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19 x12 ABC B

19 x12 ABC B

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Published by 'Jemuel Vales

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Published by: 'Jemuel Vales on Feb 18, 2011
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07/16/2014

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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B. ACTIVITY-BASED COST SYSTEMTHEORIES:Outdated cost system
3.Symptoms of an outdated cost system include all of the followingEXCEPA.product costs change because of changes in financial reporting.B.products that are difficult to produce show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.
Activity-based management
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
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Cost Accounting Systems(B. Activity-Based Cost System)
systemsB.the number allocation bases tend to be higher in ABC systemC.costs within an ABC cost pool tend to be more homogeneousthan the costs within a traditional system’s cost poolD.all ABC systems are one-stage costing systems, while traditionalsystems may be one- or two-stage32.In contrast to a company that uses a single overhead rate, one thatuses activity-based costingA.will have higher product costs than one using a single overheadrate.B.cannot compute budget variances.C.will incur additional costs for recordkeeping.D.must have a preponderance of fixed overhead costs.
Activity-based costing
Reason21.Of the following, which is the best reason for using activity-basedcosting?A.to keep better track of overhead costsB.to more accurately assign overhead costs to cost pools so thatthese costs are better controlledC.to better assign overhead costs to productsD.to assign indirect service overhead costs to direct overhead costpoolsBenefits2.The primary benefit of using ABC is that it providesA.better management decisions.B.enhanced control over overhead costs.C.more cost pools.D.more accurate product costing.10.Which of the following is not a benefit of activity-based costing?A.More accurate product costing.B.Enhanced control over overhead costs.C.Less costly to use.D.Better management decisions.Factors suggesting need to switch to ABC4.Which of the following factors would suggest a need to switch toactivity-based costing?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.7.A least likely reason to use activity-based overhead rates is thatA.some departments are labor-intensive, some are machine-intensive.B.significant amounts of overhead are driven by different factors.C.rates calculated for some departments are much higher than forother departments.D.all jobs require about the same amounts of cost-drivingactivities.8.The presence of any of the following factors would suggest a switchto ABC except whenA.product line differ greatly in volume.B.overhead costs constitute a minor portion of total costs.C.the manufacturing process has changed significantly.D.production managers are ignoring data provided by the existingsystem.Characteristics6.Which of the following is typical of activity-based costing systems?A.Use of a single predetermined overhead rate.B.Use of direct labor hours or direct labor cost to assignoverhead.C.Assumption of correlation between direct labor and incurrenceof overhead cost.D.Use of multiple cost drivers to allocate overhead.14.All of the following statements are correct except that
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Cost Accounting Systems(B. Activity-Based Cost System)
A.activity-based costing has been widely adopted in serviceindustries.B.the objective of installing ABC in service firms is different than itis in a manufacturing firm.C.a larger proportion of overhead costs are company-wide costs inservice industries.D.the general approach to identifying activities and activity costpools is the same in a service company as in a manufacturingcompany.Application22.ABC should be used in which of the following situations?A.single-product firms with multiple stepsB.multiple-product firms with only a single processC.multiple-product firms with multiple processing stepsD.in all manufacturing firmsLimitation9.Which of the following is a limitation of activity-based costing?A.More cost poolsC.Poorer management decisionsB.Less control over overhead costsD.Some arbitraryallocations continue12.Each of the following is a limitation of activity-based costing systemexcept that:A.it can be expensive to use.B.it is more complex than the traditional costing.C.more cost pools are used.D.some arbitrary allocations still continue.Cost behavior of high-volume & low-volume product11.As compared to a high-volume product, a low-volume productA.usually requires less special handling.B.is usually responsible for more overhead costs per unit.C.requires relatively fewer machine setups.D.requires use of direct labor hours as the primary cost driver toensure proper allocation of overhead.Cost assignment15.Which of the following lists the most to least accurate method of cost assignment?A.direct tracing, driver tracing, allocationC.driver tracing,direct tracing, allocationB.allocation, direct tracing, driver tracingD.allocation, drivertracing, direct tracing30.An activity-based costing system uses which of the followingprocedures?A.Overhead costs are traced to departments, then costs aretraced to products.B.Overhead costs are traced to activities, then costs are traced toproducts.C.Overhead costs are traced directly to products.D.All overhead costs are expensed as incurred.Steps16.A well-designed activity-based costing system starts withA.identifying the activity-cost pools.B.computing the activity-based overhead rate.C.assigning manufacturing overhead costs for each activity costpool to products.D.analyzing the activities performed to manufacture a product.25.The first step in activity-based costing is toA.assign manufacturing overhead costs for each activity cost poolto products.B.compute the activity-based overhead rate per cost driver.C.identify and classify the major activities involved in themanufacture of specific products.D.identify the cost driver that has a strong correlation to theactivity cost pool.26.The last step in activity-based costing is toA.identify the major activities that pertain to the manufacture of 
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