Question 1

Determining costs of activity pools requires assigning costs accumulated in various account classifications to each of the activity cost pools.This is referred to as ________.

Accepted Answer

First-stage allocation involves assigning costs from various account classifications (such as direct labor, direct materials, and overhead) to activity cost pools. Second-stage allocation then involves assigning costs from the activity cost pools to specific cost objects (such as products, services, or customers). Third, fourth, and fifth stage allocation do not typically occur in activity-based costing.

Question 2

Refined costing systems reduce the use of broad averages for assigning the cost of resources to cost objects.

Accepted Answer

The use of broad averages fails to capture differences in demand and leads to distorted and inaccurate cost information.Refined costing systems enhance the assignment of resources to cost objects.

Question 3

Which of the following is not a reason why managers see an accelerated need for refinement?

Accepted Answer

Decreases in indirect costs would not necessarily create an accelerated need for refinement. The other options, such as growing demand and competition, increases in direct costs, product diversity, and the need for accurate cost information, all contribute to the need for managers to refine their processes and strategies.

Question 4

The three main guidelines that managers use to refine costing systems are direct-cost tracing,indirect-cost pools,and cost-allocation bases.

Accepted Answer

These three guidelines are indeed used by managers to refine costing systems. Direct-cost tracing involves direct measurement of the costs associated with a particular product or service. Indirect-cost pools involve grouping together costs that cannot be directly traced to a specific product or service. Finally, cost-allocation bases are used to allocate indirect costs among the various products or services offered by the company.

Question 5

What are the strategic consequences of product undercosting and overcosting?

Accepted Answer

The answer of What are the strategic consequences of product...

Question 6

The costing system that reduces the use of broad averages for assigning the cost of resources to cost objects is the ________.

Accepted Answer

The refined-costing system reduces the use of broad averages for assigning the cost of resources to cost objects by providing more accurate cost allocations, often through the use of activity-based costing or other more precise methods.

Question 7

Setup costs never depreciation and maintenance costs of setup equipment,wages of setup workers,and allocated salaries of design engineers,process engineers,and supervisors.

Accepted Answer

Setup costs do include depreciation and maintenance costs of setup equipment,wages of setup workers,and allocated salaries of design engineers,process engineers,and supervisors.

Question 8

The growing demand for customized products,which has led managers to ________ the variety of products and services their companies offer.

Accepted Answer

The sentence talks about the growing demand for customized products, which means customers are looking for products that are unique to their needs. To meet this demand, managers will have to increase the variety of products and services their companies offer. Therefore, option D, increase, is the best choice. The other options, such as reduce, decrease, and eliminate, are contradictory to the sentence's idea. Option A, vary, could be a possible choice, but it is not as accurate as option D.

Question 9

Mug King reported the following information:

Required:
Compute the number of batches for small and large mugs,the total setup-hours,and the total setup-hours for both mugs.

Accepted Answer

A)
 11ea7c93_bf0d_7b8a_9d3f_91c8055fd030_TB3439_00 Number of batches small mugs [(50,000 / 240)] = 208.33
Number of batches large mugs [(25,000 / 75)] = 333.33
Total setup-hours small mugs [(208.33 × 3)] = 624.99
Total setup-hours large mugs [(333.33 × 50] = 1,666.65

Question 10

What are the three main guidelines that managers use when the refine their costing system?

Accepted Answer

The answer of What are the three main guidelines that...

Question 11

What should managerial accountants understand when prices of their products and services are determined by the market based on competition among companies in the marketplace?

Accepted Answer

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Question 12

The costing system that refines a costing system by identifying individual activities as the fundamental cost object is ________.

Accepted Answer

The system that refines a costing system by identifying individual activities as the fundamental cost object is called Activity-Based Costing System. This system allocates indirect costs to products or services based on the activities involved in producing them, providing a more accurate and detailed understanding of the cost structure.

Question 13

Advances in information technology have no impact on the implementation of refined costing systems.

Accepted Answer

The advances in information technology facilitate the implementation of refined costing systems.Costing-system refinements require more data gathering and additional analysis,and improvements in information technology have drastically reduced the costs to gather,validate,store,and analyze information.

Question 14

When managers structure activity cost pools more finely with cost drivers for each activity cost pool as the cost-allocation base,it leads to more accurate costing of activities.

Accepted Answer

By identifying specific cost drivers for each activity cost pool, managers can more accurately allocate costs to the products or services that use those activities. This can lead to more precise costing of activities and ultimately, better decision-making.

Question 15

Manufacturing Mates produces special-order tiles for organizations.The company reported that they produced 250 batches of tile and the setup time per batch was 2 hours.Compute the total setup hours.

Accepted Answer

C)[(250 × 2)] = 500 total setup hours

Question 16

Beaver's Molding Corporation produces a quantity of 50,000 molds for contractors.The workers produce 220 molds per batch.Compute the total number of batches produced.

Accepted Answer

D)[(50,000 / 220)] = 227.27 batches produced

Question 17

Costing-system refinements require more data gathering and more analysis,and improvements in information technology have drastically reduced the costs to gather,validate,store,and analyze vast quantities of data.

Accepted Answer

The statement is true, as advancements in information technology have made it easier and cheaper to gather and analyze large amounts of data, which is necessary for refining costing systems.

Question 18

We define second-stage allocation as ________.

Accepted Answer

Second-stage allocation refers to the process of assigning the costs of activity cost pools to individual products or services. This is typically done using a cost driver, such as machine hours or labor hours, to determine how much of the cost pool each product or service should be allocated. This helps organizations to better understand the true cost of production for each item they produce, and to make more informed decisions about pricing and profitability.

Question 19

How do managers refine costing systems? What is their goal when they chose to refine costing systems?

Accepted Answer

The answer of How do managers refine costing systems? What...

Question 20

Why do managers refine costing systems?

Accepted Answer

The answer of Why do managers refine costing systems?...

Quiz 6: Activity-Based Costing and Activity-Based Management