Question 1

Match between columns
                        Premises: Engineering design
Machine repair
Inventory storage
Machining
Assembly
Painting
Inspections
Packaging

Accepted Answer

The Answer of value-adding and non-value-adding is...

Question 2

Delany Company uses a traditional costing system. Management is considering switching to an activity-based costing system. What steps must Delany take in initiating an activity-based costing system?

Accepted Answer

Delany Company must first identify the m...

Question 3

An activity that has a direct cause-effect relationship with the resources consumed is a(n)

Accepted Answer

A)   cost driver.
B)   overhead rate.
C)   cost pool.
D)   product activity.E) All of the above
F) A) and C)

Question 4

Activity-based costing is used by

Accepted Answer

A)   accounting firms.
B)   law firms.
C)   consulting firms.
D)   all of the above.E) All of the above
F) C) and D) D

Question 5

ABC leads to enhanced control over overhead costs.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is not a facility-level activity?

Accepted Answer

A)   Plant management
B)   Product design
C)   Personnel administration
D)   TrainingE) None of the above
F) B) and C)

Question 7

Boswell Company manufactures two products, Regular and Supreme. Boswell's overhead costs consist of machining, $3,000,000; and assembling, $1,500,000. Information on the two products is:  Overhead applied to Supreme using activity-based costing is

Accepted Answer

A)   $1,290,000.
B)   $1,800,000.
C)   $2,700,000.
D)   $3,210,000.E) All of the above
F) C) and D)

Question 8

A well-designed activity-based costing system starts with

Accepted Answer

A)   identifying the activity-cost pools.
B)   computing the activity-based overhead rate.
C)   assigning overhead costs to products.
D)   analyzing the activities performed to manufacture a product.E) None of the above
F) B) and C)

Question 9

Which of the following is true of activity-based costing?

Accepted Answer

A)   More cost pools
B)   Same base as traditional costing
C)   Less costly to use
D)   Eliminates arbitrary allocationsE) A) and D)
F) A) and C)

Question 10

A list of possible cost drivers is presented below:  
Instructions
For each of the following activity cost pools, select the most appropriate cost driver:

Accepted Answer

1. B 4. A
2. F 5. C
3. E 6. D

Question 11

The use of activity-based costing in service industries

Accepted Answer

A)   has the same objective as in manufacturing.
B)   results in improved costing of services provided.
C)   uses cost pools to assign overhead.
D)   all of these.E) B) and D)
F) A) and B) C

Question 12

A cost driver does not generally have a direct cause-effect relationship with the resources consumed.

Accepted Answer

A) True 
 B)False

Question 13

Current trends in manufacturing include less direct labor and more overhead.

Accepted Answer

A) True 
 B)False

Question 14

Ben Gordon, Inc. manufactures 2 products, wheels and seats. The company has estimated its overhead in the assembling department to be $660,000. The company produces 300,000 wheels and 600,000 seats each year. Each wheel uses 2 parts, and each seat uses 3 parts. How much of the assembly overhead should be allocated to wheels?

Accepted Answer

A)   $165,000.
B)   $220,000.
C)   $264,000
D)   $282,856.E) A) and B)
F) All of the above

Question 15

Activity-based costing

Accepted Answer

A)   allocates overhead to activity cost pools, and it then assigns the activity cost pools to products and services by means of cost drivers.
B)   accumulates overhead in one cost pool, then assigns the overhead to products and services by means of a cost driver.
C)   assigns activity cost pools to products and services, then allocates overhead back to the activity cost pools.
D)   allocates overhead directly to products and services based on activity levels.E) C) and D)
F) B) and C)

Question 16

One of Stine Company's activity cost pools is machine setups, with estimated overhead of $360,000. Stine produces sparklers (400 setups)  and lighters (600 setups) . How much of the machine setup cost pool should be assigned to sparklers?

Accepted Answer

A)   $360,000
B)   $144,000
C)   $180,000
D)   $216,000E) A) and D)
F) None of the above

Question 17

Which of the following is not a product-level activity?

Accepted Answer

A)   Product design
B)   Engineering changes
C)   Material handling
D)   Inventory managementE) B) and D)
F) C) and D)

Question 18

Which of the following factors would suggest a switch to activity-based costing?

Accepted Answer

A)   Product lines similar in volume and manufacturing complexity.
B)   Overhead costs constitute a significant portion of total costs.
C)   The manufacturing process has been stable.
D)   Production managers use data provided by the existing system.E) All of the above
F) A) and B)

Question 19

Boswell Company manufactures two products, Regular and Supreme. Boswell's overhead costs consist of machining, $3,000,000; and assembling, $1,500,000. Information on the two products is:  Overhead applied to Supreme using traditional costing using direct labor hours is

Accepted Answer

A)   $1,290,000.
B)   $1,800,000.
C)   $2,700,000.
D)   $3,210,000.E) A) and D)
F) B) and C)

Question 20

To use activity-based costing, it is necessary to know the

Accepted Answer

A)   cost driver for each activity cost pool.
B)   expected use of cost drivers per activity.
C)   expected use of cost drivers per product.
D)   all of the above.E) B) and C)
F) All of the above

Exam 17: Activity-Based Costing

Label the following costs as:

Delany Company uses a traditional costing system. Management is considering switching to an activity-based costing system. What steps must Delany take in initiating an activity-based costing system?

