管理会计示范性双语课件习题

CHAPTER4

ACTIVITY-BASEDCOSTMANAGEMENTSYSTEMS

TRUE/FALSE

1.Simplybecauseactivity-basedcostingsystemsemploymoreactivitycostdrivers,theyprovidemoreaccurateproductcoststhantraditionalsystems.

a.True

b.False

2.Atop-sellingproductmightactuallyresultinlossesforthecompany.

a.True

b.False

3.Traditionalsystemsarelikelytoundercostcomplexproductswithlowerproductionvolume.

a.True

b.False

4.Usingmultipleunit-levelcostdriversgenerallyconstitutesaneffectiveactivity-basedcostsystem.

a.True

b.False

5.TheCooperPenCompanycaseinthetextprovidesanillustrationofwhyfactoriesproducingamorevariedmixofproductshavehighercoststhanfactoriesproducingonlyanarrowrangeofproducts.

a.True

b.False

6.Productlinesthatproducedifferentvariations(models,styles,orcolors)oftenrequirespecializedactivitiesthattranslateintolowersupportcostsforeachproductline.

a.True

b.False

7.Specializedengineeringdrawings,qualityspecificationsandtesting,inventoriedmaterials,andmaterialcontrolsystemsareexamplesofactivitiesthatequatetogreatersupportcosts.

a.True

b.False

8.Foractivity-basedcostsystems,activitycostsareassignedtoproductsintheproportionofthedemandtheyplaceonactivityresources.

a.True

b.False

9.Anactivity-basedcostingsystemisnecessaryforcostingservicesthataresimilar.

a.True

b.False

10.ABCsystemsseekacostallocationbasethathasacause-and-effectrelationshipwithcostsinthecostpool.

a.True

b.False

11.Ingeneral,theselectionofactivitycostdriversrequiresmakingtrade-offsbetweenaccuracyandthecostofmeasurement.

a.True

b.False

12.Theselectionofactivitycostdriversrequiresmakingchoicesrelatedtotheusageoftransactiondrivers,durationdrivers,andintensitydrivers.

a.True

b.False

13.Reducingthenumberofproductionrunsprovidesaneconomicbenefiteventhoughresourcesremainatthesamelevel.

a.True

b.False

14.Aneasywaytoimplementaneffectiveactivity-basedcostingsystemistobuyaprepackagedABCsoftwarepackage.

a.True

b.False

15.Activity-basedcostinghelpstoidentifyvariousactivitiesthatexplainwhycostsareincurred.

a.True

b.False

16.ABCrevealsopportunitiesforimprovingthewayworkisdone.

a.True

b.False

17.Usingactualdriverquantitiesratherthanpracticalcapacitytoassignproductcostscanleadtoimprovementsinproductcosts.

a.True

b.False

18.Practicalcapacityisusedasthedenominatorforactivitydrivercalculationstoavoiddistortionscausedbytheassignmentofexcesscapacitycoststotheproducts.

a.True

b.False

19.Unusedcapacityshouldbetreatedasageneralcosttobesharedacrossallproductlines.

a.True

b.False

20.Costdriverratescalculatedusingactualworkperformedincludeanallocationforthecostofresourcesusedandforunusedcapacity.

a.True

b.False

21.Assigningsellinganddistributioncoststoproductlinesisbecomingmoreimportantbecauseofcustomerrequestsforcustomizedservices.

a.True

b.False

22.Thecostsofmarketing,selling,anddistributionexpenseshavebeendecreasingrapidlyinrecentyears.

a.True

b.False

23.Customerswhodemandlowpricesandcustomizedservicesarethemostprofitablecustomers.

a.True

b.False

24.Ingeneral,servicecompaniesareidealcandidatesforactivity-basedcosting.

a.True

b.False

25.Forserviceorganizations,activity-basedcostsystemsclarifyappropriatecostassignmentsandhelptoidentifytheprofitabilityofvariousserviceactivities.

