Question 1

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

Accepted Answer

A)  resources 
B)  cost driver analysis 
C)  activities 
D)  performance measures 
A)  resources 
B)  cost driver analysis 
C)  activities 
D)  performance measures

Question 2

____ focuses on nonvalue-added activities.

Accepted Answer

A)  Activity sharing 
B)  Activity elimination 
C)  Activity selection 
D)  Activity reduction 
A)  Activity sharing 
B)  Activity elimination 
C)  Activity selection 
D)  Activity reduction

Question 3

Figure 21-8
At the beginning of the year, Grant Company initiated a quality improvement program. The program was successful in reducing scrap and rework costs. To help assess the impact of the quality improvement program, the following data were collected for the current and preceding years:  
-Which of the following statements is true concerning continuous improvement costing?

Accepted Answer

A)  It is also referred to as Kanban costing. 
B)  It is a prerequisite for target pricing. 
C)  It calls for the establishment of cost reduction targets for products or services. 
D)  All of the above statements are true. 
A)  It is also referred to as Kanban costing. 
B)  It is a prerequisite for target pricing. 
C)  It calls for the establishment of cost reduction targets for products or services. 
D)  All of the above statements are true.

Question 4

Which of the following focuses on the relationship of activity inputs to activity outputs?

Accepted Answer

A)  activity reduction 
B)  quality 
C)  time 
D)  efficiency 
A)  activity reduction 
B)  quality 
C)  time 
D)  efficiency

Question 5

Figure 21-6
Brad Company developed the following budgeted life-cycle income statement for two proposed products. Each product's life cycle is expected to be two years.   A 10 per cent return on sales is required for new products. Because the proposed products did not have a 10 per cent return on sales, the products were going to be dropped.
Relative to Product B, Product A requires more research and development costs but fewer resources to market the product. Sixty per cent of the research and development costs are traceable to Product A, and 30 per cent of the marketing costs are traceable to Product A.
-Refer to Figure 21-6. If research and development costs and marketing costs are traced to each product, life-cycle income for Product A would be

Accepted Answer

A)  £38,000. 
B)  £27,000. 
C)  £23,000. 
D)  £15,000. 
A)  £38,000. 
B)  £27,000. 
C)  £23,000. 
D)  £15,000.

Question 6

Reengineering is another name for

Accepted Answer

A)  product innovation. 
B)  process innovation. 
C)  process improvement. 
D)  product improvement. 
A)  product innovation. 
B)  process innovation. 
C)  process improvement. 
D)  product improvement.

Question 7

JIT reduces lead times to meet delivery dates by

Accepted Answer

A)  reducing setup times. 
B)  expediting delivery to customers. 
C)  having more inventory available. 
D)  working overtime to fill orders. 
A)  reducing setup times. 
B)  expediting delivery to customers. 
C)  having more inventory available. 
D)  working overtime to fill orders.

Question 8

The demand-pull system requires goods to be manufactured based on the

Accepted Answer

A)  current demand. 
B)  anticipated demand. 
C)  previous year's demand. 
D)  average of the next five years' demand. 
A)  current demand. 
B)  anticipated demand. 
C)  previous year's demand. 
D)  average of the next five years' demand.

Question 9

An activity analysis is used to determine

Accepted Answer

A)  the activities an organization performs. 
B)  how many people perform activities. 
C)  the time and resources required to perform activities. 
D)  all of the above. 
A)  the activities an organization performs. 
B)  how many people perform activities. 
C)  the time and resources required to perform activities. 
D)  all of the above.

Question 10

In the zero-defects view of quality,

Accepted Answer

A)  control costs do not increase without limit. 
B)  control costs initially increase and then decrease as the firm approaches the robust start. 
C)  failure costs can be driven to zero. 
D)  all of the above are true. 
A)  control costs do not increase without limit. 
B)  control costs initially increase and then decrease as the firm approaches the robust start. 
C)  failure costs can be driven to zero. 
D)  all of the above are true.

