Exam 5: Cost Management in an Automated Business Environment: Abc, Abm, and Tqm

Most companies allocate facility-level activity costs directly to products for decision-making purposes.

The number of activity cost centers used by a company should:

Actions or units of work undertaken by an organization to accomplish its mission are referred to as:

In the below graph, which shows the relationship among components of quality cost, Line "B" depicts:

Indicate whether each of the following statements is true or false.For a manufacturing company, "quality" means producing products that conform to specifications. ____ Companies incur internal failure costs to avoid producing non-conforming products. ____ Voluntary costs refer to prevention and appraisal costs. ____ Failure costs include appraisal and external failure costs. ____ Managers of a company can often reduce failure costs by reducing appraisal costs. ____

Which of the following is an example of a prevention cost?

Select the term from the list provided that best matches each of the following descriptions.

How would a company determine the optimal number of activity centers in an activity-based costing system?

Which of the following is the most appropriate cost driver for maintaining parts inventory?

Valpar Company produces several lines of laundry hampers. The factory is highly automated and uses an activity-based costing system to allocate overhead costs to its various products. During the upcoming period the company expects to produce 72,000 units. The costs and cost drivers associated with four activity cost pools are given below: Production of 20,000 units of its popular foldable hamper required 3,000 labor hours, 75 setups, and consumed one-third of the product sustaining activities. What amount of unit-level costs will be allocated to the product? ACTIVITIES: UNIT BATCH PRODUCT FACILITY LEVEL LEVEL LEVEL Cost \ 30,000 \ 8,000 \ 15,000 \ 36,000 river 12,000 labor 200 set ups \% of use 72,000

The Farber Company recorded the following costs of quality during the current period: Which choice below represents the correct amount of prevention and appraisal costs? Downtime \ 1,500 Inspection 1,000 Product design 4,000 Reliability testing upon completion of production 2,500 Restocking and packaging 1,500 Training 3,000 Warranty repairs and replacements 2,500 Total Costs of Quality \ 16,000 Prevention Appraisal A) \ 4,000 \ 1,000 B) \ 3,000 \ 1,000 C) \ 7,000 \ 3,500 D) \ 3,000 \ 2,500

Which of the following costs would be most fairly allocated using a volume-based cost driver?

Explain how the competitive global environment has motivated United States companies to increase their use of technology.