a.True

b.False

26.ThemostsuccessfulABCprojectsoccurwhenaclearbusinesspurposeexistsforbuildingtheABCmodel.

a.True

b.False

27.WhentheABCsystemhasapoormodeldesign,ABCcanstillovercomethebarrierstoimplementationandprovideaneffectivesystem.

a.True

b.False

28.Anactivity-basedcostingsystemismeanttoperformtheroleofoperationalcontrolaswellastoprovidethebasisforcostinginventoryforfinancialreporting.

a.True

b.False

29.EvenwhentheABCprojectisinitiatedfromthefinancegroup,amultifunctionalprojectteamshouldbeformed.

a.True

b.False

30.ABCsystemsalwaysprovidedecision-makingbenefitsthatexceedimplementationcosts.

a.True

b.False

MULTIPLECHOICE

31.Activity-basedcosting(ABC)caneliminatecostdistortionsbecauseABC:

a.developscostdriversthathaveacause-and-effectrelationshipwiththeactivitiesperformed

b.establishesmultiplecostpools

c.eliminatesproductvariations

d.recognizesinteractionsbetweendifferentdepartmentsinassigningsupportcosts

32.Traditionalcostsystemsdistortproductcostsbecause:

a.theydonotknowhowtoidentifytheappropriateunits

b.excesscapacitycostsareignored

c.theyemphasizefinancialaccountingrequirements

d.theyapplyaveragesupportcoststoeachunitofproduct

33.Unit-levelcostdriversintraditionalcostsystemsdistortproductcostsbecausethey:

a.assumethatallsupportactivitiesaffectallproducts

b.recognizespecificactivitiesthatarerequiredtoproduceaproduct

c.donotconsistentlyrecordcosts

d.failtomeasurethecorrectamountoftotalcostsforallproducts

34.Smallercostdistortionsoccurwhenthetraditionalsystems’unit-levelassignmentsandthealternativeactivitycostdriverassignments:

a.aredifferentinproportiontoeachother

b.aresimilarinproportiontoeachother

c.aremoredifferentthanalike

d.usethesamecostdriverunits

35.Theuseofunit-relatedmeasurestoassignsupportcostsismorelikelyto:

a.undercosthigh-volumeproducts

b.undercostspecialtylow-volumeproducts

c.undercostcomplexproducts

d.Both(b)and(c)arecorrect.

36.MisleadingcostnumbersareMOSTlikelytheresultofmisallocating:

a.directmaterialcosts

b.directmanufacturinglaborcosts

c.supportcosts

d.Alloftheabovearecorrect.

37.OvercostingofaproductisMOSTlikelytoresultfrom:

a.misallocatingdirectlaborcosts

b.overpricingtheproduct

c.undercostinganotherproduct

d.understatingtotalproductcosts

38.Undercostingaparticularproductmayresultin:

a.lossofmarketshare

b.lowerprofits

c.operatinginefficiencies

d.understatingtotalproductcosts

39.Itisimportantthattheproductcostsreflectasmuchofthediversityandcomplexityofthemanufacturingprocesssothat:

ductcostswillreflecttheirrelativeconsumptionofresources

b.betterinformationrelatedtoresourceconstraintscanbecapturedandcommunicated

c.thereislesslikelihoodofcostdistortions

d.Alloftheabovearecorrect.

40.Activity-basedcosting(ABC)caneliminatecostdistortionsbecauseABC:

a.developscostdriversthatdirectlylinktheactivitiesperformedtotheproductsmanufactured

b.establishesmultiplecostpools

c.employscapacity-relatedcostdrivers

d.recognizesinteractionsbetweendifferentdepartmentsinassigningsupportcosts

41.DifferentproductsconsumedifferentproportionsofsupportcostsbecauseofdifferencesinallofthefollowingEXCEPT:

a.salesprices

b.customers’customizationspecifications

c.setuptimes

ductdesign

42.WhichofthefollowingisasignthatanABCsystemmaybeuseful?

a.Therearesmallamountsofsupportcosts.

b.Productsmakediversedemandsonresourcesbecauseofdifferencesinvolume,processsteps,batchsize,orcomplexity.

c.Productsacompanyislesssuitedtoproduceandsellshowsmallprofits.

d.Operationsthroughouttheplantarefairlysimilar.

