Question 1

Which of the following is NOT an expected outcome of activity analysis?

Accepted Answer

A)  What activities are performed? 
B)  How many people perform the activities? 
C)  The time and resources required to perform the activities. 
D)  All of these are expected outcomes. 
A)  What activities are performed? 
B)  How many people perform the activities? 
C)  The time and resources required to perform the activities. 
D)  All of these are expected outcomes.

Question 2

The activities necessary to remain in business are called:

Accepted Answer

A)  Value-added activities 
B)  Activity inputs 
C)  Activity outputs 
D)  Activity drivers 
A)  Value-added activities 
B)  Activity inputs 
C)  Activity outputs 
D)  Activity drivers

Question 3

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

Accepted Answer

Responsibility accounting is a fundament

Question 4

The major source of information for the activity management system is

Accepted Answer

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

Question 5

Activity-based costing does not provide good information for activity-based management.

Accepted Answer

A) True 
 B)False

Question 6

The activity-based management model has two dimensions: a cost dimension and a process dimension.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is a reason for managerial activity to be considered a value-added activity?

Accepted Answer

A)  It is an enabling resource for operational activities that bring about a change of state. 
B)  Managing activities brings order by changing the state from uncoordinated activities to coordinated activities. 
C)  Both are reasons for classifying managerial activities as value-added activity. 
D)  Neither is a reason for classifying managerial activities as value-added activity. 
A)  It is an enabling resource for operational activities that bring about a change of state. 
B)  Managing activities brings order by changing the state from uncoordinated activities to coordinated activities. 
C)  Both are reasons for classifying managerial activities as value-added activity. 
D)  Neither is a reason for classifying managerial activities as value-added activity.

Question 8

A company has 19 days of finished goods inventory on hand to avoid stockouts. The carrying costs of the inventory average $6,000 per day. The value-added costs would be

Accepted Answer

A)  $100,000. 
B)  $-0-. 
C)  $5,000. 
D)  $10,000. 
A)  $100,000. 
B)  $-0-. 
C)  $5,000. 
D)  $10,000.

Question 9

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

Accepted Answer

A)  $27. 
B)  $135. 
C)  $81. 
D)  $54. 
A)  $27. 
B)  $135. 
C)  $81. 
D)  $54.

Question 10

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

Accepted Answer

A)  16.00 pounds. 
B)  17.50 pounds. 
C)  16.80 pounds. 
D)  18.00 pounds. 
A)  16.00 pounds. 
B)  17.50 pounds. 
C)  16.80 pounds. 
D)  18.00 pounds.

Question 11

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

Accepted Answer

A)  supervision of production workers 
B)  inspection of products 
C)  scheduling of production 
D)  All of these are value-added activities. 
A)  supervision of production workers 
B)  inspection of products 
C)  scheduling of production 
D)  All of these are value-added activities.

Question 12

Value-added costs are standard costs based on

Accepted Answer

A)  currently attainable standards. 
B)  ideal usage standards. 
C)  cycle time. 
D)  the value added. 
A)  currently attainable standards. 
B)  ideal usage standards. 
C)  cycle time. 
D)  the value added.

Question 13

Non-value-added activities

Accepted Answer

A)  are unnecessary inputs. 
B)  are valued outputs to internal users. 
C)  are valued outputs to external users. 
D)  help meet the organization's needs, not the product needs. 
A)  are unnecessary inputs. 
B)  are valued outputs to internal users. 
C)  are valued outputs to external users. 
D)  help meet the organization's needs, not the product needs.

Question 14

The effort expended to identify those factors that are the root causes of activity costs is(are) called:

Accepted Answer

A)  Driver analysis 
B)  Activity outputs 
C)  Activity inputs 
D)  Value-added activities 
A)  Driver analysis 
B)  Activity outputs 
C)  Activity inputs 
D)  Value-added activities

Question 15

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

Accepted Answer

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

Question 16

Which of the following is NOT a reason for ABM implementation failure?

