Question 1

An activity that is performed for each individual unit is a ________ level activity.

Accepted Answer

A)  batch
B)  facility
C)  product
D)  unitE) A) and D)
F) C) and D)

Question 2

Parsons and Sons Woodworks manufactures baseball bats and wooden tops.Currently,Parsons and Sons makes 5,000 baseball bats each month.Each bat uses $1.00 in direct materials and $0.50 in direct labor.Parsons and Sons uses two activities in manufacturing the baseball bats: Cutting and Finishing.The cost associated with Cutting is $7,500 a month,allocated on the basis of direct labor hours.The cost associated with Finishing is $12,000 a month,allocated on the basis of batches.Baseball bats use 1/3 of the direct labor hours,and 40% of total batches.What is the total manufacturing cost for one baseball bat?

Accepted Answer

A)  $1.46
B)  $1.50
C)  $2.96
D)  $3.94E) B) and C)
F) None of the above

Question 3

The approach to cost management that calls for setting cost reduction goals across numerous stages such as product introduction,growth,maturity,and decline is:

Accepted Answer

A)  life cycle cost management.
B)  total quality management.
C)  target costing.
D)  just-in-time inventory.E) C) and D)
F) B) and D)

Question 4

Portland,Inc.has formed four activity cost pools: Product Design,Machining and Production,Machine Setup,and Inspection.Gina Taylor,Production Manager at Portland,oversees processes that are considered part of Machining and Production,Machine Setup,and Inspection.Taylor's salary should be:

Accepted Answer

A)  assigned to the activity she spends the most time on.
B)  considered as a separate activity.
C)  expensed in the period incurred.
D)  allocated among Machining and Production,Machine Setup,and Inspection.E) C) and D)
F) A) and C)

Question 5

Jackson,Inc.produces two different products (Product 5 and Product Z) using two different activities: Machining,which uses machine hours as an activity driver,and Inspection,which uses number of batches as an activity driver.The cost of Machining is $500,000,while the cost of Inspection is $30,000.Product 5 uses 20% of total machine hours and 75% of total batches.What is the total Machining cost assigned to Product 5?

Accepted Answer

A)  $7,500
B)  $22,500
C)  $100,000
D)  $375,000E) C) and D)
F) A) and B)

Question 6

External failure costs are costs that:

Accepted Answer

A)  are incurred to prevent quality problems from occurring in the first place.
B)  are incurred to identify defective products before products are shipped to the customer.
C)  result from defects that are caught before the product is shipped to the customer.
D)  occur when a defective product makes its way into the hands of the customer.E) All of the above
F) A) and B)

Question 7

An activity that is performed for a group of units all at once is a(n) :

Accepted Answer

A)  batch-level activity.
B)  product-level activity.
C)  facility-level activity.
D)  unit-level activity.E) All of the above
F) C) and D)

Question 8

One side benefit of JIT is that:

Accepted Answer

A)  the accounting system is more complicated.
B)  the company maintains more connections with suppliers since it uses more of them.
C)  the accounting system is simplified.
D)  it enables accountants to be measurement experts.E) A) and B)
F) None of the above

Question 9

Jackson,Inc.produces two different products (Product 5 and Product Z) using two different activities: Machining,which uses machine hours as an activity driver,and Inspection,which uses number of batches as an activity driver.The cost of Machining is $500,000,while the cost of Inspection is $30,000.Product 5 uses 20% of total machine hours and 75% of total batches.What is the total Inspection cost assigned to Product 5?

Accepted Answer

A)  $7,500
B)  $22,500
C)  $125,000
D)  $375,000E) C) and D)
F) A) and B)

Question 10

Internal failure costs are costs that:

Accepted Answer

A)  are incurred to prevent quality problems from occurring in the first place.
B)  are incurred to identify defective products before products are shipped to the customer.
C)  result from defects that are caught before the product is shipped to the customer.
D)  occur when a defective product makes its way into the hands of the customer.E) A) and C)
F) None of the above

Question 11

Washington,Inc.produces two different products (Product C and Product 2) using two different activities: Machining,which uses machine hours as an activity driver,and Inspection,which uses number of batches as an activity driver.The cost of Machining is $750,000,while the cost of Inspection is $90,000.The activity drivers are used as follows:  What is the activity rate for Inspection?

Accepted Answer

A)  $45,000 per batch
B)  $1,500 per batch
C)  $6,000 per batch
D)  $2,000 per batchE) C) and D)
F) None of the above

Question 12

When a traditional,volume-based costing system is used,which of the following products is most likely to suffer from cost distortion?

Accepted Answer

A)  A high-volume,medium-complexity product
B)  A low-volume,low-complexity product
C)  A low-volume,medium-complexity product
D)  A low-volume,high-complexity productE) B) and C)
F) A) and D)

Exam 4: Activity-Based Costing and Cost Management

An activity that is performed for each individual unit is a ________ level activity.

Correct Answer
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Portland,Inc.has formed four activity cost pools: Product Design,Machining and Production,Machine Setup,and Inspection.Gina Taylor,Production Manager at Portland,oversees processes that are considered part of Machining and Production,Machine Setup,and Inspection.Taylor's salary should be:

Correct Answer
verified

The approach to cost management that calls for setting cost reduction goals across numerous stages such as product introduction,growth,maturity,and decline is:

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

An activity that is performed for a group of units all at once is a(n) :

Correct Answer
verified

External failure costs are costs that:

Correct Answer
verified

When a traditional,volume-based costing system is used,which of the following products is most likely to suffer from cost distortion?

Correct Answer
verified

Correct Answer
verified

Internal failure costs are costs that:

Correct Answer
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Correct Answer
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One side benefit of JIT is that:

Correct Answer
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Exam 4: Activity-Based Costing and Cost Management

An activity that is performed for each individual unit is a ________ level activity.

Correct AnswerverifiedShow Answer

Portland,Inc.has formed four activity cost pools: Product Design,Machining and Production,Machine Setup,and Inspection.Gina Taylor,Production Manager at Portland,oversees processes that are considered part of Machining and Production,Machine Setup,and Inspection.Taylor's salary should be:

Correct AnswerverifiedShow Answer

The approach to cost management that calls for setting cost reduction goals across numerous stages such as product introduction,growth,maturity,and decline is:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

An activity that is performed for a group of units all at once is a(n) :

Correct AnswerverifiedShow Answer

External failure costs are costs that:

Correct AnswerverifiedShow Answer

When a traditional,volume-based costing system is used,which of the following products is most likely to suffer from cost distortion?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Internal failure costs are costs that:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

One side benefit of JIT is that:

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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