Question 1

How are overhead costs accumulated in an activity-based costing system?

Accepted Answer

A) in a single,plant-wide pool. 
B) by departments. 
C) in pools established by identified cost drivers. 
D) in facility-level activities. 
A) in a single,plant-wide pool. 
B) by departments. 
C) in pools established by identified cost drivers. 
D) in facility-level activities.

Question 2

Activity-based management involves looking for ways to reduce

Accepted Answer

A) unused capacity. 
B) value-added capacity. 
C) income taxes. 
D) employee morale. 
A) unused capacity. 
B) value-added capacity. 
C) income taxes. 
D) employee morale.

Question 3

Gem Systems
Gem Systems uses an activity-based costing system.The company has gathered the following information concerning various cost pools and activity drivers;
 
The following data was collected and is specific to Job 150.
 
Refer to Gem Systems.Calculate the unit cost for the Material Handling activity cost pool.

Accepted Answer

A) $5.00 
B) $25.00 
C) $10.00 
D) $ 3.50 
A) $5.00 
B) $25.00 
C) $10.00 
D) $ 3.50

Question 4

Identify the steps in activity based costing.

Accepted Answer

Activity-based costing requires accounta

Question 5

What is the secondstep in the activity analysis process used to implement Activity Based Management?

Accepted Answer

A) Chart,from start to finish,the activities used to complete the product or service. 
B) Classify activities as value-added or non-value-added. 
C) Eliminate non-value-added activities. 
D) Continuously improve and reevaluate the efficiency of value-added activities or replace them with more efficient activities. 
A) Chart,from start to finish,the activities used to complete the product or service. 
B) Classify activities as value-added or non-value-added. 
C) Eliminate non-value-added activities. 
D) Continuously improve and reevaluate the efficiency of value-added activities or replace them with more efficient activities.

Question 6

The value chain ends with which of the following?

Accepted Answer

A) production. 
B) marketing. 
C) distribution. 
D) customer service. 
A) production. 
B) marketing. 
C) distribution. 
D) customer service.

Question 7

How can the cost hierarchy be used to organize cost information for decision-making?

Accepted Answer

Allocating all costs to units is mislead

Question 8

The Caesar Company manufactures picnic tables.The company's Southeastern plant has changed from a labor-intensive operation to a robotics environment.As a result,management is considering changing from a direct-labor based overhead rate to an activity-based cost method.The controller has chosen the following activity cost pools and cost drivers for the factory overhead:
   
REQUIRED:

Accepted Answer

@#IMG-DLM&_TB2144_00

Question 9

Which of the following would be considered the single,biggest obstacle to implementing activity-based management in an organization?

Accepted Answer

A) Lower-level employee resistance. 
B) Middle-level employee resistance. 
C) Top-level employee resistance. 
D) Customer resistance. 
A) Lower-level employee resistance. 
B) Middle-level employee resistance. 
C) Top-level employee resistance. 
D) Customer resistance.

Question 10

One of the lessons of activity-based costing (ABC)is that costs depend on

Accepted Answer

A) volume of the product,only. 
B) complexity of the product,only. 
C) volume and complexity of the product. 
D) factors other than the volume or complexity of the product. 
A) volume of the product,only. 
B) complexity of the product,only. 
C) volume and complexity of the product. 
D) factors other than the volume or complexity of the product.

Question 11

The major cost pool(s)for traditional methods is/are

Accepted Answer

A) the "plant." 
B) the employees. 
C) the activity center. 
D) the management team. 
A) the "plant." 
B) the employees. 
C) the activity center. 
D) the management team.

Question 12

When does activity-based costing have the best results?

Accepted Answer

A) When it is used as a quick,one-time fix. 
B) When the company has a short-term time horizon. 
C) When it is used as a process that requires patience and participation. 
D) When it is used as a means to motivate employees to work better. 
A) When it is used as a quick,one-time fix. 
B) When the company has a short-term time horizon. 
C) When it is used as a process that requires patience and participation. 
D) When it is used as a means to motivate employees to work better.

Question 13

Which of the following is an example of customer activities in the product cost hierarchy?

Accepted Answer

A) Plant management,building depreciation,rent,heating and lighting,market research,and customer records. 
B) Market research,customer records,and promotion. 
C) Machine setups and quality inspections. 
D) Energy to run machines and direct materials. 
A) Plant management,building depreciation,rent,heating and lighting,market research,and customer records. 
B) Market research,customer records,and promotion. 
C) Machine setups and quality inspections. 
D) Energy to run machines and direct materials.

Question 14

Which of the following is not a step in activity based costing?

Accepted Answer

A) Identify the departments that consume resources and assign costs to those departments. 
B) Identify the cost drivers associated with each activity. 
C) Compute a cost rate per cost driver unit. 
D) Assign cost to products by multiplying the cost driver rate times the volume of cost driver consumed by the product. 
A) Identify the departments that consume resources and assign costs to those departments. 
B) Identify the cost drivers associated with each activity. 
C) Compute a cost rate per cost driver unit. 
D) Assign cost to products by multiplying the cost driver rate times the volume of cost driver consumed by the product.

