Exam 12: Activity-Based Management

Mattison Company has developed cost formulas for the drivers of the following production activities: The activity levels are projected to be as follows: What is budgeted for this projected activity level?

The common steps in implementing activity-based management are systems planning and activity identification, definition, and classification.

A time-and-motion study revealed that it should take 3 hours to produce a product that currently takes 7 hours to produce. Labor is $9 per hour. The non-value-added costs are

The responsibility accounting system that uses both operational and financial measures is called responsibility.

The process which refers to the adoption of new processes to meet strategic objectives is called:

The continuous improvement subcycle of Kaizen costing is defined by what sequence?

The capacity variance is composed of the unused capacity variance and

Processes are

Activity flexible budgeting differs from traditional approaches by using more than drivers to predict costs.

Hogwarts Company has developed ideal standards for four activities: labor, materials, inspection, and receiving. Information is as follows: The actual prices paid per unit of each activity driver were equal to the standard prices. The non-value-added costs For labor are

Setup time for a product is 14 hours. A firm that uses JIT and produces the same product has reduced setup time by 2 hours. Setup labor is $35 per hour. If the company wants to reduce non-value-added costs by 40 percent next year, the currently attainable standard for setup time would be

Livingston Company has developed capacity standards. Information is as follows: Standard cost of the activity capacity acquired $250,000 Standard cost of the activity capacity used 200,000 Standard cost of the actual activity used 220,000 The volume variance is

The term(s )which refer(s) to a global incentive that encourages employees to contribute to the overall financial well-being is(are) called

Mendelsohn company keeps 20 days of materials inventory on hand to avoid shutdowns due to materials shortages. Carrying costs average $4,000 per day. Bach, Inc., a competitor, keeps 10 days of inventory on hand, and the competitor's carrying costs average $2,000 per day. The value-added costs are

Which of the following process dimensions of the activity-based management model deals with "why"?

The Opportunist Company recorded the following activities. Determine the amount of value-added and non-value- added costs. a. Opportunist keeps 7 days of materials inventory on hand to avoid shutdowns due to materials shortages. Carrying costs are $50,000 per day. b. A time-and-motion study revealed that it should take 10 minutes to produce a product that now takes 50 minutes to produce. Labor is $18 per hour. c. Warranty work costs the firm $500,000 per year. Warranty costs for the industry average $100,000 per year.

The maintenance subcycle is defined by what sequence?

The effort to reduce costs of existing products and processes is named:

The responsibility accounting system developed for operations in a continuous improvement environment would be

Which of the following is NOT an essential element of responsibility accounting?