Week 3 SmartBook
The method of cost estimation that studies the current process and the resulting cost incurrence is the __________ method.
engineering
The cost estimation method that uses two points to estimate the variable and fixed costs is __________ __________
high-low
An engineered cost
bears a definitive physical relationship to the activity measure
High volume and quickly changing or new information provided in multiple formats are characteristics of
big data
An activity that must be done for each item produced is a(n) __ level activity.
unit
Labor hour based product costing systems where labor hour are related closely to the factory volume are also called ______ costing systems.
- throughput-based - volume-based
Given a least-squares regression line, the b is the
-slope coefficient -variable cost per unit
The method of cost estimation that studies the current process and the resulting cost incurrence is the ________ method
engineering
Cost behavior patterns are also called cost
functions
Factors influencing the movement from traditional to ABC costing include all of the following except ______.
high reliance on labor to produce products
One issue with data collection is that, during periods of __________, historical cost data may not reflect future cost behavior.
inflation
With a traditional volume-based costing system, there is a tendency to undercost ______.
low-volume, complex
Another term for a semivariable cost is a(n) __________ cost
mixed
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) __________ __________. (Enter only one word per blank
unit level
The customer-profitability analysis information is frequently used by management to do all of the following except ______.
determine which product lines to eliminate
A cost that results from management's decision to spend a particular amount of money for some purpose is a(n) __________ cost.
discretionary
One issue with data collection is that fixed __________ costs are often budgeted in a manner than makes them appear variable.
discretionary
A characteristic of an event or activity that results in the incurrence of costs is a cost
driver
With a traditional volume-based costing system, there is a tendency to overcost ______ products.
high-volume, standard
The least-squares regression line includes two estimates which are called __________
parameter
The level of activity within which management expects the company to operate is called the __________ __________.
relevant range
Volume-based costing is is also called __________ based costing.
throughput
Labor hour based product costing systems where labor hour are related closely to the factory volume are also called ______ costing systems.
throughput-based
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
A common version of ABC that is used in the service industry is called __________
TDABC
When the analyst has no clear idea about the behavior of a cost item, it is helpful to use the __________ __________ method to plot recent observations of the costs at various levels of activity
visual fit
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
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.
A close examination of an organization's ledger accounts is an example of the __________ __________ method of cost estimation.
account classification or analysis
The intersection of the cost assignment view and the process view in the two-dimensional ABC model is ______.
activities
The use of ABC information to support an organization's strategy, improve operations or manage costs is called __________ __________ management.
activity based
The first stage in an ABC system is to ______.
identify significant activities and assign overhead costs to each activity
The second stage in an ABC system is to ______.
identify the cost driver for each activity cost pool
Customer-profitability analysis is NOT affected by ______.
standard product costs
A cost that remains unchanged in total over a wide range of activity, but jumps in total when the range limit is reached is a(n) __________ __________ cost.
step fixed
Volume-based costing is is also called __________ based costing
throughput
The steps in customer-profitability analysis include ______.
-apply customer related cost driver rate to customer activity -calculate customer related cost driver rate -identify customer related activities -identify customer related cost drivers
Which of the following statements are correct?
-Cost behavior pattens can depend on the cost driver selected. -Organizations are crucial determinants of cost behavior for each cost item. -Conclusions about cost behaviors are not necessarily transferred between industries.
The steps in stage one of ABC costing are ______
-identification of activity cost pools -assignment of overhead costs to appropriate cost pools
An activity that must be done for each item produced is a(n) __ level activity.
-identification of cost drivers for each activity cost pool -computation of total unit activity cost for each product line
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
Given the least-squares regression line, the sigma is the ______.
-intercept -total fixed cost
Managers who have a good understanding of which customers are generating the greatest profit can ______.
-make informed decisions about customer service -share cost savings with customers -often change customer behaviors
Non-value added activities can be ______.
-necessary, but inefficient and improvable -unnecessary and dispensable
Product costs can be distorted by using ______.
-only unit level cost drivers -single cost pool -the same cost driver for all activities
Traditional product costing systems may not work well when a company ______.
-relies only on unit-based costs drivers -manufactures a diverse set of products
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
A system that uses multiple cost pools and assigns costs to products in accordance with the amount of the activity used by the product line is a(n) ______ costing system.
activity-based
The goodness of fit for a regression line is measured by the __________ __________ __________
coefficient of determination
The relationship between cost and activity is called __________ __________
cost behavior
A characteristic of an event or activity that results in the incurrence of costs is a(n) __.
cost driver
The process of identifying the cost and use of services by customers is called __________ __________ analysis.
customer profitability