improvement 
B)  Process innovation 
C)  Process creation 
D)  Process elimination 
A)  Process improvement 
B)  Process innovation 
C)  Process creation 
D)  Process elimination

Question 13

_______________ is an effort to reduce costs of existing products and processes.

Accepted Answer

A)  Kaizen costing 
B)  Activity elimination 
C)  Activity selection 
D)  Activity reduction 
A)  Kaizen costing 
B)  Activity elimination 
C)  Activity selection 
D)  Activity reduction

Question 14

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 15

Froelech Company has developed capacity standards.Information is as follows:   The volume variance is

Accepted Answer

A)  $20,000 unfavorable. 
B)  $30,000 unfavorable. 
C)  $50,000 unfavorable. 
D)  there is no variance. 
A)  $20,000 unfavorable. 
B)  $30,000 unfavorable. 
C)  $50,000 unfavorable. 
D)  there is no variance.

Question 16

Describe how activity-based management and activity-based costing systems differ.

Accepted Answer

Activity-based management is a systemwid

Question 17

Froelech Company has developed capacity standards.Information about a non-value-added activity is as follows:   The volume variance is

Accepted Answer

A)  $10,000 unfavorable. 
B)  $10,000 favorable. 
C)  $50,000 unfavorable. 
D)  $50,000 favorable. 
A)  $10,000 unfavorable. 
B)  $10,000 favorable. 
C)  $50,000 unfavorable. 
D)  $50,000 favorable.

Question 18

Activity-based management can be viewed as an information system with broad objectives.Which of the following is NOT on of the broad objectives of ABM?

Accepted Answer

A)  Support continuous improvement through cost reduction. 
B)  Increase the non-value-added costs through increased collection of more accurate cost accounting information. 
C)  Improve decision making through more accurate cost data. 
D)  All of these are broad objectives of ABM. 
A)  Support continuous improvement through cost reduction. 
B)  Increase the non-value-added costs through increased collection of more accurate cost accounting information. 
C)  Improve decision making through more accurate cost data. 
D)  All of these are broad objectives of ABM.

Question 19

Larry Corporation has developed ideal standards for four activities: labor, materials, inspection, and receiving.Information is as follows:   The actual prices paid per unit of each activity driver were equal to the standard prices.
-The non-value-added costs for inspection are

Accepted Answer

A)  $420,000. 
B)  $60,000. 
C)  $480,000. 
D)  $40,000. 
A)  $420,000. 
B)  $60,000. 
C)  $480,000. 
D)  $40,000.

Question 20

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.

Which of the following is a reason for managerial activity to be considered a value-added activity?

What is the purpose of driver analysis?

_______________ decreases the time and resources required by different activities.

The purpose of trend reporting on non-value-added costs is to

The unused capacity variance is

Setup time for a product is 12 hours.A firm that uses JIT and produces the same product has reduced setup time to 1 hour.Setup labor is $6 per hour. -The value-added costs are

Larry Corporation has developed ideal standards for four activities: labor, materials, inspection, and receiving.Information is as follows: The actual prices paid per unit of each activity driver were equal to the standard prices. -The value-added costs for labor are

Activity-based management attempts to

_______________ increases the efficiency of necessary activities by using economies of scale.

_______________ refers to incremental or continual increases in the efficiency of an existing product.

_______________ is an effort to reduce costs of existing products and processes.

Non-value-added activities

Froelech Company has developed capacity standards.Information is as follows: The volume variance is

Describe how activity-based management and activity-based costing systems differ.

Froelech Company has developed capacity standards.Information about a non-value-added activity is as follows: The volume variance is

Activity-based management can be viewed as an information system with broad objectives.Which of the following is NOT on of the broad objectives of ABM?

Larry Corporation has developed ideal standards for four activities: labor, materials, inspection, and receiving.Information is as follows: The actual prices paid per unit of each activity driver were equal to the standard prices. -The non-value-added costs for inspection are

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

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

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

Which of the following is a reason for managerial activity to be considered a value-added activity?

What is the purpose of driver analysis?

_______________ decreases the time and resources required by different activities.

The purpose of trend reporting on non-value-added costs is to

The unused capacity variance is

Setup time for a product is 12 hours.A firm that uses JIT and produces the same product has reduced setup time to 1 hour.Setup labor is $6 per hour. -The value-added costs are

Larry Corporation has developed ideal standards for four activities: labor, materials, inspection, and receiving.Information is as follows: The actual prices paid per unit of each activity driver were equal to the standard prices. -The value-added costs for labor are

Activity-based management attempts to

_______________ increases the efficiency of necessary activities by using economies of scale.

_______________ refers to incremental or continual increases in the efficiency of an existing product.

_______________ is an effort to reduce costs of existing products and processes.

Non-value-added activities

Froelech Company has developed capacity standards.Information is as follows: The volume variance is

Describe how activity-based management and activity-based costing systems differ.

Froelech Company has developed capacity standards.Information about a non-value-added activity is as follows: The volume variance is

Activity-based management can be viewed as an information system with broad objectives.Which of the following is NOT on of the broad objectives of ABM?

Larry Corporation has developed ideal standards for four activities: labor, materials, inspection, and receiving.Information is as follows: The actual prices paid per unit of each activity driver were equal to the standard prices. -The non-value-added costs for inspection are

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

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

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