StratCost PAAs

10/15/21, 9:49 AM PAA 4: Activity Based Costing_ D: Attempt review
Started on Sunday, 5 September 2021, 9:38 PM
State Finished
Completed on Sunday, 5 September 2021, 10:55 PM
Time taken 1 hour 16 mins
Grade 44.00 out of 50.00 (88%)
Question 1
Correct Mark 1.00 out of 1.00
An objective of activity-based management is to
a.
Eliminate the majority of centralized activities in an organization.
b. Reduce or eliminate non-value-added activities incurred to make a product or provide a service.
c.
Institute responsibility accounting systems in decentralized organizations.
d. all of the choices are correct
The correct answer is:
Reduce or eliminate non-value-added activities incurred to make a product or provide a service.
https://daigler20.addu.edu.ph/mod/quiz/review.php?attempt=236033&cmid=187289&showall=1 1/25
Question 2 HALLOWELL COMPANY
a. $9,129
b. $11,618
c. $6,086
d. $3,961
$6,086
Question 3
Overhead allocation based solely on a measure of volume such as direct labor-hours is a key aspect of the
activity-based costing model.
Select one:
True
False
The correct answer is 'False'.
Question 4
Suppose that the company decides that the present activity-based costing system is too complex and that all
costs (except for the costs of purchased decorations) should be allocated on the basis of the number of
guests. In that event, what would you expect to happen to the costs of cakes?
a. The costs of all cakes would go down.
b. The cost of cakes for receptions with more than the average number of guests would go down.
c. The costs of all cakes would go up.
d. The cost of cakes for receptions with fewer than the average number of guests would go down.

The cost of cakes for receptions with fewer than the average number of guests would go down.
Question 5
Testing a prototype of a new product is an example of a product level activity.

Select one:
True
False
The correct answer is 'True'.
Question 6
Products S5 and CP8 each are assigned $50.00 in support costs by a traditional costing system. An activity
analysis revealed that although production requirements are identical, S5 requires 45 minutes less setup time
than CP8. According to an ABC system, CP8 is under the traditional system.
a. undercosted
b. overcosted
c. fairly costed
d. accurately costed

undercosted
Question 7 GILMORE COMPANY
Answer: 925
The correct answer is: 925
Question 8 ANASTASIA COMPANY
a. $9.70
b. $1.50
c. $6.00
d. $3.00

$9.70
Question 9
The first-stage allocation in activity-based costing is the process by which overhead costs are assigned to
products before they are assigned to customers.
Select one:
True
False
Question 10 DAGGER CORPORATION

DA
Answer: 66,000
The correct answer is: 66,000
Question 11
An activity-based costing system is generally easier to set up and run than a traditional cost system.
Select one:
True
False
Question 12 ERNSTING PRINTERS
a. Wealth Managers is grossly underbilled for the job, while other jobs will be unfairly overbilled.
b. Wealth Managers will likely seek to do business with competitors.
c. Ernsting Printers will want to retain this highly-profitable customer.
d. Wealth Managers is unfairly overbilled for its use of printing resources.
Wealth Managers is grossly underbilled for the job, while other jobs will be unfairly overbilled.
Question 13
Activity-based costing uses a number of activity cost pools, each of which is allocated to products on the basis
of direct labor-hours.
Select one:
True
False
Question 14
Purchase order processing is an example of a product level activity.

Select one:
True
False
Question 15
It is usually difficult to find good cause-and-effect relationships between and a cost allocation
base.
a. batch-level costs
b.
product-sustaining costs
c. facility-sustaining costs
d. unit-level costs
facility-sustaining costs
Question 16 HALLOWELL COMPANY
Incorrect Mark 0.00 out of 1.00
a.
$9,129
b. $6,639
c. $15,649
d. $14,296

