Question 1

In an activity-based costing system,the benefits of defining more detailed activities will always outweigh the effort needed to monitor activity performance,and the resulting potential for error.

Accepted Answer

A) True 
 B)False

Question 2

Assigning manufacturing overhead cost to activity pools is referred to as first-stage allocation because

Accepted Answer

A)  costs are assigned first to the activity pools before being assigned to cost objects.
B)  costs are assigned first to the activity pools before being assigned to cost drivers.
C)  costs are assigned first to the activity pools before being assigned to activity drivers.
D)  costs are assigned first to the activity pools before being assigned to activity objects.E) All of the above
F) B) and C)

Question 3

The first step in implementing an activity-based costing system begins with

Accepted Answer

A)  developing activity cost pools.
B)  identifying activities.
C)  calculating activity cost pool rates.
D)  calculate theE) B) and D)
F) B) and C)

Question 4

Brandon Consulting Company is headquartered in Atlanta and has branch offices in Nashville and Birmingham.Brandon uses an activity-based costing system.The Atlanta office has its costs for Administration and Legal allocated to the two branch offices.Brandon has provided the following information:   How much of Atlanta's cost will be allocated to Birmingham?

Accepted Answer

A)  $174,500
B)  $167,600
C)  $209,500
D)  $175,400E) All of the above
F) A) and D)

Question 5

Place an "X" in the column that corresponds to the type of activity level referred to in each scenario.

Accepted Answer

The answer of Place an "X" in the column that...

Question 6

One way to implement activity-based management is to take a fresh look at the activities performed in an organization to see if a business process can be changed so as to reduce costs.As part of a team responsible for implementing an activity-based costing system,you are to investigate business processes for your company and specifically investigate processes in products that are not profitable.You have been introduced to the terms Process Improvement and Business Process Reengineering.
Required:
Define activity-based management and list four ways managers use activity-based costing information and define process improvement and business process engineering.

Accepted Answer

The process of using activity-based cost...

Question 7

Activities that are performed all at once on groups of products is classified as an

Accepted Answer

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

Question 8

Which of the following is not a product- or service-related activity?

Accepted Answer

A)  Unit-level
B)  Product-level
C)  Batch-level
D)  Customer-levelE) None of the above
F) B) and C)

Question 9

Identifying activities performed in the organization is the first step in developing activity-based product costs.Which of the following is a way to identify these activities?

Accepted Answer

A)  Asking employees what they do
B)  Analyzing industry averages
C)  Both asking employees what they do and analyzing industry averages
D)  Neither asking employees what they do nor analyzing industry averagesE) A) and B)
F) B) and C)

Question 10

The following list includes activities that are performed in a CPA firm..Classify each activity as value-added or non-value added.

Accepted Answer

The answer of The following list includes activities that are...

Question 11

Which of the following would be considered a batch-level activity?

Accepted Answer

A)  Engineering changes made on the assembly line
B)  Quality tests
C)  Warehouse costs
D)  Preparing the annual budgetE) A) and B)
F) A) and C)

Question 12

Turnbull Company produces two products and their overhead consists of setups $20,000; machining $2,220,000; and packing $80,000.Data for the current year follow: Beta Delta
Number of setups 20 20
Machine hours 1,000 4,000
Packing orders 150 350
Number of

Accepted Answer

A)  $1,856,000 and $1,878,000
B)  $1,864,000 and $2,056,000
C)  $1,856,000 and $1,842,000
D)  $1,864,000 and $1,878,000E) None of the above
F) A) and D)

Question 13

Gooding Company manufactures two models of its skillet,the Kitchen and the Campfire.The Kitchen model requires 10,000 direct labor hours and the Campfire requires 30,000 direct labor hours.The company produces 3,400

Accepted Answer

A)  $21,150
B)  $30,600
C)  $42,300
D)  $71,910E) A) and B)
F) C) and D)

Question 14

When using an activity-based costing system,which of the following is the formula for allocating costs to products or services?

Accepted Answer

A)  Activity rate x activity driver consumption
B)  Activity rate x amount in activity pool
C)  Predetermined manufacturing overhead rate x actual activity
D)  Predetermined manufacturing overhead rate x planned activityE) A) and D)
F) C) and D)

Question 15

Which of the following is a product- or service-related activity?

