Question 1

Activity-based management starts with which of the following?

Accepted Answer

A) activity benefit analysis. 
B) activity cost cutting. 
C) activity-based costing. 
D) activity analysis. 
A) activity benefit analysis. 
B) activity cost cutting. 
C) activity-based costing. 
D) activity analysis.

Question 2

Strategic and operational uses of activity-based management include developing which of the following?

Accepted Answer

A) Strategy. 
B) Long-range plans. 
C) Competitive cost advantage by focusing attention on activities. 
D) All of the answers are correct. 
A) Strategy. 
B) Long-range plans. 
C) Competitive cost advantage by focusing attention on activities. 
D) All of the answers are correct.

Question 3

Explain how the cost hierarchy affects activity-based costing and management.

Accepted Answer

Allocating all costs to units in the tra

Question 4

Activity-based management and costing cannot be applied to marketing in order to

Accepted Answer

A) identify the marketing activities needed to service each customer or order more appropriately. 
B) determine the variability in marketing costs across customer types and distribution. 
C) support activity-based management by encouraging the elimination of accounts with high processing costs. 
D) eliminate plantwide discretionary fixed costs. 
A) identify the marketing activities needed to service each customer or order more appropriately. 
B) determine the variability in marketing costs across customer types and distribution. 
C) support activity-based management by encouraging the elimination of accounts with high processing costs. 
D) eliminate plantwide discretionary fixed costs.

Question 5

The last step in activity-based costing (ABC)is to

Accepted Answer

A) identify the activities that consume resources,and assign costs to those activities. 
B) identify the cost driver(s)associated with each activity. 
C) compute a cost rate per cost driver unit. 
D) assign costs to products by multiplying the cost driver rate by the volume of cost drivers consumed by the product. 
A) identify the activities that consume resources,and assign costs to those activities. 
B) identify the cost driver(s)associated with each activity. 
C) compute a cost rate per cost driver unit. 
D) assign costs to products by multiplying the cost driver rate by the volume of cost drivers consumed by the product.

Question 6

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

Accepted Answer

A) Storage 
B) Moving items 
C) Waiting for work 
D) All of the above are non-value-added costs. 
A) Storage 
B) Moving items 
C) Waiting for work 
D) All of the above are non-value-added costs.

Question 7

Pete's PCs,Inc.budgeted manufacturing overhead costs for the year are:
   
Under a traditional cost system,the company estimated the budgeted capacity for machine hours to be 40,000 hours.Bill is considering changing to an activity-based cost system.Thus,the following estimates were provided:
   
The following information was provided concerning the production of 1,000 units of model #1040:
   
REQUIRED:

Accepted Answer

@#IMG-DLM&_TB2144_00

Question 8

Activity-based costing first assigns costs to

Accepted Answer

A) activities. 
B) products. 
C) departments. 
D) plants 
A) activities. 
B) products. 
C) departments. 
D) plants

Question 9

Bush Enterprises adopts Strategic activity-based costing and management techniques which would most likely result in

Accepted Answer

A) adding surcharges for particular customers 
B) "firing" some customers 
C) seeking to serve more profitable customers 
D) All of the answers are correct. 
A) adding surcharges for particular customers 
B) "firing" some customers 
C) seeking to serve more profitable customers 
D) All of the answers are correct.

Question 10

Activity-based costing.Lena Marks,the manager of Eco Tour Charters,uses activity-based costing to compute the costs of her eco-tour charters for various groups.Each chartered boat holds six paying customers and a guide.The company offers two types of charters to groups that contract by event-half-day trips for birding and to see the pelican islands and full-day jungle cruises through manatee habitats.The breakdown of the costs is as follows:
   
Required:
a.Compute the cost of a corporate event requiring four boats for half-day charters for 28-persons (including four guides).
b.Compute the cost of a corporate event requiring four boats for full-day charters for 28-persons (including four guides).
c.Recommend a minimum price per customer to the manager if she wants to cover her costs.
(Eco Tour Charters;activity-based costing. )

Accepted Answer

a.and b.
 @#IMG-DLM&_TB2144_00 c.If the manager wa

Question 11

Activity-based reporting.The Sampson Corporation manufactures oxygen tanks
for industrial environments.Information regarding resources for the month of March follows.
   
In addition,$23,000 was spent on 700 quality inspections with a cost driver rate of $30,and $8,000 was spent on 200 customer-service cost driver units with a cost driver rate of $35.Sales for March were $335,000.Management has requested the following statements be prepared.
Required:
a.Prepare a traditional income statement.
b.Prepare an activity-based income statement.
c.Write a short report explaining why the activity-based income statement provides better information to managers.