Correct Answer
verified
Delany Company must first identify the m...
View Answer

An activity that has a direct cause-effect relationship with the resources consumed is a(n)

Correct Answer
verified

Activity-based costing is used by

Correct Answer
verified
D

ABC leads to enhanced control over overhead costs.

Correct Answer
verified

Which of the following is not a facility-level activity?

Correct Answer
verified

Boswell Company manufactures two products, Regular and Supreme. Boswell's overhead costs consist of machining, $3,000,000; and assembling, $1,500,000. Information on the two products is: Overhead applied to Supreme using activity-based costing is

Correct Answer
verified

A well-designed activity-based costing system starts with

Correct Answer
verified

Which of the following is true of activity-based costing?

Correct Answer
verified

A list of possible cost drivers is presented below: Instructions For each of the following activity cost pools, select the most appropriate cost driver:

Correct Answer
verified
1. B 4. A 2. F 5. C 3. E 6. D

The use of activity-based costing in service industries

Correct Answer
verified
C

A cost driver does not generally have a direct cause-effect relationship with the resources consumed.

Correct Answer
verified

Current trends in manufacturing include less direct labor and more overhead.

Correct Answer
verified

Correct Answer
verified

Activity-based costing

Correct Answer
verified

One of Stine Company's activity cost pools is machine setups, with estimated overhead of $360,000. Stine produces sparklers (400 setups) and lighters (600 setups) . How much of the machine setup cost pool should be assigned to sparklers?

Correct Answer
verified

Which of the following is not a product-level activity?

Correct Answer
verified

Which of the following factors would suggest a switch to activity-based costing?

Correct Answer
verified

Boswell Company manufactures two products, Regular and Supreme. Boswell's overhead costs consist of machining, $3,000,000; and assembling, $1,500,000. Information on the two products is: Overhead applied to Supreme using traditional costing using direct labor hours is

Correct Answer
verified

To use activity-based costing, it is necessary to know the

Correct Answer
verified

Exam 17: Activity-Based Costing

Label the following costs as:

Delany Company uses a traditional costing system. Management is considering switching to an activity-based costing system. What steps must Delany take in initiating an activity-based costing system?

Correct AnswerverifiedDelany Company must first identify the m...View AnswerShow Answer

An activity that has a direct cause-effect relationship with the resources consumed is a(n)

Correct AnswerverifiedShow Answer

Activity-based costing is used by

Correct AnswerverifiedD

ABC leads to enhanced control over overhead costs.

Correct AnswerverifiedShow Answer

Which of the following is not a facility-level activity?

Correct AnswerverifiedShow Answer

Boswell Company manufactures two products, Regular and Supreme. Boswell's overhead costs consist of machining, $3,000,000; and assembling, $1,500,000. Information on the two products is: Overhead applied to Supreme using activity-based costing is

Correct AnswerverifiedShow Answer

A well-designed activity-based costing system starts with

Correct AnswerverifiedShow Answer

Which of the following is true of activity-based costing?

Correct AnswerverifiedShow Answer

A list of possible cost drivers is presented below: Instructions For each of the following activity cost pools, select the most appropriate cost driver:

Correct Answerverified1. B 4. A 2. F 5. C 3. E 6. D

The use of activity-based costing in service industries

Correct AnswerverifiedC

A cost driver does not generally have a direct cause-effect relationship with the resources consumed.

Correct AnswerverifiedShow Answer

Current trends in manufacturing include less direct labor and more overhead.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Activity-based costing

Correct AnswerverifiedShow Answer

One of Stine Company's activity cost pools is machine setups, with estimated overhead of $360,000. Stine produces sparklers (400 setups) and lighters (600 setups) . How much of the machine setup cost pool should be assigned to sparklers?

Correct AnswerverifiedShow Answer

Which of the following is not a product-level activity?

Correct AnswerverifiedShow Answer

Which of the following factors would suggest a switch to activity-based costing?

Correct AnswerverifiedShow Answer

Boswell Company manufactures two products, Regular and Supreme. Boswell's overhead costs consist of machining, $3,000,000; and assembling, $1,500,000. Information on the two products is: Overhead applied to Supreme using traditional costing using direct labor hours is

Correct AnswerverifiedShow Answer

To use activity-based costing, it is necessary to know the

Correct AnswerverifiedShow Answer

Correct Answer
verified
Delany Company must first identify the m...
View Answer

Correct Answer
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Correct Answer
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D

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1. B 4. A 2. F 5. C 3. E 6. D

Correct Answer
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C

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