Question 1

Jayson Woods, PSC is an architectural firm that uses activity-based costing. The three activity cost pools used by Jayson Woods are: Salaries and Wages, Travel Expense, and Plan Reproduction Expense. The firm has provided the following information concerning activity and costs:  
Instructions
Calculate the total cost to be allocated to the (a) Project Assignment, (b) Business Development, and (c) Other activity cost pools.

Accepted Answer

The answer of Jayson Woods, PSC is an architectural firm...

Question 2

When product lines differ greatly in volume and manufacturing complexity, a switch from traditional costing to ___________________ is indicated.

Accepted Answer

The answer of When product lines differ greatly in volume...

Question 3

Match the items in the two columns below by entering the appropriate code letter in the space provided.
A. Pull approach 
B. Cost driver 
C. Facility-level activity
D. Unit-level activity 
E. Activity-based costing 
F. Just-in-time processing
G. Batch-level activity
 H. Product-level activity
I. Non-value-added activity
J. Value-added activity
_____ 1. Allocates overhead to multiple activity cost pools, then assigns the activity cost pools to products.
_____ 2. An activity that has a direct cause-effect relationship with the resources consumed.
_____ 3. Increases the worth of a product or service to customers.
_____ 4. Should be eliminated or reduced.
_____ 5. Plant management.
_____ 6. Engineering changes.
_____ 7. Equipment setups.
_____ 8. Assembling.
_____ 9. Primary objective is to eliminate all manufacturing inventories.
_____ 10. Used to initiate manufacturing under JIT processing.

Accepted Answer

The answer of Match the items in the two columns...

Question 4

In activity-based costing, overhead costs are allocated to ____________________, then assigned to products.

Accepted Answer

The answer of In activity-based costing, overhead costs are allocated...

Question 5

Merando Manufacturing Company manufactures small tools. Classify each of the following activity costs of the tool company as either unit-level, batch-level, product-level, or facility-level:
1. Plant management
2. Drilling
3. Painting
4. Machine setups
5. Product design
6. Cutting
7. Inspection
8. Inventory management

Accepted Answer

The answer of Merando Manufacturing Company manufactures small tools. Classify...

Question 6

The primary benefit of activity-based costing is ___________________ product costing.

Accepted Answer

The answer of The primary benefit of activity-based costing is...

Question 7

A __________________ is any activity that has a direct cause-effect relationship with the resources consumed.

Accepted Answer

The answer of A __________________ is any activity that has...

Question 8

Some ______________________ increase the perceived worth of a product or service to customers.

Accepted Answer

The answer of Some ______________________ increase the perceived worth of...

Question 9

Parton and Sons is a law firm that uses activity-based costing. Classify these activities as value-added or non-value-added:
1. Taking appointments
2. Reception
3. Meeting with clients
4. Bookkeeping
5. Court time
6. Meeting with opposing attorneys
7. Billing
8. Advertising

Accepted Answer

The answer of Parton and Sons is a law firm...

Question 10

American Delights manufactures a wide variety of holiday and seasonal decorative items. American's activity-based costing overhead rates are:  
The Snow Man project involved three purchase orders, 4,000 square feet/days, 60 machine hours, and 40 direct labor hours. The cost of direct materials on the job was $19,000 and the direct labor rate is $30 per hour.
Instructions
Determine the total cost of the Snow Man project.

Accepted Answer

The answer of American Delights manufactures a wide variety of...

Question 11

The number of ___________________ is an appropriate cost driver for the ordering and receiving activity cost pool.

Accepted Answer

The answer of The number of ___________________ is an appropriate...

Question 12

In the hierarchy of activity levels, the four levels are __________, ___________, ____________, and _____________.

Accepted Answer

The answer of In the hierarchy of activity levels, the...

Question 13

Castleman, Inc. designs, prints, and delivers advertising copy for companies throughout the tri-state area. Sometimes this entails designing and printing a single copy and other times multiple copies of the same advertisement. Listed below are typical activity costs:
(a) Printer ink.
(b) Paper
(c) Depreciation on equipment
(d) Machine setup costs
(e) Designing
(f) Supervisory salaries
(g) Ordering materials
(h) Delivery
(i) Building insurance
(j) Printing
Instructions
Classify each of these activities as either unit-level, batch-level, product-level, or facility-level.

Accepted Answer

The answer of Castleman, Inc. designs, prints, and delivers advertising...

Question 14

Equipment setups are a ______________-level activity.

Accepted Answer

The answer of Equipment setups are a ______________-level activity....

Question 15

What are the conditions that would indicate to the management of a firm that they should switch from traditional costing to activity-based costing?

Accepted Answer

The answer of What are the conditions that would indicate...