Question 15

Which of the following are examples of batch activities in the product cost hierarchy?

Accepted Answer

A) Product specifications and product testing. 
B) Market research,customer records,and promotion. 
C) Machine setups and quality inspections. 
D) Energy to run machines and direct materials. 
A) Product specifications and product testing. 
B) Market research,customer records,and promotion. 
C) Machine setups and quality inspections. 
D) Energy to run machines and direct materials.

Question 16

Which formula correctly identifies the predetermined indirect cost rate in an activity-based costing system?

Accepted Answer

A) Actual indirect cost divided by the actual volume of the allocation base. 
B) Estimated indirect cost divided by the actual volume of the allocation base. 
C) Actual cost divided by the estimated volume of the allocation base. 
D) Estimated indirect cost divided by the estimated volume of the allocation base. 
A) Actual indirect cost divided by the actual volume of the allocation base. 
B) Estimated indirect cost divided by the actual volume of the allocation base. 
C) Actual cost divided by the estimated volume of the allocation base. 
D) Estimated indirect cost divided by the estimated volume of the allocation base.

Question 17

Which of the following costs are capacity-sustaining activities in the product cost hierarchy?

Accepted Answer

A) Product testing. 
B) Energy to run machines. 
C) Heat and lighting. 
D) Direct Materials. 
A) Product testing. 
B) Energy to run machines. 
C) Heat and lighting. 
D) Direct Materials.

Question 18

Marshall Manufacturing Co.
Marshall Manufacturing Co.uses an activity-based costing system.The company has gathered the following information concerning various cost pools and activity drivers;
 
The following data was collected and is specific to Item No.824.
 
Refer to Marshall Manufacturing Co.What is the cost of one unit of item 824?

Accepted Answer

A) $ 3.75 
B) $116.25 
C) $ 23.75 
D) None of the above 
A) $ 3.75 
B) $116.25 
C) $ 23.75 
D) None of the above

Question 19

Describe the four steps accountants follow in activity-based costing.

Accepted Answer

Accountants must identify the activities

Question 20

Which of the following are not examples of non-value-added costs?

Accepted Answer

A) Storage 
B) Moving items 
C) Waiting for work 
D) Production 
A) Storage 
B) Moving items 
C) Waiting for work 
D) Production

How are overhead costs accumulated in an activity-based costing system?

Activity-based management involves looking for ways to reduce

Identify the steps in activity based costing.

What is the secondstep in the activity analysis process used to implement Activity Based Management?

The value chain ends with which of the following?

How can the cost hierarchy be used to organize cost information for decision-making?

Which of the following would be considered the single,biggest obstacle to implementing activity-based management in an organization?

One of the lessons of activity-based costing (ABC)is that costs depend on

The major cost pool(s)for traditional methods is/are

When does activity-based costing have the best results?

Which of the following is an example of customer activities in the product cost hierarchy?

Which of the following is not a step in activity based costing?

Which of the following are examples of batch activities in the product cost hierarchy?

Which formula correctly identifies the predetermined indirect cost rate in an activity-based costing system?

Which of the following costs are capacity-sustaining activities in the product cost hierarchy?

Describe the four steps accountants follow in activity-based costing.

Which of the following are not examples of non-value-added costs?

Fundamental Concepts

Measuring Product Costs

Strategic Management of Costs,quality,and Time

Cost Drivers and Cost Behavior

Financial Modeling for Short-Term Decision Making

Differential Cost Analysis for Operating Decisions

Capital Expenditure Decisions

Profit Planning and Budgeting

Profit and Cost Center Performance Evaluation

Investment Center Performance Evaluation

Incentive Issues

Allocating Costs to Responsibility Centers

Filters

Exam 3: Activity-Based Management

How are overhead costs accumulated in an activity-based costing system?

Activity-based management involves looking for ways to reduce

Identify the steps in activity based costing.

What is the secondstep in the activity analysis process used to implement Activity Based Management?

The value chain ends with which of the following?

How can the cost hierarchy be used to organize cost information for decision-making?

Which of the following would be considered the single,biggest obstacle to implementing activity-based management in an organization?

One of the lessons of activity-based costing (ABC)is that costs depend on

The major cost pool(s)for traditional methods is/are

When does activity-based costing have the best results?

Which of the following is an example of customer activities in the product cost hierarchy?

Which of the following is not a step in activity based costing?

Which of the following are examples of batch activities in the product cost hierarchy?

Which formula correctly identifies the predetermined indirect cost rate in an activity-based costing system?

Which of the following costs are capacity-sustaining activities in the product cost hierarchy?

Describe the four steps accountants follow in activity-based costing.

Which of the following are not examples of non-value-added costs?

Fundamental Concepts

Measuring Product Costs

Strategic Management of Costs,quality,and Time

Cost Drivers and Cost Behavior

Financial Modeling for Short-Term Decision Making

Differential Cost Analysis for Operating Decisions

Capital Expenditure Decisions

Profit Planning and Budgeting

Profit and Cost Center Performance Evaluation

Investment Center Performance Evaluation

Incentive Issues

Allocating Costs to Responsibility Centers

Filters