43.Unitsofproductionaremostappropriateasasupportassignmentbasewhen:

a.itisaservicedepartment

b.onlyoneproductismanufactured

c.directlaborcostsarelow

d.factoriesproduceacomplexandvariedmixofproducts

44.Productlinesthatproducedifferentvariations(models,styles,orcolors)oftenrequirespecializedactivitiesthattranslateinto:

a.lowersupportcostsforeachproductline

b.decisionstodropproductvariations

c.morefavorabledirectlaborcostratios

d.moresupportcostsforeachproductline

45.Whenacompanymanufacturesavarietyofcomplexproducts,severalunit-levelcostdriverscancapturethecomplexityanddiversityofprocesses:

a.always

b.frequently

c.infrequently

d.never

46.Greatersupportcostsareassociatedwith:

a.specializedengineeringdrawings

b.qualityspecificationsandtesting

c.inventoriedmaterialsandmaterialcontrolsystems

d.Alloftheabovearecorrect.

47.Acompanyproducesthreeproducts;ifoneproductisovercostedthen:

a.oneproductisundercosted

b.oneortwoproductsareundercosted

c.twoproductsareundercosted

d.noproductsareundercosted

48.ThegoalofaproperlyconstructedABCsystemisto:

a.havethemostaccuratecostsystem

b.identifymoreindirectsupportcosts

c.developthebestcostsystemforaneconomicallyreasonablecost

d.haveseparateallocationratesforeachdepartment

49.Designinganactivity-basedcostsystemincludes:

a.classifyingasmanycostsasindirectcostsasisfeasible

b.creatingasmanycostpoolsaspossible

c.identifyingtheactivitiesinvolvedinaprocess

d.seekingabroaderfocusratherthandetail

50.Designofanactivity-basedcostsystemrequiresthat:

a.thejobbidprocessberedesigned

b.resourcecostsbelinkedtotheactivitiesperformed

c.thecostofactivitiesbelinkedtocostobjects

d.Both(b)and(c)arecorrect.

51.Whichofthefollowingstatementsaboutactivity-basedcostingisNOTtrue?

a.ABCisusefulforallocatingmarketinganddistributioncosts.

b.ABCismorelikelytoresultinmajordifferencesfromtraditionalcostingsystemsifthefirmmanufacturesonlyoneproductratherthanmultipleproducts.

c.ABCseekstodistinguishbatch-related,product-sustaining,andfacility-sustainingcosts,especiallywhentheyarenotproportionatetooneanother.

d.ABCdiffersfromtraditionalcostingsystemsinthatproductsarenotcross-subsidized.

THEFOLLOWINGINFORMATIONAPPLIESTOQUESTIONS52AND53.

Cannadyproducessixproducts.SR6costs$168.00perunitundertheirtraditionalcostsystemusingonecostdriver.AnanalysisoftheactivitiesandtheircostsrevealedthatthreecostdriverswouldbeusedunderthenewABCsystem.ThenewcostofSR6wasdeterminedtobe$178.00perunit.

52.ThetotalamountofsupportcostsassignedtoproductSR6usingthetraditionalmethodis__________thetotalamountassignedusingABC.

a.morethan

b.lessthan

c.identicalto

d.indeterminatefrom

53.Giventhischangeinthecost:

a.SR6’scostingresultsunderthenewsystemdependontheadequacyandqualityoftheestimatedcostdriversandcostsusedbythesystem.

b.SR6willnowcommandahighersalesprice.

c.SR6hasbenefitedfromthenewsystem.

d.SR6isdefinitelymoreaccuratelycosted.