$15,649
Question 17 ANDRACKI HOUSECLEANING
Answer: 4,050.66
The correct answer is: 409.34
Question 18
Activity-based management (ABM) includes decisions about all of the following EXCEPT:
a. smoothing costs
b. pricing and product mix
c. improving processes
d. reducing costs

smoothing costs
Question 19 STEEL CORPORATION
a. $4.44 per machine-hour
b. $7.44 per machine-hour
c. $1.24 per machine-hour

d. $3.72 per machine-hour

$4.44 per machine-hour
Question 20 CANNADY
Cannady produces six products. SR6 costs $168.00 per unit under their traditional cost system using one cost
driver. An analysis of the activities and their costs revealed that three cost drivers would be used under the new
ABC system. The new cost of SR6 was determined to be $178.00 per unit.The total amount of support costs
assigned to product SR6 using the traditional method is the total amount assigned using ABC.
a. more than
b. indeterminate from
c. identical to
d. less than

less than
Question 21
In activity-based costing, as in traditional costing systems, nonmanufacturing costs are not assigned to
products.
Select one:
True
False
Question 22 SHAFT CORPORATION
Answer: 24,550
Question 23
When combining activities in an activity-based costing system, activities should be grouped together at the
same level. For example, batch-level activities should not be combined with unit-level activities.
Select one:
True
False
Question 24
Unit-level cost drivers in traditional cost systems distort product costs because they:
a.
do not consistently record costs
b.
recognize specific activities that are required to produce a product
c. fail to measure the correct amount of total costs for all products
d. assume that all support activities affect all products
assume that all support activities affect all products
Question 25 CANNADY
Cannady produces six products. SR6 costs $168.00 per unit under their traditional cost system using one cost
driver. An analysis of the activities and their costs revealed that three cost drivers would be used under the new
ABC system. The new cost of SR6 was determined to be $178.00 per unit. Given this change in the cost:
a. SR6’s costing results under the new system depend on the adequacy and quality of the estimated cost drivers and costs used
by the system.
b. SR6 will now command a higher sales price.
c. SR6 is definitely more accurately costed.
d. SR6 has benefited from the new system.

SR6’s costing results under the new system depend on the adequacy and quality of the estimated cost drivers and costs used by the system.
Question 26 MERRIMAN COMPANY
Answer: 80,000
Question 27
Which of the following factors would suggest a need to switch to activity-based costing?
a. Product lines similar in volume and manufacturing complexity.
b. Overhead costs constitute a significant portion of total costs.
c. Production managers use data provided by the existing system.

d. The manufacturing process has been stable.

Overhead costs constitute a significant portion of total costs.
Question 28
Changing a cost accounting system is likely to meet with little resistance in an organization since it is a
technical matter of little interest to individuals outside of the accounting department.
Select one:
True
False
Question 29
Smaller cost distortions occur when the traditional systems’ unit-level assignments and the alternative activity
cost driver assignments:
a. use the same cost driver units
b. are different in proportion to each other
c.
are similar in proportion to each other
d.
are more different than alike
are similar in proportion to each other
Question 30 THEODORE CORPORATION
a.
$9,223.20
b. $7,853.60
c. $5,401.60
d. $22,950.00

$5,401.60
Question 31
Unit-level production activities are performed each time a unit is made.

Select one:
True
False
Question 32
Duration drivers ordinarily require more effort to record than transaction drivers.
Select one:
True
False
Question 33 SWEET TEMPTATION
a. $18.55
b. $204.63
c. $59.66
d.
$247.60

$204.63
Question 34
Specialized engineering drawings, quality specifications and testing, inventoried materials, and material control
systems are examples of activities that equate to greater support costs.
Select one:
True
False
Question 35 ANDRACKI HOUSECLEANING
Answer: 1,641.20
The correct answer is: 1,513.32
Question 36 VIXEN CORPORATION
a. $29.07 per unit
b. $90.81 per unit
c. $79.66 per unit
d. $75.70 per unit

$90.81 per unit
Question 37 VEITON CORPORATION
a.
$124 per product design hour
b. $55 per product design hour
c. $1,526,916 per product design hour
d. $181 per product design hour

$181 per product design hour
Question 38
In activity-based costing, a plantwide overhead rate is used to apply overhead to products.