Question 11

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

Accepted Answer

A)  resources 
B)  cost driver analysis 
C)  activities 
D)  performance measures 
A)  resources 
B)  cost driver analysis 
C)  activities 
D)  performance measures

Question 12

In comparison to a traditional environment, a JIT environment has more overhead assigned by

Accepted Answer

A)  direct tracing. 
B)  driver tracing. 
C)  allocation. 
D)  Overhead assignment is the same between traditional and JIT. 
A)  direct tracing. 
B)  driver tracing. 
C)  allocation. 
D)  Overhead assignment is the same between traditional and JIT.

Question 13

Which of the following is NOT an internal failure activity?

Accepted Answer

A)  treating and disposing of toxic waste 
B)  maintaining pollution equipment 
C)  licensing facilities for producing contaminants 
D)  cleaning up a polluted lake 
A)  treating and disposing of toxic waste 
B)  maintaining pollution equipment 
C)  licensing facilities for producing contaminants 
D)  cleaning up a polluted lake

Question 14

Figure 21-5
At the beginning of this year, Sammie Company installed a JIT purchasing and manufacturing system. The following information has been gathered about one of the company's products:  
-Refer to Figure 21-5. Sammie's theoretical cycle time for this year would be

Accepted Answer

A)  2.00 hours per unit. 
B)  1.80 hours per unit. 
C)  0.56 hours per unit. 
D)  0.50 hours per unit. 
A)  2.00 hours per unit. 
B)  1.80 hours per unit. 
C)  0.56 hours per unit. 
D)  0.50 hours per unit.

Question 15

Figure 21-8
At the beginning of the year, Grant Company initiated a quality improvement program. The program was successful in reducing scrap and rework costs. To help assess the impact of the quality improvement program, the following data were collected for the current and preceding years:  
-Grayson, SA., has developed ideal standards for four activities: labour, 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:

Accepted Answer

The answer of Figure 21-8
At the beginning of the year,...

Question 16

The major source of information for the activity cost management system is

Accepted Answer

A)  cost driver analysis. 
B)  an activity- based costing system. 
C)  a performance measurement system. 
D)  product information. 
A)  cost driver analysis. 
B)  an activity- based costing system. 
C)  a performance measurement system. 
D)  product information.

Question 17

Life-cycle cost management is particularly important for firms that have

Accepted Answer

A)  short life cycles because those firms have less opportunity to take advantage of the time value of money. 
B)  long life cycles because those firms have more opportunity to take advantage of the time value of money. 
C)  long life cycles because those firms have more opportunity to enhance profit performance through product redesign or cost reduction. 
D)  short life cycles because those firms have less opportunity to enhance profit performance through product redesign or cost reduction. 
A)  short life cycles because those firms have less opportunity to take advantage of the time value of money. 
B)  long life cycles because those firms have more opportunity to take advantage of the time value of money. 
C)  long life cycles because those firms have more opportunity to enhance profit performance through product redesign or cost reduction. 
D)  short life cycles because those firms have less opportunity to enhance profit performance through product redesign or cost reduction.

Question 18

Figure 21-8
At the beginning of the year, Grant Company initiated a quality improvement program. The program was successful in reducing scrap and rework costs. To help assess the impact of the quality improvement program, the following data were collected for the current and preceding years:  
-As preventive and appraisal costs increase, internal and external failure costs are expected to

Accepted Answer

A)  decrease. 
B)  increase. 
C)  remain the same. 
D)  vary with no relation to preventive and appraisal costs. 
A)  decrease. 
B)  increase. 
C)  remain the same. 
D)  vary with no relation to preventive and appraisal costs.

Question 19

Figure 21-6
Brad Company developed the following budgeted life-cycle income statement for two proposed products. Each product's life cycle is expected to be two years.   A 10 per cent return on sales is required for new products. Because the proposed products did not have a 10 per cent return on sales, the products were going to be dropped.
Relative to Product B, Product A requires more research and development costs but fewer resources to market the product. Sixty per cent of the research and development costs are traceable to Product A, and 30 per cent of the marketing costs are traceable to Product A.
-Refer to Figure 21-6. If research and development costs and marketing costs are traced to each product, life-cycle income for Product B would be

Accepted Answer

A)  £35,000. 
B)  £20,000. 
C)  £12,000. 
D)  £7,000. 
A)  £35,000. 
B)  £20,000. 
C)  £12,000. 
D)  £7,000.

