Exam 7: Activity-Based Costing and Management

A focus on cost reduction instead of cost assignment and emphasizing the maximization of systemwide performance is known as _______________________.

Activities necessary to remain in business

Match each item with the correct statement below. -Factors that measure the consumption of activities by products and other cost objects.

A ____________________ is classified as value-added provided it simultaneously meets three conditions.

Figure 7-2.Steller Manufacturing has two classes of distributors: JIT distributors and non-JIT distributors. The JIT distributor places small, frequent orders and the non-JIT distributor tends to place larger, less frequent orders. Both types of distributors purchase the same product. The customer activities and costs for the previous quarter are found below: -Refer to Figure 7-2. Calculate the activity rate for selling goods.

When a new product can be designed to use components already being used by other products this is known as ________________.

Figure 7-5.Rizzo Manufacturing produces two types of cameras: 35mm and digital. The cameras are produced using one continuous process. Four activities have been identified: machining, setups, receiving, and packing. Resource drivers have been used to assign costs to each activity. The overhead activities, their costs, and the other related data are as follows: -Refer to Figure 7-5. Calculate a consumption ratio for setups on the digital cameras.

Figure 7-7.Armstrong Company produces a variety of bicycles. One of its plants produces two bicycles: a mountain model and a racing model. At the beginning of the year, the following data were prepared for this plant: In addition, the following information was provided so that overhead costs could be assigned to each product: -Refer to Figure 7-7.

An activity dictionary lists the activities in an organization along with some critical activity attributes.

Figure 7-5.Rizzo Manufacturing produces two types of cameras: 35mm and digital. The cameras are produced using one continuous process. Four activities have been identified: machining, setups, receiving, and packing. Resource drivers have been used to assign costs to each activity. The overhead activities, their costs, and the other related data are as follows: -Refer to Figure 7-5. Calculate an activity rate for packing based on packing orders.

Rollo Company has developed cost formulas for the drivers of the following production activities: The budgeted inspection cost for 20 setups is

Figure 7-6.Xander Company produces televisions. One of its plants produces two versions of televisions: a basic model and a premium model. At the beginning of the year, the following data were prepared for the plant: Additionally, the following overhead activity costs are reported: Xander uses activity-based costing to calculate product cost. -Refer to Figure 7-6.

___________________ are performed each time a unit is produced.

Nonvalue-added activities

A list of activities accompanied by information that describes each activity is an activity ____.

To calculate an activity rate, the practical capacity of each activity must be determined.

Which is not a component of process value analysis?

Match each item with the correct statement below. -Result or product of an activity.

Tracing ________________ costs to suppliers can enable managers to choose the true low-cost supplier.

A company takes 8,000 hours to produce 24,000 units of a product. What is the velocity?