Chapter 5: Activity based costing and managment
The process of identifying the cost and use of services by customers is called
customer profitability analysis
Identification of a proper cost driver can not result in
lower marketing costs
The steps in stage one of the ABC costing are
-assignment of costs to appropriate cost pool -identification of cost pools
The customer-profitability analysis information is frequently used by management to do all of the following except
-determine which product lines to eliminate
a value added activity is
-performed efficiently -necessary to production
product costs can be distorted by using
-the same cost driver for all activities -single cost pool -a cost driver at a level different from the activity
Labor hour based product costing systems where labor hours are related closely to the factory volume are also called
-throughput-based costing systems -volume-based costing systems
Identification of activity costs pools occurs in what stage
One
redesign of an existing product or testing prototypes are example of?
Product sustaining level activities
what does not impact customer-profitability analysis?
Standard product costs
the intersection of the cost assignment view and the process view in the ABC model is ?
activites
cost of measurement relates to the
cost of obtaining the information compared to the benefit of using the information obtained.
a graphical display of an organizations complete customer-profitability analysis is called a?
customer profitability Profile
Identification of activities should be done at the broadest level possible
false
The degree of correlation is
the relationship between the consumption of an activity and the consumption of the cost driver
Volume based costing is also called
throughput based costing
An activity that must be done for each item produced is a
unit level activity
the use of ABC information to support an organization's strategy, improve operations and manage costs is called?
Activity based management
a complete listing of activities required for the production of a product or service is a
Bill of activities
activities that are necessary to support entire product lines, but are not performed every time a new unit or batch is produced is a?
Product sustaining level activity
ABC costing is used in the service industry for all of the following except to
identify the number of product to sell to each customer
the relationship between the consumption of an activity and the consumption of the cost driver
is the degree of correlation
The focus on the causes of activities and the evaluation of these activities is the ________ view of an ABC system
process