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