Reference no: EM13913539

1. The first stage of an activity-based costing system does not involve:

a. Identifying activities and its attributes

b. Identifying activity attributes

c. Assigning costs

d. Preparing activity dictionary

 

2. According to the video, what is the output of the processing activity?

a. Number of statements

b. Number of transactions

c. Number of cards

d. Number of teller transactions

 

3. An activity dictionary consists of a(an) _________.

a. Activity description

b. Cost object

c. Activity driver

d. All of these choices are correct.

 

4. What is the purpose of interview questions?

a. It helps to identify activities and activity drivers.

b. It helps to identify the resources spent on each activity.

c. It helps to determine the time spent on each activity by the employees.

d. All of these choices are correct.

 

5. "We have three products: classic, gold, and platinum credit cards. We process transactions for these three types of cards, and we send statements to clients holding them. Similarly, we answer the questions of all clients who hold these cards."

This is the response for which of the following questions?

a. Who or what uses the activity output?

b. What are the outputs of each activity?

c. What resources are used by each activity?

d. How much time do workers spend on each activity?

1. When is driver tracing used?

a. When the resource is shared by more than one activity.

b. When the resource is exclusive to the activity.

c. When the resource is a labor resource.

d. All of these choices are correct.

6. According to the video, how is the cost of computers assigned to the activities?

a. Using direct tracing.

b. Using driver tracing.

c. Using both direct tracing and driver tracing.

d. Using resource drivers.

 

7. According to the video, what is the basis for assigning labor costs to the activity?

a. Total number of transactions.

b. Time spent on each activity.

c. Total number of employees.

d. Hours of usage of computers.

 

8. How are costs assigned to products?

a. By multiplying a predetermined activity rate by the usage of the activity.

b. By dividing the activity costs by the total driver quantity for each activity.

c. By dividing a predetermined activity rate by the usage of the activity.

d. By multiplying the activity costs by the total driver quantity for each activity.

 

9. The total cost of a resource is $160,000 and the resource is shared by three activities according to the relative usage of 20%, 30%, and 50%. How much is assigned to each activity one, two, and three?

a. Activity one $32,000

b. Activity two $48,000

c. Activity three $80,000

d. All of these choices are correct.

10. A Decision-making Model includes:

a. Recognizing the problem and identifying alternatives as possible solutions to the problem.

b. Identifying and estimating the relevant costs and benefits for each feasible alternative.

c. Making the decision by selecting the alternative with the greatest overall net benefit.

d. All of these choices are correct.

 

11. Which of the following should be kept in mind while analyzing a Make or Buy decision?

a. Ensure that quality is not at risk.

b. Use differential analysis.

c. Ensure prompt delivery.

d. All of these choices are correct.

 

12. Cost of manufacturing does not include:

a. Direct material and Direct labor

b. Variable manufacturing overhead

c. Fixed manufacturing overhead

d. Cost of purchase

 

13. What would be the total cost of buying, if a company decides to buy a product instead of manufacturing it? Assume that all fixed costs are unavoidable.

a. Purchase price

b. (Purchase price) + (Fixed cost)

c. (Purchase price) + (Fixed cost) + (Variable cost)

d. (Purchase price) - (Fixed cost)

 

14. Which of the following steps is considered the first step in the managerial decision-making process?

a. Gather information and perform a differential analysis.

b. Review, analyze, and assess the results of the decision.

c. Identify alternative courses of action.

d. Identify the objective of the decision.

 

15. An analysis that evaluates differential revenues and costs in order to determine the differential impact on income of two alternative courses of action is called __________ analysis.

a. horizontal

b. vertical

c. ratio

d. None of these choices are correct.

 

16. __________ costs are costs that have been incurred in the past, cannot be recouped, and are not relevant to future decisions.

a. Sunk

b. Historical

c. Product

d. None of these choices are correct.

 

17. The revenue that is forgone from an alternative use of an asset, such as cash, is called

a. sacrificial revenue.

b. an opportunity cost.

c. an economic loss.

d. None of these choices are correct.

 

18. All of the following are cost-plus methods to determine selling price except

a. product cost concept.

b. total cost concept.

c. variable cost concept.

d. fixed cost concept.

19. Normal selling price can be determined by

a. cost amount per unit plus markup.

b. cost amount per unit minus markup.

c. cost amount per unit divided by markup.

d. None of these choices are correct.

 

20. Target cost can be computed by

a. cost per unit minus desired profit.

b. expected selling price minus desired profit.

c. revenue minus expenses.

d. None of these choices are correct.

 

21. A point in the manufacturing process where the demand for the company's product exceeds the ability to produce the product is known as

a. production bottleneck.

b. production shortage.

c. production surplus.

d. None of these choices are correct.

 

22. In a production bottleneck operation, the best measure of profitability is the

a. number of units sold.

b. retail price multiplied by the number of units sold, less costs.

c. unit contribution margin per production bottleneck constraint.

d. None of these choices are correct.

 

23. A method that identifies and traces costs and expenses to activities and then to specific products is known as the

a. traced cost method.

b. traced activities method.

c. activity-based costing (ABC) method.

d. None of these concepts are correct.

 

24. The document that initiates changing a product or process is a(n)

a. modification request (MR).

b. product/process change request.

c. engineering change order (ECO).

d. None of these choices are correct.

 

25. A measure of physical activity for each activity is called a(n)

a. activity base.

b. process base.

c. production base.

d. None of these choices are correct.