Question 20

JIT avoids shutdowns due to materials shortages in all of the following ways EXCEPT

Accepted Answer

A)  using total preventive maintenance. 
B)  holding inventory. 
C)  using total quality control to reduce defective materials. 
D)  working with suppliers to ensure the availability of materials. 
A)  using total preventive maintenance. 
B)  holding inventory. 
C)  using total quality control to reduce defective materials. 
D)  working with suppliers to ensure the availability of materials.

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

____ focuses on nonvalue-added activities.

Which of the following focuses on the relationship of activity inputs to activity outputs?

Reengineering is another name for

JIT reduces lead times to meet delivery dates by

The demand-pull system requires goods to be manufactured based on the

An activity analysis is used to determine

In the zero-defects view of quality,

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

In comparison to a traditional environment, a JIT environment has more overhead assigned by

Which of the following is NOT an internal failure activity?

Figure 21-5 At the beginning of this year, Sammie Company installed a JIT purchasing and manufacturing system. The following information has been gathered about one of the company's products: -Refer to Figure 21-5. Sammie's theoretical cycle time for this year would be

The major source of information for the activity cost management system is

Life-cycle cost management is particularly important for firms that have

JIT avoids shutdowns due to materials shortages in all of the following ways EXCEPT

Introduction to Management Accounting

An Introduction to Cost Terms and Concepts

Cost Assignment

Accounting Entries for a Job Costing System

Process Costing

Joint and By-Product Costing

Income Effects of Alternative Cost Accumulation Systems

Cost-Volume-Profit Analysis

Measuring Relevant Costs and Revenues for Decision-Making

Activity-Based Costing

Pricing Decisions and Profitability Analysis

Decision-Making Under Conditions of Risk and Uncertainty

Capital Investment Decisions: Appraisal Methods

Capital Investment Decisions: the Impact of Capital Rationing, Taxation, Inflation and Risk

The Budgeting Process

Management Control Systems

Standard Costing and Variance Analysis 1

Standard Costing and Variance Analysis 2: Further Aspects

Divisional Financial Performance Measures

Transfer Pricing in Divisionalized Companies

Strategic Management Accounting

Cost Estimation and Cost Behaviour

Quantitative Models for the Planning and Control of Stocks

The Application of Linear Programming to Management Accounting

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Exam 21: Cost Management

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

____ focuses on nonvalue-added activities.

Which of the following focuses on the relationship of activity inputs to activity outputs?

Reengineering is another name for

JIT reduces lead times to meet delivery dates by

The demand-pull system requires goods to be manufactured based on the

An activity analysis is used to determine

In the zero-defects view of quality,

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

In comparison to a traditional environment, a JIT environment has more overhead assigned by

Which of the following is NOT an internal failure activity?

Figure 21-5 At the beginning of this year, Sammie Company installed a JIT purchasing and manufacturing system. The following information has been gathered about one of the company's products: -Refer to Figure 21-5. Sammie's theoretical cycle time for this year would be

The major source of information for the activity cost management system is

Life-cycle cost management is particularly important for firms that have

JIT avoids shutdowns due to materials shortages in all of the following ways EXCEPT

Introduction to Management Accounting

An Introduction to Cost Terms and Concepts

Cost Assignment

Accounting Entries for a Job Costing System

Process Costing

Joint and By-Product Costing

Income Effects of Alternative Cost Accumulation Systems

Cost-Volume-Profit Analysis

Measuring Relevant Costs and Revenues for Decision-Making

Activity-Based Costing

Pricing Decisions and Profitability Analysis

Decision-Making Under Conditions of Risk and Uncertainty

Capital Investment Decisions: Appraisal Methods

Capital Investment Decisions: the Impact of Capital Rationing, Taxation, Inflation and Risk

The Budgeting Process

Management Control Systems

Standard Costing and Variance Analysis 1

Standard Costing and Variance Analysis 2: Further Aspects

Divisional Financial Performance Measures

Transfer Pricing in Divisionalized Companies

Strategic Management Accounting

Cost Estimation and Cost Behaviour

Quantitative Models for the Planning and Control of Stocks

The Application of Linear Programming to Management Accounting

Filters