Exam 10: Fundamentals of Cost Management

In general,decreasing (or eliminating)the resources committed to nonvalue-added activities will decrease customer response time.The "extra" work is being removed,so the time to complete is shorter.

In general,managerial decisions affecting capacity-level costs and activities also affect volume-level,batch-level,and product-level cost and activities.All levels may be affected by managerial decisions.

Which of the following items would be classified as a batch-level cost in an activity-based cost management (ABM)system?

QC Enterprises quality control report for August contains the following items. What would be the total of the external failure costs on the August quality control report for QC Enterprises?

Crowley Company has gathered the following data related to its production process of two of its products for the week ended April 30: The costs above that appear to be allocated rather than traced are:

QC Enterprises quality control report for August contains the following items. What would be the total of the conformance costs on the August quality control report for QC Enterprises?

BC Enterprises' quality control report for August contains the following items. What would be the total of the internal failure costs on the August quality control report for BC Enterprises?

Which of the following is a prevention activity?

MJK Molding is a specialty molder of plastic jar covers for the cosmetics industry.Because the products sold are expensive cosmetics,the large cosmetic companies who purchase the jar covers are highly sensitive to the appearance of the product.Any cuts,nicks,abrasions,or pieces of dirt embedded will result in rejection of the units.The company spends a significant amount of time in the quality control area.The following list of sub-activities has been developed for quality control: The sub-activities of this company indicate that:

Beta Company is preparing its annual profit plan.As part of its analysis of the profitability of its customers,management estimates that the $12,000 for sales support should be assigned to the individual customers from the information given as follows: What is the amount of the sales support costs that should be allocated to Customer A,assuming Beta uses purchases orders to compute activity-based costs?

Activity analysis is one of the first stages in implementing an activity-based costing system.Which of the following steps in "activity analysis" is usually performed first?

Demers Products reports the following information about resources.At the beginning of the year,Demers estimated it would spend $84,000 for setups and $41,000 for quality testing. Compute unused resource capacity for setups for Demers Products.

Which of the following is an internal failure activity?

Sullivan Inc.reports the following information about resources.At the beginning of the year,Sullivan estimated it would spend $180,000 for materials,$42,000 for purchasing,$35,000 for setups,and $36,000 for repairs. Compute unused resource capacity for materials for Sullivan.

Demers Products reports the following information about resources.At the beginning of the year,Demers estimated it would spend $84,000 for setups and $41,000 for quality testing. Compute unused resource capacity for quality testing for Demers Products.

Ketchem All Detective Agency is evaluating its system.The company gathered the information below: Practical capacity is 75% for each process.Which process is most likely to be a current bottleneck?

BC Enterprises' quality control report for August contains the following items. What would be the total of the external failure costs on the August quality control report for BC Enterprises?

Rogers Company is preparing its annual profit plan.As part of its analysis of the cost of its purchasing activity,management estimates that the $48,000 for purchasing support should be assigned to the individual vendors from the information given as follows: What is the amount of the purchasing costs that should be allocated to Vendor B,assuming Rogers uses purchases orders to compute activity-based costs?

Beta Company is preparing its annual profit plan.As part of its analysis of the profitability of its customers,management estimates that the $12,000 for sales support should be assigned to the individual customers from the information given as follows: What is the amount of the sales support costs that should be allocated to Customer A assuming Beta uses units purchased to compute activity-based costs?

Tangible customer expectations include how the product's salespeople treat customers and the time required to deliver the product to the customer.These are intangible expectations.