THEFOLLOWINGINFORMATIONAPPLIESTOQUESTIONS54THROUGH56.MerrimanCompanyprovidesthefollowingABCcostinginformation:

Activities

Accountinquiryhours

AccountbillinglinesAccountverificationaccountsCorrespondenceletters

Totalcosts

TotalCosts

$400,000

$280,000

$150,000

$50,000

$880,000

Activity-costdrivers

10,000hours

4,000,000lines

40,000accounts

4,000letters

TheaboveactivitiesareusedbyDepartmentsAandBasfollows:

AccountinquiryhoursAccountbillinglinesAccountverificationaccountsCorrespondenceletters

DepartmentA

2,000hours

400,000lines

10,000accounts

1,000letters

DepartmentB

4,000hours

200,000lines

8,000accounts

1,600letters

54.HowmuchoftheaccountinquirycostwillbeassignedtoDepartmentA?

a.$80,000

b.$400,000

c.$160,000

d.Noneoftheaboveiscorrect.

55.HowmuchofaccountverificationcostswillbeassignedtoDepartmentA?

a.$30,000

b.$37,500

c.$150,000

d.$10,000

56.HowmuchofthetotalcostswillbeassignedtoDepartmentA?

a.$158,000

b.$80,000

c.$224,000

d.$880,000

THEFOLLOWINGINFORMATIONAPPLIESTOQUESTIONS57AND58.

BarnesCorporationmanufacturestwomodelsofofficechairs:astandardandadeluxemodel.Thefollowingactivityandcostinformationhasbeencompiled.

Product

Standard

Deluxe

Overheadcosts

Numberof

Setups

22

28

$20,000

Numberof

Components

8

12

$40,000

Numberof

DirectLaborHours

375

225

57.Assumeatraditionalcostingsystemappliesthe$60,000ofoverheadcostsbasedondirectlaborhours.Whatisthetotalamountofoverheadcostsassignedtothestandardmodel?

a.$24,800

b.$35,200

c.$37,500

d.$22,500

58.Numberofsetupsandnumberofcomponentsareidentifiedasactivity-costdriversforoverhead.Assuminganactivity-basedcostingsystemisused,whatisthetotalamountofoverheadcostsassignedtothestandardmodel?

a.$24,800

b.$35,200

c.$37,500

d.$22,500

Directlabor-hours

THEFOLLOWINGINFORMATIONAPPLIESTOQUESTIONS59THROUGH63.GranberryEnterpriseshasidentifiedthreecostpoolstoallocateoverheadcosts.Thefollowingestimatesareprovidedforthecomingyear:

CostPoolOverheadCosts

Supervisionofdirectlabor$320,000

$120,000$200,000$640,000

Machinemaintenance

Facilityrent

Totaloverheadcosts

Costdriver

Machine-hoursSquarefeetofarea

Activitylevel

800,000

960,000

100,000

TheaccountingrecordsshowtheMossmanJobconsumedthefollowingresources:

CostdriverActuallevel

Directlabor-hours200

Machine-hours1,600

Squarefeetofarea50

59.Ifdirectlabor-hoursareconsideredastheonlyoverheadcostdriver,whatisthesinglecostdriverrateforGranberryEnterprises?

a.$0.50perdirectlabor-hour

b.$0.80perdirectlabor-hour

c.$0.40perdirectlabor-hour

d.$1.20perdirectlabor-hour

60.Usingdirectlabor-hoursastheonlyoverheadcostdriver,whatistheamountofoverheadcostsallocatedtotheMossmanJob?

a.

b.

c.

d.

$160

$120

$240

$125

61.IfGranberryEnterprisesusesthethreeactivitycostpoolstoallocateoverheadcosts,whataretheactivity-costdriverratesforsupervisionofdirectlabor,machinemaintenance,and

facilityrent,respectively?

a.$0.60perdlh,$0.025permh,$0.80persqft

b.$1.25perdlh,$0.25permh,$0.50persqft

c.$0.40perdlh,$0.05permh,$0.20persqft

d.$0.40perdlh,$0.125permh,$2persqft

62.Usingthethreecostpoolstoallocateoverheadcosts,whatisthetotalamountofoverheadcoststobeallocatedtotheMossmanJob?

a.

b.

c.

d.

