ACCT 666 - Chapter 5

A complete listing of all activities identified and used in the ABC analysis is ______.

an activity dictionary

With a traditional volume-based costing system, there is a tendency to overcost ______ products.

high-volume, standard

With a traditional volume-based costing system, there is a tendency to undercost ______.

low-volume, complex

Activities that are necessary to support entire product lines, but are not performed every time a new unit or batch is produced are _________-________ level activities.

product sustaining

An activity that must be done for each item produced is a(n) __ level activity.

unit

A common version of ABC that is used in the service industry is called _______

TDABC

The use of ABC information to support an organization's strategy, improve operations and manage costs is called _______ management.

activity-based

The use of ABC information to support an organization's strategy, improve operations or manage costs is called _________-________ management.

activity-based

Storage time is the time ______.

during which items are held before further processing or shipment

The time spent ensuring the product is of high quality is called ______ time.

inspection

Customer-profitability analysis is NOT affected by ______.

standard product costs

Traditional product costing systems may not work well when a company ______.

-relies only on unit-based costs drivers -manufactures a diverse set of products

Product costs can be distorted by using ______.

-single cost pool -only unit level cost drivers -the same cost driver for all activities

True or false: Identification of activities should be done at the broadest level possible.

false

Factors influencing the movement from traditional to ABC costing include all of the following except ______.

high reliance on labor to produce products

ABC costing is used in the service industry for all of the following except to ______.

identify the number of products to sell to each customer

Categorizing the ways in which time is spent in a production process is one approach cost-management analysts find helpful in ______.

identifying non-value added activities

Engineering design cost is an example of a(n) ______ level activity.

product-sustaining

Using activity-based costing to determine the activities, costs and profits associated with serving particular customers is called customer ______ analysis.

profitability

The degree of correlation is the ______.

relationship between the consumption of an activity and the consumption of the cost driver

True or false: An activity may be valued-added in some situations and non-value added in other situations.

true

Identification of cost drivers for each activity cost pool occurs in stage of ___________ ABC costing.

two

An activity that must be done for each item produced is a(n) _________-________ activity.

unit level

The steps in stage two of ABC costing are ______.

-identification of cost drivers for each activity cost pool -computation of total unit activity cost for each product line

The customer-profitability analysis information is frequently used by management to do all of the following except ______.

determine which product lines to eliminate

The process of speaking with a key employee in a support department to gather information about how time is spent is an example of ______.

interviewing

A duplicate operation ______.

is always a non-value added activity

The relationship between the consumption of an activity and the consumption of the cost driver ______.

is the degree of correlation

Continuous and gradual cost reduction is the meaning of _____- costing.

kaizen

The concept that improvement is the goal and responsibility of every worker from the CEO to manual laborers, in every activity, every day, all the time is the basis of ______ costing.

kaizen

A set of linked activities is called a(n

process

A set of linked activities is called a(n)

process

Activity analysis that looks at a set of linked activities to determine the cause of a non-value added activity is called __________ _________ analysis.

process value

Activity analysis that looks at a set of linked activities to determine the cause of a non-value added activity is called______ _______ analysis

process value

Volume-based costing is is also called __________ based costing.

throughput

One way of picturing the relationship between ABC and ABM is in terms of the _________-________ ABC model that shows how costs can be repurposed to provide insight into the cost and effectiveness of the processes.

two-dimensional

Labor hour based product costing systems where labor hour are related closely to the factory volume are also called ______ costing systems.

volume-based throughput-based

Product costs are most likely to be distorted when using a(n) -____________ based product costing system.

volume

Non-value added costs should be highlighted in ______.

activity center cost reports

The cost assignment view of the ABC system uses all of the following except ______.

identification of events that trigger activities

One factor driving the movement toward ABC is ______.

more product diversity

An activity that is unnecessary and dispensable is a(n) ______.

non-valued added activity

Assignment of overhead costs to activity cost pools occurs in stage of _______ ABC costing.

one

Which of the following statements are true?

-Activities in service industries are classified as unit level, batch level, product-sustaining level and facility level activities. -The objectives of ABC costing in service industries are no different from those in manufacturing industries.

The steps in stage one of ABC costing are ______.

-assignment of costs to appropriate cost pool -identification of cost pools

The process of identifying the cost and use of services by customers is called ____ _______ analysis

-customer -profitability

A common version of ABC that is used in the service industry is called

-The objectives of ABC costing in service industries are no different from those in manufacturing industries. -Activities in service industries are classified as unit level, batch level, product-sustaining level and facility level activities.

The steps in customer-profitability analysis include ______.

-identify customer related activities -apply customer related cost driver rate to customer activity -calculate customer related cost driver rate -identify customer related cost drivers

When implementing an ABC system, identifying a company's significant activities ______.

-is called activity analysis -should create an activity list broken down to the most fundamental level practical

Non-value added activities can be ______.

-necessary, but inefficient and improvable -unnecessary and dispensable

Reasons that time-driven activity-based costing (TDABC) is used in service industries include ______.

-the focus of reporting can easily highlight unused capacity -capacity in service industries is usually expressed in terms of time -resources deployed are frequently associated with the time taken to provide the service

Volume-based product costing systems have difficulty assigning overhead costs accurately if ______.

-there is a large proportion of non-unit-level activities -products differ significantly in the way they use activities

True or false: Interviews with key employees should rarely be used in developing ABC systems.

False

A complete listing of activities required for the production of a product or service is a(n) ______.

bill of activities