Accepted Answer

(Sampson Corporation;Activity-based repo

Question 12

What is the thirdstep 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 13

Which of the following represents the thirdstep in activity based costing?

Accepted Answer

A) Identify the activities that consume resources and assign costs to those activities. 
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 activities that consume resources and assign costs to those activities. 
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 14

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

Accepted Answer

A) Product specification. 
B) Building depreciation and rent. 
C) Product testing. 
D) Machine setups. 
A) Product specification. 
B) Building depreciation and rent. 
C) Product testing. 
D) Machine setups.

Question 15

Which of the following are resources supplied to an activity in activity-based costing?

Accepted Answer

A) the expenditures for the activity. 
B) actual resource usage. 
C) estimated resource usage. 
D) unused resource capacity. 
A) the expenditures for the activity. 
B) actual resource usage. 
C) estimated resource usage. 
D) unused resource capacity.

Question 16

Studies have shown that after activity-based costing has been implemented,the costs of

Accepted Answer

A) high-volume,standard products have declined significantly. 
B) high-volume,specialty products have increased significantly. 
C) low-volume,standard products have declined significantly. 
D) all products have increased significantly. 
A) high-volume,standard products have declined significantly. 
B) high-volume,specialty products have increased significantly. 
C) low-volume,standard products have declined significantly. 
D) all products have increased significantly.

Question 17

Which of the following is a non-value added cost?

Accepted Answer

A) Running machines. 
B) Performing surgeries. 
C) Waiting for work. 
D) Speaking to customers. 
A) Running machines. 
B) Performing surgeries. 
C) Waiting for work. 
D) Speaking to customers.

Question 18

What provides a systematic way for organizations to evaluate the processes that they use to produce goods and services for their customers?

Accepted Answer

A) Cost-benefit analysis 
B) Activity analysis 
C) Process evaluation and review technique 
D) Flow charting 
A) Cost-benefit analysis 
B) Activity analysis 
C) Process evaluation and review technique 
D) Flow charting

Question 19

What do managers use to analyze the cost-generating and revenue-generating components of a company's activities?

Accepted Answer

A) Low cost solution 
B) Critical path 
C) Value chain 
D) Optimal solution 
A) Low cost solution 
B) Critical path 
C) Value chain 
D) Optimal solution

Question 20

Resources used versus resources supplied.Information about two activities for the Sunrise Corporation follows:
   
Required: Compute unused capacity for energy and marketing.

Accepted Answer

(Sunrise Corporation

Activity-based management starts with which of the following?

Strategic and operational uses of activity-based management include developing which of the following?

Explain how the cost hierarchy affects activity-based costing and management.

Activity-based management and costing cannot be applied to marketing in order to

The last step in activity-based costing (ABC)is to

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

Activity-based costing first assigns costs to

Bush Enterprises adopts Strategic activity-based costing and management techniques which would most likely result in

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

Which of the following represents the thirdstep in activity based costing?

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

Which of the following are resources supplied to an activity in activity-based costing?

Studies have shown that after activity-based costing has been implemented,the costs of

Which of the following is a non-value added cost?

What provides a systematic way for organizations to evaluate the processes that they use to produce goods and services for their customers?

What do managers use to analyze the cost-generating and revenue-generating components of a company's activities?

Resources used versus resources supplied.Information about two activities for the Sunrise Corporation follows: Required: Compute unused capacity for energy and marketing.

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

Activity-based management starts with which of the following?

Strategic and operational uses of activity-based management include developing which of the following?

Explain how the cost hierarchy affects activity-based costing and management.

Activity-based management and costing cannot be applied to marketing in order to

The last step in activity-based costing (ABC)is to

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

Activity-based costing first assigns costs to

Bush Enterprises adopts Strategic activity-based costing and management techniques which would most likely result in

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

Which of the following represents the thirdstep in activity based costing?

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

Which of the following are resources supplied to an activity in activity-based costing?

Studies have shown that after activity-based costing has been implemented,the costs of

Which of the following is a non-value added cost?

What provides a systematic way for organizations to evaluate the processes that they use to produce goods and services for their customers?

What do managers use to analyze the cost-generating and revenue-generating components of a company's activities?

Resources used versus resources supplied.Information about two activities for the Sunrise Corporation follows: Required: Compute unused capacity for energy and marketing.

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