Larry Corporation has developed ideal standards for four activities: labour, materials, inspection, and receiving. Information is as follows: $\begin{array}{llccc} \underline{\text { Activity }} &\underline{ \text { Activity Driver }} & \underline{\text {S Q}} & \underline{\text {A Q}}&\underline{\text {SP}}\\ \text { Inspection } & \text { Inspection hours } & 0 & 40,000&\$12 \\ \text { Labour } & \text { Hours } & 50,000 & 56,000&18 \\ \text { Materials } & \text { Kilograms } & 100,000 & 105,000 &15\\ \text { Receiving } & \text { Orders } & 150 & 190&450 \end{array}$ The actual prices paid per unit of each activity driver were equal to the standard prices. -Refer to the figure.What are the actual costs for receiving?

A) $85,500 B) $67,500 C) $49,500 D) $18,000 A) $85,500 B) $67,500 C) $49,500 D) $18,000

Allende Company has developed capacity standards. Information is as follows for a value-added activity: \[\begin{array} { l } \text { Activity capacity acquired }&60 \\ \text { Activity capacity used } &50\\ \text { Actual activity usage }&30 \\ \text { Standard fixed activity rate }&\$2,000 \end{array}\] -Refer to the figure.What is the volume variance?

A) $20,000 unfavourable B) $40,000 unfavourable C) $50,000 unfavourable D) $60,000 unfavourable A) $20,000 unfavourable B) $40,000 unfavourable C) $50,000 unfavourable D) $60,000 unfavourable

Rollo Company has developed cost formulas for the drivers of the following production activities: \[\begin{array} { l l c c } \text { Driver } & \text { Activits } & \text { Fixed } & \text { Variale } \\ \hline \text { Labour hours } & \text { Materials } & \$ 0 & \$ 20 \\ \text { Labour hours } & \text { Labour } & 0 & 10 \\ \text { Machine hours } & \text { Maintenance } & 10,000 & 8 \\ \text { Machine hours } & \text { Machiring } & 50,000 & 2 \\ \text { Number of setups } & \text { Inspections } & 30,000 & 200 \\ \text { Number of setups } & \text { Setups } & 0 & 300 \\ \text { Number of purchase arders } & \text { Purchasing } & 75,00 & 3 \end{array}\] -Refer to the figure.If the actual activity was 20 setups and the actual fixed cost for inspections was $28,000 and the variable cost for inspections was $5,000,what is the total variance for inspections due to?

A) favourable variance on fixed costs B) unfavourable variance on fixed costs C) favourable variance on variable costs D) unfavourable variance on variable costs A) favourable variance on fixed costs B) unfavourable variance on fixed costs C) favourable variance on variable costs D) unfavourable variance on variable costs

Exam 14: Activity-Based Management

Given the following data: Activity Driver SQ2009 AQ2009 SP2009 SQ2010 AQ2010 SP2010 Purchasing Purchase Orders 2,000 3,000 \ 75 2,000 2,500 \ 75 Receiving Receiving Orders 3,750 4,300 \ 50 3,750 4,000 \ 50 Moving \# of moves 0 300 \ 100 0 200 \ 100 Setups \# of setups 0 75 \ 200 0 50 \ 200 a.Determine the value-added and non-value added costs for each category for the current year and the following year. b.Prepare a trend report that compares the current year and the following year.

(Essay)

4.8/5

(84)

Question 81

Larry Corporation has developed ideal standards for four activities: labour, materials, inspection, and receiving. Information is as follows: Inspection Inspection hours 0 40,000 \1 2 Labour Hours 50,000 56,000 18 Materials Kilograms 100,000 105,000 15 Receiving Orders 150 190 450 The actual prices paid per unit of each activity driver were equal to the standard prices. -Refer to the figure.What are the actual costs for receiving?

(Multiple Choice)

4.8/5

(68)

Question 82

Which of the following is an example of a non-value-added manufacturing activity?

(Multiple Choice)

4.9/5

(91)

Question 83

A firm's warranty costs are $225,000 per year.A competitor's warranty costs are $75,000 per year.What are the non-value-added costs?

(Multiple Choice)

4.9/5

(82)

Question 84

A firm's warranty costs are $425,000 per year.A competitor's warranty costs are $155,000 per year.What are the non-value-added costs?

(Multiple Choice)

4.9/5

(77)

Question 85

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

(Multiple Choice)

4.8/5

(78)

Question 86

Each unit of product requires 16 kilograms of material.Due to scrap and rework,each unit has been averaging 18 kilograms of material.The material costs $6 per pound.What would be the currently attainable standard for material if the company wants to reduce non-value-added costs by 25 percent next year?

(Multiple Choice)

4.7/5

(71)

Question 87

A company keeps 20 days of materials inventory on hand to avoid shutdowns due to materials shortages. Carrying costs average $4,000 per day. A competitor keeps 10 days of inventory on hand, and the competitor’s carrying costs average $2,000 per day. -Refer to the figure.What are the non-value-added costs for the company?

(Multiple Choice)

5.0/5

(74)

Question 88

What is an activity output measure?