Question 16

Label the following costs as value-adding (VA) or non-value-adding (NVA):
____ 1. Engineering design
____ 2. Machine repair
____ 3. Inventory storage
____ 4. Machining
____ 5. Assembly
____ 6. Painting
____ 7. Inspections
____ 8. Packaging

Accepted Answer

The answer of Label the following costs as value-adding (VA)...

Question 17

Feather, Inc. produces phasers (sales of 200,000 units per year) and force field enhancers (sales of 25,000 units per year). If Feather switches from traditional costing to activity-based costing, what is the likely effect on overhead assigned to the two products?

Accepted Answer

The answer of Feather, Inc. produces phasers (sales of 200,000...

Question 18

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

The answer of Delany Company uses a traditional costing system....

Question 19

In traditional costing systems, direct labor cost is often used for the assignment of all ____________________.

Accepted Answer

The answer of In traditional costing systems, direct labor cost...

Question 20

Match between columns
                        Premises: Allocates overhead to multiple activity cost pools, then assigns the activity cost pools to products.
An activity that has a direct cause-effect relationship with the resources consumed.
Increases the worth of a product or service to customers.
Should be eliminated or reduced.
Plant management.
Engineering changes.
Equipment setups.
Assembling.
Primary objective is to eliminate all manufacturing inventories.
Used to initiate manufacturing under JIT processing.

Accepted Answer

The Answer of Pull approach and Cost driver and Facility-level is...

Quiz 17: Activity-Based Costing

When product lines differ greatly in volume and manufacturing complexity, a switch from traditional costing to ___________________ is indicated.

In activity-based costing, overhead costs are allocated to ____________________, then assigned to products.

The primary benefit of activity-based costing is ___________________ product costing.

A __________________ is any activity that has a direct cause-effect relationship with the resources consumed.

Some ______________________ increase the perceived worth of a product or service to customers.

Parton and Sons is a law firm that uses activity-based costing. Classify these activities as value-added or non-value-added: 1. Taking appointments 2. Reception 3. Meeting with clients 4. Bookkeeping 5. Court time 6. Meeting with opposing attorneys 7. Billing 8. Advertising

The number of ___________________ is an appropriate cost driver for the ordering and receiving activity cost pool.

In the hierarchy of activity levels, the four levels are ____, _, , and _____.

Equipment setups are a ______________-level activity.

What are the conditions that would indicate to the management of a firm that they should switch from traditional costing to activity-based costing?

Label the following costs as value-adding (VA) or non-value-adding (NVA): 1. Engineering design 2. Machine repair 3. Inventory storage 4. Machining 5. Assembly 6. Painting 7. Inspections 8. Packaging

Feather, Inc. produces phasers (sales of 200,000 units per year) and force field enhancers (sales of 25,000 units per year). If Feather switches from traditional costing to activity-based costing, what is the likely effect on overhead assigned to the two products?

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?

In traditional costing systems, direct labor cost is often used for the assignment of all ____________________.

Match the items below.

Quiz 17: Activity-Based Costing

When product lines differ greatly in volume and manufacturing complexity, a switch from traditional costing to ___________________ is indicated.

In activity-based costing, overhead costs are allocated to ____________________, then assigned to products.

The primary benefit of activity-based costing is ___________________ product costing.

A __________________ is any activity that has a direct cause-effect relationship with the resources consumed.

Some ______________________ increase the perceived worth of a product or service to customers.

Parton and Sons is a law firm that uses activity-based costing. Classify these activities as value-added or non-value-added: 1. Taking appointments 2. Reception 3. Meeting with clients 4. Bookkeeping 5. Court time 6. Meeting with opposing attorneys 7. Billing 8. Advertising

The number of ___________________ is an appropriate cost driver for the ordering and receiving activity cost pool.

In the hierarchy of activity levels, the four levels are __________, ___________, ____________, and _____________.

Equipment setups are a ______________-level activity.

What are the conditions that would indicate to the management of a firm that they should switch from traditional costing to activity-based costing?

Label the following costs as value-adding (VA) or non-value-adding (NVA): ____ 1. Engineering design ____ 2. Machine repair ____ 3. Inventory storage ____ 4. Machining ____ 5. Assembly ____ 6. Painting ____ 7. Inspections ____ 8. Packaging

Feather, Inc. produces phasers (sales of 200,000 units per year) and force field enhancers (sales of 25,000 units per year). If Feather switches from traditional costing to activity-based costing, what is the likely effect on overhead assigned to the two products?

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?

In traditional costing systems, direct labor cost is often used for the assignment of all ____________________.

Match the items below.

In the hierarchy of activity levels, the four levels are ____, _, , and _____.

Label the following costs as value-adding (VA) or non-value-adding (NVA): 1. Engineering design 2. Machine repair 3. Inventory storage 4. Machining 5. Assembly 6. Painting 7. Inspections 8. Packaging