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 non-value-added costs for materials?

A) $1,575,000 B) $157,500 C) $150,000 D) $75,000 A) $1,575,000 B) $157,500 C) $150,000 D) $75,000

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.What is the budgeted inspection cost for 20 setups?

A) $175,860 B) $40,000 C) $34,000 D) $30,000 A) $175,860 B) $40,000 C) $34,000 D) $30,000

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 unused capacity variance?

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

Exam 14: Activity-Based Management

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 non-value-added costs?

(Multiple Choice)

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Question 101

Which of the following involves choosing among various sets of activities that are caused by competing strategies?

(Multiple Choice)

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Question 102

What term refers to the adoption of new processes to meet strategic objectives?

(Multiple Choice)

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Question 103

Which of the following is descriptive of activity-based responsibility accounting?

(Multiple Choice)

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Question 104

Clark,Inc.,sells one of its products for $150 each.Sales volume averages 800 units per year.Recently,its main competitor reduced the price of its product to $130.Clark 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 800)is as follows: Materials (kilograms) 14,400 15,000 \ 30,000 Labour (hours) 2,000 2,400 18,000 Setups (hours) 0 1,400 8,000 Material handling (moves) 0 600 4,000 Warranties (number repaired) 0 400 20,000 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)

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Question 105

What term refers to incremental or continual increases in the efficiency of an existing product?

(Multiple Choice)

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Question 106

What process dimension of the activity-based management model deals with "why"?

(Multiple Choice)

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Question 107

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 non-value-added costs for materials?

(Multiple Choice)

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Question 108

What is process value analysis?

(Essay)

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Question 109

What is responsibility accounting? Compare and contrast financial-based responsibility accounting with activity-based responsibility accounting.

(Essay)

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Question 110

A company has 5 days of finished goods inventory on hand to avoid stockouts.The carrying costs of the inventory average $2,500 per day.What are the non-value-added costs?

(Multiple Choice)

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Question 111

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

(Multiple Choice)

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Question 112

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.What is the budgeted inspection cost for 20 setups?

(Multiple Choice)

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Question 113

Which of the following is a financial measure of activity efficiency?

(Multiple Choice)

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Question 114

Which of the following is one of the major reasons for ABM implementation failure?

(Multiple Choice)

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Question 115

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 unused capacity variance?

(Multiple Choice)

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Question 116

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 non-value-added costs?

Which of the following involves choosing among various sets of activities that are caused by competing strategies?

What term refers to the adoption of new processes to meet strategic objectives?

Which of the following is descriptive of activity-based responsibility accounting?

What term refers to incremental or continual increases in the efficiency of an existing product?

What process dimension of the activity-based management model deals with "why"?

What is process value analysis?

What is responsibility accounting? Compare and contrast financial-based responsibility accounting with activity-based responsibility accounting.

A company has 5 days of finished goods inventory on hand to avoid stockouts.The carrying costs of the inventory average $2,500 per day.What are the non-value-added costs?

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

Which of the following is a financial measure of activity efficiency?

Which of the following is one of the major reasons for ABM implementation failure?

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 unused capacity variance?

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

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