(Multiple Choice)

4.9/5

(90)

Question 89

Allende Company has developed capacity standards. Information is as follows for a value-added activity: Activity capacity acquired 60 Activity capacity used 50 Actual activity usage 30 Standard fixed activity rate \2 ,000 -Refer to the figure.What is the volume variance?

(Multiple Choice)

4.8/5

(85)

Question 90

Setup time for a product is 12 hours. A firm that uses JIT and produces the same product has reduced setup time to 1 hour. Setup labour is $6 per hour. -Refer to the figure.What are the non-value-added costs?

(Multiple Choice)

4.8/5

(70)

Question 91

A time-and-motion study revealed that it should take 3 hours to produce a product that currently takes 7.5 hours to produce.Labour is $18 per hour.What are the value-added costs?

(Multiple Choice)

4.9/5

(85)

Question 92

What is the capacity variance composed of aside from the unused capacity variance?

(Multiple Choice)

4.8/5

(82)

Question 93

Rollo Company has developed cost formulas for the drivers of the following production activities: Driver Activits Fixed Variale Labour hours Materials \ 0 \ 20 Labour hours Labour 0 10 Machine hours Maintenance 10,000 8 Machine hours Machiring 50,000 2 Number of setups Inspections 30,000 200 Number of setups Setups 0 300 Number of purchase arders Purchasing 75,00 3 -Refer to the figure.If the actual activity was 20 setups and the actual fixed cost for inspections was $28,000 and the variable cost for inspections was $5,000,what is the total variance for inspections due to?

(Multiple Choice)

4.8/5

(82)

Question 94

Activity-based management can be viewed as an information system with broad objectives.Which of the following is NOT one of the broad objectives of ABM?

(Multiple Choice)

4.9/5

(80)

Question 95

How is controlling the cost reduction process using kaizen costing accomplished?

(Multiple Choice)

4.9/5

(87)

Question 96

What is the term for the effort to reduce costs of existing products and processes?

(Multiple Choice)

4.9/5

(72)

Question 97

What are value-added costs?

(Multiple Choice)

4.9/5

(75)

Question 98

Park,Inc.,sells one of its products for $40 each.Sales volume averages 2,000 units per year.Recently,its main competitor reduced the price of its product to $28.Park 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 2,000)is as follows: Materials (kilograms) 4,900 5,000 \ 20,000 Labour (hours) 1,200 1,250 10,000 Setups (hours) 0 200 6,000 Material handling (moves) 0 350 2,000 Warranties (number repaired) 0 250 10,000 a.Calculate the target cost for maintaining current market share and profitability. b.Calculate the non-value-added cost per unit. c.If non-value-added costs can be reduced to zero,can the target cost be achieved?

(Essay)

4.8/5

(82)

Question 99

Bobby,Inc.,has developed ideal standards for four activities: labour,materials,inspection,and receiving. Information is as follows: Activit Activit Driver Labour Hours 20,000 28,000 10 Materials Kilograns 100,00 150,000 9 Inspection Inspection hours 0 40,000 6 Receiving Orders 500 600 425 The actual prices paid per unit of each activity driver were equal to the standard prices. Complete the following cost report. Activity Value-Added Non-value-Added Actual Labour underline underline underline Materials Inspection Receiving Totals underline underline underline \

(Essay)

4.8/5

(88)

Question 100

Which of the following is an example of a non-value-added manufacturing activity?

A firm's warranty costs are $225,000 per year.A competitor's warranty costs are $75,000 per year.What are the non-value-added costs?

A firm's warranty costs are $425,000 per year.A competitor's warranty costs are $155,000 per year.What are the non-value-added costs?

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

What is an activity output measure?

Allende Company has developed capacity standards. Information is as follows for a value-added activity: Activity capacity acquired 60 Activity capacity used 50 Actual activity usage 30 Standard fixed activity rate \2 ,000 -Refer to the figure.What is the volume variance?

Setup time for a product is 12 hours. A firm that uses JIT and produces the same product has reduced setup time to 1 hour. Setup labour is $6 per hour. -Refer to the figure.What are the non-value-added costs?

A time-and-motion study revealed that it should take 3 hours to produce a product that currently takes 7.5 hours to produce.Labour is $18 per hour.What are the value-added costs?

What is the capacity variance composed of aside from the unused capacity variance?

Activity-based management can be viewed as an information system with broad objectives.Which of the following is NOT one of the broad objectives of ABM?

How is controlling the cost reduction process using kaizen costing accomplished?

What is the term for the effort to reduce costs of existing products and processes?

What are value-added costs?

A: Basic Cost Management Concepts

B: Basic Cost Management Concepts

Cost Behaviour

Cost-Volume-Profit Analysis

Job-Order Costing Systems

Process Costing

Activity-Based Costing

Allocating Costs of Support Departments and Joint Products

Budgeting for Planning and Control

Standard Costing: a Functional-Based Control Approach

Responsibility Accounting,performance Evaluation,and Transfer Pricing

Tactical Decision Making

Pricing and Profitability Analysis

Strategic Cost Management

The Balanced Scorecard: Strategic-Based Control

Quality and Environmental Cost Management

Lean Accounting and Productivity Measurement

Inventory Management: Economic Order Quantity,jit,and the Theory of Constraints

Filters