Exam 10: Fundamentals of Cost Management

The cost driver rate is computed by dividing the total cost per activity by the estimated number of units produced.Divided by the estimated cost driver level.

The degree to which a good or service meets specifications is called:

The amount of resources used in an activity-based costing (ABC)system for a specific activity is computed by multiplying the:

Which of the following is not an example of a prevention cost?

Which of the following is an example of an internal failure cost?

Which of the following statement is(are)true? (A)Unused capacity costs incurred for the benefit of a company's customers (e.g. ,meet seasonal demands)should be assigned to the customers that require (use)the excess capacity.(B)In general,managerial decisions affecting capacity-level costs and activities also affect volume-level,batch-level,and product-level cost and activities.

Which of the following items is included in almost all quality control systems?

Yellow Industries decides to price delivery service according to the results of a recent activity-based costing (ABC)study.The study indicates Yellow should charge $8 per order,2% of the order's value for general delivery costs,$1.25 per item,and $30 for delivery.A year later,Yellow collected the following information for two of its best customers: What are the total delivery costs charged to Customer C during the year?

Folly Beach Industries decides to price delivery service according to the results of a recent activity-based costing (ABC)study.The study indicates Folly Beach should charge $16 per order,1% of the order's value for general delivery costs,$2.50 per item,and $45 for delivery.A year later,Folly Beach collected the following information for three of its customers: What are the total delivery costs charged to Customer A during the year?

Which of the following items would not be used as the cost driver for a volume-level cost in an activity-based cost management (ABM)system?

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 A,assuming Rogers uses number of shipments received to compute activity-based costs?

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

Which of the following statements regarding quality costs is(are)false? (A)In a cost of quality system,internal and external failure costs are called conformance costs.(B)Prevention costs are costs incurred to detect individual units of product that do not conform to its specifications.

Internal failure costs include materials wasted in the production process and correcting products before they are sold.Internal failures occur before the products leave the firm;external failures occur after the product leaves.

Folly Beach Industries decides to price delivery service according to the results of a recent activity-based costing (ABC)study.The study indicates Folly Beach should charge $16 per order,1% of the order's value for general delivery costs,$2.50 per item,and $45 for delivery.A year later,Folly Beach collected the following information for three of its customers: What are the total delivery costs charged to Customer C during the year?

Internal failure activities:

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 A,assuming Rogers uses purchases orders to compute activity-based costs?

BC 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 BC Enterprises?

QC 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 QC Enterprises?

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 repairs for Sullivan.