$200

$380

$675

$170

63.Whichmethodofallocationprobablybestestimatesactualoverheadcostsused?Why?

a.Singledirectlabor-hourscostdriver,becauseitisbesttoallocatetotalcostsuniformlytoindividualjobs.

b.Singledirectlabor-hourscostdriver,becauseitiseasiesttoanalyzeandinterpret.

c.Threeactivity-costdrivers,becauseitbestreflectstherelativeconsumptionofresources.

d.Threeactivity-costdrivers,becauseproductcostscanbesignificantlycross-subsidized.

THEFOLLOWINGINFORMATIONAPPLIESTOQUESTIONS64THROUGH68.ErnstingPrintershascontractstocompleteweeklysupplementsrequiredbyforty-sixcustomers.Fortheyear2005,manufacturingoverheadcostestimatestotal$420,000foranannualproductioncapacityof12millionpages.

For2005ErnstingPrintershasdecidedtoevaluatetheuseofadditionalcostpools.Afteranalyzingmanufacturingoverheadcosts,itwasdeterminedthatnumberofdesignchanges,setups,andinspectionsaretheprimarymanufacturingoverheadcostdrivers.Thefollowinginformationwasgatheredduringtheanalysis:

CostpoolManufacturingoverheadcosts

Designchanges$60,000

Setups320,000

Inspections40,000

Totalmanufacturingoverheadcosts$420,000

Activitylevel

300designchanges 5,000setups8,000inspections

During2005,twocustomers,WealthManagersandHealthSystems,areexpectedtousethefollowingprintingservices:

Activity

WealthManagers

HealthSystems

Pages

60,000

76,000

Designchanges

10

0

Setups

20

10

Inspections

30

38

64.Whatisthecostdriverrateifmanufacturingoverheadcostsareconsideredonelargecostpoolandareassignedbasedon12millionpagesofproductioncapacity?

a.$0.05perpage

b.$0.035perpage

c.$0.35perpage

d.$0.025perpage

65.Usingpagesprintedastheonlyoverheadcostdriver,whatisthemanufacturingoverheadcostestimateforWealthManagersduring2005?

a.$2,500

b.$1,750

c.$2,100

d.$3,000

66.Assumingactivity-costpoolsareused,whataretheactivity-costdriverratesfordesignchanges,setups,andinspectionscostpools?

a.$200perchange,$64persetup,$5perinspection

b.$180perchange,$160persetup,$3.20perinspection

c.$84perchange,$269persetup,$21perinspection

d.$143perchange,$76persetup,$10perinspection

67.Usingthethreecostpoolstoallocateoverheadcosts,whatisthetotalmanufacturingoverheadcostestimateforWealthManagersduring2005?

a.$6,850

b.$3,250

c.$3,430

d.$5,096

68.Whencostsareassignedusingthesinglecostdriver,numberofpagesprinted,then

a.ErnstingPrinterswillwanttoretainthishighly-profitablecustomer.

b.WealthManagerswilllikelyseektodobusinesswithcompetitors.

c.WealthManagersisunfairlyoverbilledforitsuseofprintingresources.

d.WealthManagersisgrosslyunderbilledforthejob,whileotherjobswillbeunfairlyoverbilled.

THEFOLLOWINGINFORMATIONAPPLIESTOQUESTIONS69AND70.

Nichols,Inc.,manufacturesremotecontrols.Currentlythecompanyusesaplant-widerateforallocatingmanufacturingoverhead.Theplantmanagerbelievesitistimetorefinethemethodofcostallocationandhastheaccountingdepartmentidentifytheprimaryproductionactivitiesandtheircostdrivers:

Activities

Materialhandling

Assembly

Inspection

Costdriver

Numberofparts

Laborhours

Timeatinspectionstation

AllocationRate

$2perpart

$20perhour

$3perminute

Thecurrenttraditionalcostmethodallocatessupportcostsbasedondirectlaborhoursusingarateof$200perlaborhour.

