chapter 12 ACT 4496

Which of the following is an example of a non-value-added activity? a.Inspecting products b.Purchasing materials c.Processing customer orders d.Molding molds

A

Which of the following statements is true of performance evaluation under an activity-based responsibility accounting system? a.Decreasing the time a process takes to deliver its output to customers is viewed as a vital objective. b.Performance is measured by the ability to meet or beat a stable financial standard. c.Individuals are held accountable only for those items over which they have control. d.Performance is measured by comparing actual outcomes with budgeted outcomes.

A

A systemwide integrated approach that focuses management's attention on activities with the objectives of improving customer value and the profit achieved by providing this value is called: a.overhead-activity management. b.activity-based management. c.financial-based management. d.results-based management.

B

Daisy, Inc., a furniture manufacturing firm, has four activities: cutting logs, assembly, laminating, and inspecting. Inspecting is an unnecessary activity. The following data pertain to the four activities for the year ending 20x1 (actual price per unit of the activity driver is assumed to be equal to the standard price): Calculate non-value added costs for each activity. a.$90,500 b.$103,000 c.$87,500 d.$100,000

B

Non-value-added costs can be calculated: a.by multiplying the non-value-added standard quantities by the price standard. b.as the difference between the actual level of the activity's output and the value-added level, multiplied by the standard price. c.as the sum of the actual level of the activity's output and the value-added level, divided by the standard price. d.by multiplying the actual level of the activity's output by the price standard.

B

Which of the following is true of kaizen costing? a.Kaizen costing is not compatible with activity-based responsibility accounting. b.Kaizen costing is characterized by constant, incremental improvements to existing processes and products. c.Kaizen costing aims at eliminating all value-added cost through a series of kaizen improvements. d.Kaizen costing is synonymous with standard costing.

B

Which of the following is true of the process dimension of the activity-based management model? a.It is useful for product costing. b.Its objective is cost reduction. c.Its objective is to improve the accuracy of cost assignments. d.It is useful for strategic cost management.

B

Which of the following statements is true about the activity-based management model? a.The activity-based management model is less comprehensive than an activity-based costing system. b.One of the objectives of the activity-based management model is to improving the accuracy of cost assignments. c.The activity-based management model is not concerned with the issue or presence of waste in activities. d.The concept of the activity-based management model is synonymous with the concept of the financial-based management model.

B

Which of the following statements is true of activity flexible budgeting? a.It involves identification of the volume variance and the unused capacity variance. b.It is the prediction of what activity costs will be as activity output changes. c.It is similar to the traditional approach of budgeting. d.It predicts costs for the actual level of activity by assuming that a single unit-based driver drives all costs.

B

Which of the following statements is true of driver analysis? a.It is the process designed to assess how well an activity was performed and the results achieved. b.It is the effort expended to identify those factors that are the root causes of activity costs. c.It is the process of identifying, describing, and evaluating the activities an organization performs. d.It is the effort expended to identify the number of times an activity is performed. Feedback

B

Which of the following statements is true of process value analysis? a.It moves activity management from an operational basis to a conceptual basis. b.It focuses on accountability for activities. c.It is not concerned with the issue or presence of waste in activities. d.It emphasizes the maximization of individual performance.

B

Activity volume variance is: a.the difference between actual activity level acquired and value-added standard quantity of activity that should be used, multiplied by actual activity rate. b.the difference between actual activity level acquired and non-value-added standard quantity of activity that should be used, divided by actual activity rate. c.the difference between actual activity level acquired and value-added standard quantity of activity that should be used, multiplied by budgeted activity rate. d.the difference between actual activity level acquired and non-value-added standard quantity of activity that should be used, multiplied by budgeted activity rate.

C

Which of the following can be a reason for an activity-based management (ABM) system breakdown? a.Ignorance about the presence of waste in activities b.Failure to find root causes of each activity c.Lack of support of higher-level management d.Failure to accurately assign costs to cost objects

C

Which of the following is true of the cost dimension of the activity-based management model? a.It provides information about what activities are performed and how well they are performed. b.Its objective is cost reduction. c.It is useful for tactical analysis. d.It provides the ability to engage in and measure continuous improvement.

C

Which of the following responsibility accounting systems assigns responsibility to organizational units? a.An activity-based responsibility accounting system b.A process-based responsibility accounting system c.A financial-based responsibility accounting system d.A strategic-based responsibility accounting system

C

Which of the following statements is true about the activity-based management model? a.The concept of the activity-based management model is synonymous with the concept of the financial-based management model. b.The activity-based management model is not concerned with the issue or presence of waste in activities. c.One of the objectives of the activity-based management model is to improving the accuracy of cost assignments. d.The activity-based management model is less comprehensive than an activity-based costing system.

C

Which of the following statements is true of activity-based costing? a.Activity-based costing emphasizes activity management with the intent of maximizing systemwide performance. b.Activity-based costing is concerned with the issue or presence of waste in activities. c.Activity-based costing is an important source of information for managing activities. d.Activity-based costing is concerned with three elements: driver analysis, activity analysis, and performance measurement.

C

Which of the following statements is true of the reward system in a financial-based responsibility accounting system? a.The reward system in a financial-based responsibility accounting system emphasizes gainsharing. b.The reward system in a financial-based responsibility accounting system is more complicated than it is in an activity-based setting. c.The reward system in a financial-based responsibility accounting system is designed to encourage individuals to achieve or beat budgetary standards. d.The reward system in a financial-based responsibility accounting system is multidimensional in nature.

C

Which of the following steps is associated with the process value analysis dimension of an activity-based management (ABM) implementation model? a.Assign costs to cost objects b.Calculate activity rates c.Define root causes of each activity d.Assign resource costs to activities

C

Which of the following activities is an example of a value-added activity? a.Reordering parts b.Handling customer complaints c.Reporting defects d.Filing tax returns

D

Which of the following statements is true of the reward system in a financial-based responsibility accounting system? a.The reward system in a financial-based responsibility accounting system emphasizes gainsharing. b.The reward system in a financial-based responsibility accounting system is multidimensional in nature. c.The reward system in a financial-based responsibility accounting system is more complicated than it is in an activity-based setting. d.The reward system in a financial-based responsibility accounting system is designed to encourage individuals to achieve or beat budgetary standards.

D

Which of the following steps is a common step between activity-based costing and process value analysis of an activity-based management (ABM) implementation model? a.Assess value content of activities b.Define root causes of each activity c.Calculate activity rates d.Identify, define, and classify activities

D

Which of the following steps is associated with the activity-based costing dimension of an activity-based management (ABM) implementation model? a.Establish activity performance measures b.Define root causes of each activity c.Assess value content of activities d.Calculate activity rates

D

_____ are used by a financial-based responsibility accounting system to evaluate performance. a.Value-added standards b.Optimal standards c.Process-oriented standards d.Static standards

D

_____ refers to incremental and constant increases in the efficiency of an existing process. a.Process reengineering b.Process creation c.Process innovation d.Process improvement

D

One activity of a manufacturing company is scheduling. Activity output is measured by scheduling hours. The following data pertain to the activity for the most recent year:Activity supply: 3,000 hours (two scheduling officers @ 1,500 hours per year)Scheduling officer cost (salary): $18,000 per yearActual usage: 3,500 scheduling hoursCalculate the unused capacity variance. a.$3,000 unfavorable b.$6,000 unfavorable c.$6,000 favorable d.$3,000 favorable

B Correct. Unused capacity variance = (Actual usage - Actual activity level) × Standard price = (3,500 hours - 3,000 hours) × [($18,000 × 2) / 3,000 hours] = $6,000 unfavorable