Accepted Answer

A)  lack of support from higher-level managers 
B)  expected results do not materialize 
C)  implementation is performed in a timely fashion 
D)  resistance to change 
A)  lack of support from higher-level managers 
B)  expected results do not materialize 
C)  implementation is performed in a timely fashion 
D)  resistance to change

Question 17

Activity-based management attempts to

Accepted Answer

A)  identify and eliminate all unnecessary activities. 
B)  increase the efficiency of necessary activities. 
C)  add new activities that increase value. 
D)  all of these. 
A)  identify and eliminate all unnecessary activities. 
B)  increase the efficiency of necessary activities. 
C)  add new activities that increase value. 
D)  all of these.

Question 18

Which of the following is NOT a necessary condition for classification as a value-added activity?

Accepted Answer

A)  The activity produces no change of state. 
B)  The change of state was not achievable by preceding activities. 
C)  Activity enables other activities to be performed. 
D)  All of these are necessary conditions. 
A)  The activity produces no change of state. 
B)  The change of state was not achievable by preceding activities. 
C)  Activity enables other activities to be performed. 
D)  All of these are necessary conditions.

Question 19

Financial-based responsibility accounting focuses on functional organizational units.

Accepted Answer

A) True 
 B)False

Question 20

Activity-based costing is very concerned with waste issues.

Accepted Answer

A) True 
 B)False

Which of the following is NOT an expected outcome of activity analysis?

The activities necessary to remain in business are called:

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

The major source of information for the activity management system is

Activity-based costing does not provide good information for activity-based management.

The activity-based management model has two dimensions: a cost dimension and a process dimension.

Which of the following is a reason for managerial activity to be considered a value-added activity?

A company has 19 days of finished goods inventory on hand to avoid stockouts. The carrying costs of the inventory average $6,000 per day. The value-added costs would be

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

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

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

Value-added costs are standard costs based on

Non-value-added activities

The effort expended to identify those factors that are the root causes of activity costs is(are) called:

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

Which of the following is NOT a reason for ABM implementation failure?

Activity-based management attempts to

Which of the following is NOT a necessary condition for classification as a value-added activity?

Financial-based responsibility accounting focuses on functional organizational units.

Activity-based costing is very concerned with waste issues.

Introduction to Cost Management

Basic Cost Management Concepts

Cost Behavior

Activity-Based Costing

Product and Service Costing: Job-Order System

Process Costing

Allocating Costs of Support Departments and Joint Products

Budgeting for Planning and Control

Standard Costing: a Functional-Based Control Approach

Decentralization: Responsibility, Accounting, Performance Evaluation, and Transfer Pricing

Strategic Cost Management

The Balanced Scorecard: Strategic-Based Control

Quality and Environmental Cost Management

Lean Accounting and Productivity Measurement

Cost-Volume-Profit Analysis

Activity Resource Usage Model and Tactical Decision Making

Pricing and Profitability Analysis

Capital Investment

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

Filters

Exam 12: Activity-Based Management

Which of the following is NOT an expected outcome of activity analysis?

The activities necessary to remain in business are called:

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

The major source of information for the activity management system is

Activity-based costing does not provide good information for activity-based management.

The activity-based management model has two dimensions: a cost dimension and a process dimension.

Which of the following is a reason for managerial activity to be considered a value-added activity?

A company has 19 days of finished goods inventory on hand to avoid stockouts. The carrying costs of the inventory average $6,000 per day. The value-added costs would be

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

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

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

Value-added costs are standard costs based on

Non-value-added activities

The effort expended to identify those factors that are the root causes of activity costs is(are) called:

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

Which of the following is NOT a reason for ABM implementation failure?

Activity-based management attempts to

Which of the following is NOT a necessary condition for classification as a value-added activity?

Financial-based responsibility accounting focuses on functional organizational units.

Activity-based costing is very concerned with waste issues.

Introduction to Cost Management

Basic Cost Management Concepts

Cost Behavior

Activity-Based Costing

Product and Service Costing: Job-Order System

Process Costing

Allocating Costs of Support Departments and Joint Products

Budgeting for Planning and Control

Standard Costing: a Functional-Based Control Approach

Decentralization: Responsibility, Accounting, Performance Evaluation, and Transfer Pricing

Strategic Cost Management

The Balanced Scorecard: Strategic-Based Control

Quality and Environmental Cost Management

Lean Accounting and Productivity Measurement

Cost-Volume-Profit Analysis

Activity Resource Usage Model and Tactical Decision Making

Pricing and Profitability Analysis

Capital Investment

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

Filters