69.Whatarethemanufacturingsupportcostsperremotecontrolassumingthetraditionalmethodisusedandabatchof500remotecontrolsareproduced?Thebatchrequires1,000parts,10directlaborhours,and15minutesofinspectiontime.

a.$2,000.00perremotecontrol

b.$0.25perremotecontrol

c.$2.00perremotecontrol

d.$4.00perremotecontrol

70.Whatarethemanufacturingsupportcostsperremotecontrolassuminganactivity-basedcostingmethodisusedandabatchof50remotecontrolsareproduced?Thebatchrequires100parts,6directmanufacturinglaborhours,and2.5minutesofinspectiontime.

a.$4.00perremotecontrol

b.$6.55perremotecontrol

c.$24.00perremotecontrol

d.$327.50perremotecontrol

71.TheMOSTlikelyexampleofanunit-levelcostis:

a.generaladministrativecosts

b.payingsuppliersforordersreceived

c.engineeringcosts

d.machinedepreciation

72.TheMOSTlikelyexampleofabatch-levelcostis:

a.

b.

c.

d.

utilitycosts

machinerepairs

product-designingcosts

setupcosts

73.Designcostsareanexampleof:

a.unit-levelcosts

b.batch-levelcosts

duct-sustainingcosts

d.facility-sustainingcosts

74.Itisusuallydifficulttofindgoodcause-and-effectrelationshipsbetween__________andacostallocationbase.

a.unit-levelcosts

b.batch-levelcosts

duct-sustainingcosts

d.facility-sustainingcosts

75.Logicalcostallocationbasesinclude:

a.cubicfeetofpackagesmovedtomeasuredistributionactivity

b.machinehourstomeasuresetupactivity

c.directmanufacturinglaborhourstomeasuredesigningactivity

d.Alloftheabovearecorrect.

76.Amanufacturingfirmproducesmultiplefamiliesofproductsrequiringvariouscombinationsofdifferenttypesofparts.Ofthefollowing,theMOSTappropriatecostdriverforassigningmaterialshandlingcoststothevariousproductsis:

a.directlaborhours

b.numberofunitsproduced

c.numberofpartsused

d.numberofsuppliersinvolved

77.Ifproductsarealike,thenforcostingpurposes:

a.asimplecostingsystemwillyieldaccuratecostnumbers

b.anactivity-basedcostingsystemshouldbeused

c.multipleunit-levelcostratesshouldbeused

d.varyingdemandswillbeplacedonresources

78.Activity-basedcostingsystemsprovidebetterproductcostswhenthey:

a.employmoreactivitycostdrivers

b.employfeweractivitycostdrivers

c.identifyandcostmoresupportcostdifferencesamongproducts

d.alwaysyieldmoreaccurateproductcoststhantraditionalsystems

79.Withtraditionalcostingsystems,productsmanufacturedinsmallbatchesandinsmallannualvolumesmaybe_____________becausebatch-relatedandproduct-sustainingcostsareassignedusingunit-relateddrivers.

a.overcosted

b.undercosted

c.fairlycosted

d.ignored

80.Transactiondrivers:

a.countthefrequencyofanactivity

b.involvedirectlychargingfortheresourcesusedeachtimeanactivityisperformed

c.arethemostexpensiveandaccuratetypeofcostdriver

d.oftenapplyaweightedindexapproachbyestimatingthedifficultyofthetaskforvarioustypesofsituations

THEFOLLOWINGINFORMATIONAPPLIESTOQUESTIONS81AND82.

ProductsS5andCP8eachareassigned$50.00insupportcostsbyatraditionalcostingsystem.Anactivityanalysisrevealedthatalthoughproductionrequirementsareidentical,S5requires45minuteslesssetuptimethanCP8.