Select one:
True
False
Question 39 SHAFT CORPORATION
Answer: 79,330
Question 40 ALASKAN CORPORATION
a. $4,651.80
b. $1,688.10
c. $3,956.10
d. $17,934.00

$1,688.10
Question 41
Simply because activity-based costing systems employ more activity cost drivers, they provide more accurate
product costs than traditional systems.
Select one:
True
False
Question 42 HUGHES COMPANY
Answer: 21
The correct answer is: 62
Question 43 LUPIN CORPORATION
a. $1,350 per order
b. $1,680 per order
c. $1,190 per order
d. $1,050 per order

$1,350 per order
Question 44 PABLOS CORPORATION
a.
$5,523.58
b. $87,070.14
c. $115.02
d. $7,212.38

$7,212.38
Question 45 SWEET TEMPTATION
a.
$106.76
b. $139.16
c. $79.50
d. $378.58

$79.50
Question 46
In activity-based costing, organization-sustaining costs should not be included in product costs for internal
management reports that are used for decision-making. However, companies frequently include organization-
sustaining costs in product costs to satisfy external reporting requirements.
Select one:
True
False
Question 47
If a company switches from a traditional costing system to an activity-based costing system in which some
activities are batch-level and product-level, costs ordinarily shift from high-volume to low-volume products.
Select one:
True
False
Question 48 ARGENT CORPORATION
a. $215,000
b. $272,333
c. $430,000
d.
$314,000
$314,000
Question 49 WESLEYAN UNIVERSITY HOSPITAL
Answer: 4,515
Question 50
An action analysis report reconciles activity-based costing product costs with traditional product costs based
on direct labor.
Select one:
True
False
Finish review
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10/15/21, 9:49 AM PAA 4: Activity Based Costing_ D: Attempt review

Started on Sunday, 5 September 2021, 9:38 PM

Completed on Sunday, 5 September 2021, 10:55 PM

Time taken 1 hour 16 mins

Grade 44.00 out of 50.00 (88%)

Correct Mark 1.00 out of 1.00

An objective of activity-based management is to

b. Reduce or eliminate non-value-added activities incurred to make a product or provide a service.

d. all of the choices are correct

The correct answer is:

Reduce or eliminate non-value-added activities incurred to make a product or provide a service.

Question 2 HALLOWELL COMPANY

Correct Mark 1.00 out of 1.00

The correct answer is:

Correct Mark 1.00 out of 1.00

The correct answer is 'False'.

Correct Mark 1.00 out of 1.00

a. The costs of all cakes would go down.

c. The costs of all cakes would go up.

The correct answer is:

Correct Mark 1.00 out of 1.00

Testing a prototype of a new product is an example of a product level activity.

The correct answer is 'True'.

Correct Mark 1.00 out of 1.00

The correct answer is:

Question 7 GILMORE COMPANY

Correct Mark 1.00 out of 1.00

The correct answer is: 925

Question 8 ANASTASIA COMPANY

Correct Mark 1.00 out of 1.00

The correct answer is:

Correct Mark 1.00 out of 1.00

The correct answer is 'False'.

Question 10 DAGGER CORPORATION

The correct answer is: 66,000

Correct Mark 1.00 out of 1.00

The correct answer is 'False'.

Question 12 ERNSTING PRINTERS

Correct Mark 1.00 out of 1.00

b. Wealth Managers will likely seek to do business with competitors.

c. Ernsting Printers will want to retain this highly-profitable customer.

d. Wealth Managers is unfairly overbilled for its use of printing resources.

The correct answer is:

Correct Mark 1.00 out of 1.00

The correct answer is 'False'.

Correct Mark 1.00 out of 1.00

Purchase order processing is an example of a product level activity.

The correct answer is 'False'.

Correct Mark 1.00 out of 1.00

The correct answer is:

Question 16 HALLOWELL COMPANY

Incorrect Mark 0.00 out of 1.00

The correct answer is:

Question 17 ANDRACKI HOUSECLEANING

Incorrect Mark 0.00 out of 1.00

The correct answer is: 409.34

Correct Mark 1.00 out of 1.00

b. pricing and product mix

The correct answer is:

Question 19 STEEL CORPORATION

Correct Mark 1.00 out of 1.00

a. $4.44 per machine-hour

b. $7.44 per machine-hour