Accepted Answer

A)  Batch-level
B)  Customer-level
C)  Organization-level
D)  Group-levelE) C) and D)
F) A) and D)

Question 16

Mantle Co.manufactures baseball bats.The company's total overhead consists of assembly costs and inspection costs.The following data is available: Cost Pool Wood Aluminum Total Cost
Assembly 500 machine hrs.500 machine hrs.$ 45,000
Inspections 350 inspections 150 inspections 75,000
2,100 labor hrs.1,900 labor hrs.
Total overhead assigned to wood bats assuming a single overhead rate and using activity based costing,respectively,are:

Accepted Answer

A)  $63,000 and $75,000
B)  $63,000 and $57,000
C)  $57,000 and $45,000
D)  $57,000 and $75,000E) A) and B)
F) A) and C)

Question 17

Product-level activities are also referred to as

Accepted Answer

A)  product-sustaining activities.
B)  product resource activities.
C)  batch-level activities.
D)  group-level activities.E) A) and D)
F) C) and D)

Question 18

The examination of business processes to identify incremental changes that may reduce operating costs is referred to as

Accepted Answer

A)  variance analysis.
B)  incremental analysis.
C)  process improvement.
D)  total quality management.E) A) and D)
F) A) and C)

Exam 7: Activity-Based Costing and Activity Based Management

Activities that are performed all at once on groups of products is classified as an

Correct Answer
verified

In an activity-based costing system,the benefits of defining more detailed activities will always outweigh the effort needed to monitor activity performance,and the resulting potential for error.

Correct Answer
verified

Product-level activities are also referred to as

Correct Answer
verified

Identifying activities performed in the organization is the first step in developing activity-based product costs.Which of the following is a way to identify these activities?

Correct Answer
verified

Which of the following is not a product- or service-related activity?

Correct Answer
verified

The following list includes activities that are performed in a CPA firm..Classify each activity as value-added or non-value added.

Correct Answer
verified

Which of the following is a product- or service-related activity?

Correct Answer
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Correct Answer
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The process of using activity-based cost...
View Answer

Correct Answer
verified

When using an activity-based costing system,which of the following is the formula for allocating costs to products or services?

Correct Answer
verified

Assigning manufacturing overhead cost to activity pools is referred to as first-stage allocation because

Correct Answer
verified

Which of the following would be considered a batch-level activity?

Correct Answer
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Correct Answer
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Gooding Company manufactures two models of its skillet,the Kitchen and the Campfire.The Kitchen model requires 10,000 direct labor hours and the Campfire requires 30,000 direct labor hours.The company produces 3,400

Correct Answer
verified

The examination of business processes to identify incremental changes that may reduce operating costs is referred to as

Correct Answer
verified

Turnbull Company produces two products and their overhead consists of setups $20,000; machining $2,220,000; and packing $80,000.Data for the current year follow: Beta Delta Number of setups 20 20 Machine hours 1,000 4,000 Packing orders 150 350 Number of

Correct Answer
verified

The first step in implementing an activity-based costing system begins with

Correct Answer
verified

Place an "X" in the column that corresponds to the type of activity level referred to in each scenario.

Correct Answer
verified

Exam 7: Activity-Based Costing and Activity Based Management

Activities that are performed all at once on groups of products is classified as an

Correct AnswerverifiedShow Answer

In an activity-based costing system,the benefits of defining more detailed activities will always outweigh the effort needed to monitor activity performance,and the resulting potential for error.

Correct AnswerverifiedShow Answer

Product-level activities are also referred to as

Correct AnswerverifiedShow Answer

Identifying activities performed in the organization is the first step in developing activity-based product costs.Which of the following is a way to identify these activities?

Correct AnswerverifiedShow Answer

Which of the following is not a product- or service-related activity?

Correct AnswerverifiedShow Answer

The following list includes activities that are performed in a CPA firm..Classify each activity as value-added or non-value added.

Correct AnswerverifiedShow Answer

Which of the following is a product- or service-related activity?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThe process of using activity-based cost...View AnswerShow Answer

Correct AnswerverifiedShow Answer

When using an activity-based costing system,which of the following is the formula for allocating costs to products or services?

Correct AnswerverifiedShow Answer

Assigning manufacturing overhead cost to activity pools is referred to as first-stage allocation because

Correct AnswerverifiedShow Answer

Which of the following would be considered a batch-level activity?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Gooding Company manufactures two models of its skillet,the Kitchen and the Campfire.The Kitchen model requires 10,000 direct labor hours and the Campfire requires 30,000 direct labor hours.The company produces 3,400

Correct AnswerverifiedShow Answer

The examination of business processes to identify incremental changes that may reduce operating costs is referred to as

Correct AnswerverifiedShow Answer

Turnbull Company produces two products and their overhead consists of setups $20,000; machining $2,220,000; and packing $80,000.Data for the current year follow: Beta Delta Number of setups 20 20 Machine hours 1,000 4,000 Packing orders 150 350 Number of

Correct AnswerverifiedShow Answer

The first step in implementing an activity-based costing system begins with

Correct AnswerverifiedShow Answer

Place an "X" in the column that corresponds to the type of activity level referred to in each scenario.

Correct AnswerverifiedShow Answer

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The process of using activity-based cost...
View 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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