81.AccordingtoanABCsystem,CP8is__________underthetraditionalsystem.

a.undercosted

b.overcosted

c.fairlycosted

d.accuratelycosted

82.AccordingtoanABCsystem,S5usesadisproportionately:

a.smalleramountofunit-levelcosts

b.largeramountofunit-levelcosts

c.smalleramountofbatch-levelcosts

d.largeramountofbatch-levelcosts

83.Activity-basedmanagement(ABM)includesdecisionsaboutallofthefollowingEXCEPT:

a.

b.

c.

d.

pricingandproductmix

smoothingcosts

reducingcosts

improvingprocesses

84.ABCsystems:

a.revealactivitiesthatcanbeeliminated

b.helpcontrolnonfinancialitemssuchasnumberofsetuphours

c.helpidentifynewdesignstoreducecosts

d.Alloftheabovearecorrect.

85.Awell-designed,activity-basedcostsystemhelpsmanagersmakebetterdecisionsbecauseinformationderivedfromanABCanalysis:

a.canbeusedtoeliminatenonvalue-addedactivities

b.iseasytoanalyzeandinterpret

c.takesthechoicesandjudgmentchallengesawayfromthemanagers

d.emphasizeshowmanagerscanachievehighersales

86.ThegoalofaproperlyconstructedABCsystemisto:

a.developthebestcostsystembystayingwithintheeconomizingconstraints(relevantbenefitversuscosttradeoffforthesystem)

b.havethemostaccuratecostsystem

c.clonetheABCmodelprocesses

d.adapttheABCmodelexactlytotheorganization

87.Thebestcostestimateforresourcesrequiredtohandleproductionrunsisdevelopedbyusing__________asthedenominatorforactivitydrivercalculations.

a.actualdriverquantitiesofactualproductionruns

b.estimateddriverquantitiesofestimatedproductionruns

c.availablecapacity

d.practicalcapacity

88.Themajorreasonforusingpracticalcapacityasthedenominatorforactivitydrivercalculationsisto:

a.avoiddistortionsinducedbytheassignmentofexcesscapacitycoststotheproducts

b.simplifythecalculationsoftheactivitydrivers

c.reducethecostofunusedcapacity

d.placelessemphasisonthecostofunusedcapacity

89.Determiningrealistic,practicalcapacitymeasurementsisa(n):

a.fairlysimpleprocess

b.judgmentalprocess

c.straightforwardprocess

d.impossibleprocess

90.APRIMARYreasonforassigningsellinganddistributioncoststoproductsforanalyticalpurposesis:

a.tojustifyavariedproductmix

b.thatcontrollersarerequiredtoassignallcostswhenvaluinginventories

c.thatdifferentprocesses,products,andcustomersrequiredifferentquantitiesofsellinganddistributionactivities

d.thatallindirectcostsmustbeassigned

91.Undertraditionalcostingsystems,sellingandadministrativecostshavebeenlargelyignoredbecausethey:

a.arehardtoquantifyexceptatexorbitantcostofmeasurement

b.havebeennegligibleinamountrelativetototalcosts

c.arenotinventoriableforfinancialreportingpurposesunderGAAP

d.relatetoavariedmixofproducts

92.Aggressivecustomerswhodemandlowpricesandcustomizedservices:

a.requirehighcoststoserve

b.aremostprofitabletoserve

c.arecustomerstoeliminate

d.Both(a)and(b)abovearecorrect.

93.AkeyreasonforusinganABCsystemratherthanaconventionalsystemisbecauseABCassignssupportcosts:

a.becausetheyareindirectcosts

b.moresimplythanatraditionalsystem

c.basedonlyontransactiondrivers

d.toreflectdifferencesrequiredbydifferentprocessesaswellascustomers

94.Forserviceorganizationsthatbillcustomersatapredeterminedaveragerate,activity-basedcostsystemscanhelpto:

a.clarifya