Exam 12: Activity-Based Management

Hogwarts Company has developed ideal standards for four activities: labor, materials, inspection, and receiving. Information is as follows: The value-added costs for materials are

Your company keeps 15 days of materials inventory on hand to avoid shutdowns due to materials shortages. Carrying costs average $5,000 per day. A competitor keeps 12 days of inventory on hand, and the competitor's carrying costs average $3,000 per day. The value-added costs are

Bandolero Corporation 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 materials are

Lionel, Inc., 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. Required: Complete the following cost report.

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 non-value-added costs for the company are

The responsibility accounting system that focuses on organizational units such as departments and plants is called responsibility.

Each unit of product requires 16 pounds of material. Due to scrap and rework, each unit has been averaging 18 pounds of material. The material costs $4 per pound. The value-added costs are

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

A company has 19 days of finished goods inventory on hand to avoid stockouts. The carrying costs of the inventory average $6,000 per day. The non-value-added costs are

The term(s) which refer(s) to an incentive that specifically relates to sharing the gains from improvements in projects is(are) called

The process of improving performance and constantly eliminating waste is known as __________ .

Describe how activity-based management and activity-based costing systems differ.

A time-and-motion study revealed that it should take 2 hours to produce a product that currently takes 6 hours to produce. Labor is $8 per hour. The value-added costs are

Cheshire Cat Company sells one of its products for $100 each. Sales volume averages 750 units per year. Recently, its main competitor reduced the price of its product to $80. Cheshire Cat Company expects sales to drop dramatically unless it matches the competitor's price. In addition, the current profit per unit must be maintained. Information about the product (for production of 750) is as follows: The non-value-added cost per unit is

What are the two dimensions of an activity-based management model?

Mattress Company sells one of its products for $35 each. Sales volume averages 2,400 units per year. Recently, its main competitor reduced the price of its product to $30. Mattress Company expects sales to drop dramatically unless it matches the competitor's price. In addition, the current profit per unit must be maintained. Information about the product (for production of 2,400) is as follows: The non-value-added cost per unit is

A technique for improving performance of activities and processes that compares the number of times an activity can be performed to the number actually performed is called

Which of the following is descriptive of financial-based responsibility accounting?

Process value analysis maximizes systemwide performance by emphasizing activity management.

Bandolero Corporation 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 inspection are