Cost Accounting Systems(B. Activity-Based Cost System)
B. ACTIVITY-BASED COST SYSTEMTHEORIES:Outdated cost system
3.Symptoms of an outdated cost system include all of the followingEXCEPA.product costs change because of changes in financial reporting.B.products that are difficult to produce show little profit.C.competitors' prices appear unrealistically low.D.the company has a highly profitable niche all to itself.13.Which of the following is NOT a sign of poor cost data?A.Competitors' prices for high-volume products appear much toohigh.B.The company seems to have a highly profitable niche all toitself.C.Customers don't balk at price increases for low-volume products.D.Competitors' prices for low-volume products appear much toohigh.
1.Which system focuses on the management of activities with theobjective of improving the value received by the customer and theprofit received by providing this value?A.activity-based managementC.contemporary cost controlB.traditional cost management systemD.standard costsystem28.Activity-based management (ABM) isA.a costing system in which multiple overhead cost pools areallocated using bases that include one or more nonvolumerelated factorsB.a base used to allocate the cost of a resource to the differentactivities using itC.the use of information obtained from ABC to makeimprovements in the firmD.a base used to allocate the cost of an activity to products andcustomers17.An objective of activity-based management is toA.eliminate the majority of centralized activities in anorganization.B.reduce or eliminate non-value-added activities incurred to makea product or provide a service.C.institute responsibility accounting systems in decentralizedorganizations.D.all of the above5.Primary concepts under activity-based management include all of the following except:A.activity analysisC.activity-based costingB.total quality managementD.cost driver analysis18.Which of the following falls under the Activity-Based Managementumbrella?ContinuousimprovementBusinessprocessreengineeringActivity-basedcostingA.NONOYESB.YESNONOC.YESYESYESD.NOYESNO29.All of the following are ways that activities can be managed toachieve improvements in a process, exceptA.activity inductionC.activity eliminationB.activity selectionD.activity sharing
Traditional Costing vs. ABC system
27.Which of the following is not a distinction between the traditionaland ABC costing systemsA.the number of overhead cost pools tends to be higher in ABC