Chapter 5 test bank with answers Horngren\'s Cost Accounting: A Managerial Emphasis, 16th Global Edition PDF

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Cost Accounting: A Managerial Emphasis, 16e, Global Edition (Horngren)Chapter 5 Activity-Based Costing and Activity-Based Management5 Objective 5. Which of the following statements is true of a peanut-butter costing system? A) A peanut-butter costing system typically has more-homogeneous indirect co...

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Cost Accounting: A Managerial Emphasis, 16e, Global Edition (Horngren) Cha pt e r5 Ac t i vi t yBa s e dCos t i nga ndAc t i vi t yBa s edMa nage me nt 5 . 1 Obj e c t i ve5 . 1 1 )Whi c hoft hef ol l o wi ngs t a t e me nt si st r ueofape a nut but t e rc os t i ngs ys t e m? A)A pe a nut but t e rc os t i ngs y s t e mt ypi c a l l yha smor e homo ge ne ousi ndi r e c tc os tpool s . B)A pe a nut but t e rc os t i ngs y s t e m br oa dl ya ve r a ge sors pr e a dst hec os tofr e s our c e suni f or ml yt oc os t obj e c t s . C)A pe a nut but t e rc os t i ngs y s t e ma s s ume st ha ta l lc os t sa r eva r i a bl e . D)I nape a nut but t e rc os t i ngs ys t e m,c os t sofa c t i vi t i e sa r eus e dt oa s s i gnc os t st oot he rc os tobj e c t ss uc h a spr oduc t sors e r vi c e sba s e dont hea c t i vi t i e st hepr oduc t sors e r vi c e sc ons ume . Ans we r :B Di ff: 2 Obj e c t i ve :1 AACSB:Anal yt i c a lt hi nki ng

2 )Ove r c os t i ngapa r t i c ul a rpr oduc tma yr e s ul ti n: A)pr i c i ngt hepr oduc tt oohi gh B)pr i c i ngt hepr oduc tt ool o w C)ope r a t i nge ffic i e nc i e s D)unde r s t a t i ngt ot a lpr oduc tc os t s Ans we r :A Di ff: 2 Obj e c t i ve :1 AACSB:Anal yt i c a lt hi nki ng

3 )Forac ompa nywi t hdi ve r s epr oduc t s , unde r c os t i ngo ve r he a dofapr oduc twi l ll e a dt opr oduc t c r os s s ubs i di z a t i onwhi c hme a nst ha t : A)di r e c tl aborc os t soft hepr oduc ta r emi s a l l oc a t e d B)di r e c tma t e r i a lc os t soft hepr oduc ta r emi s a l l oc a t e d C)i ndi r e c tc os t sofa not he rpr oduc ta r emi s a l l oc a t e d D)di r e c tc os t sofa not he rpr oduc ta r emi s a l l oc a t e d Ans we r :C Di ff: 2 Obj e c t i ve :1 AACSB:Anal yt i c a lt hi nki ng

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4 )AquaCompa nypr oduc e st wopr oduc t s – Al phaa ndBe t a .Al phaha sahi ghma r ke ts ha r ea ndi s pr oduc e di nbul k.Pr oduc t i onofBe t ai sba s e donc us t ome ror de r sa ndi sc us t om de s i gne d.Al s o ,5 5 % of Be t a ' sc os ti ss ha r e dbe t we e nde s i gna nds e t upc os t s , whi l eAl pha ' sma j o rpor t i onsofc os t sa r edi r e c tc os t s . Al phai sus i ngas i ngl ec os tpoolt oa l l oc a t ei ndi r e c tc os t s .Whi c hoft hef ol l owi ngs t a t e me nt si st r ueof Aqua ? A)Aquawi l love r c os tBe t a ' sdi r e c tc os t sa si ti sus i ngas i ngl ec os tpoolt oa l l oc a t ei ndi r e c tc os t s . B)Aquawi l lunde r c os tAl pha ' si ndi r e c tc os t sbe c a us ea l phaha shi ghdi r e c tc os t s . C)Aquawi l love r c os tAl pha ' si ndi r e c tc os t sa si ti sus i ngas i ngl ec os tpoolt oal l oc a t ei ndi r e c tc os t s . D)Aquawi l lo ve r c os tBe t a ' si ndi r e c tc os t sbe c aus ebe t aha shi ghi ndi r e c tc os t s . Ans we r :C Di ff: 2 Obj e c t i ve :1 AACSB:Anal yt i c a lt hi nki ng

5 )Pr oduc t c os tc r os s s ubs i di z a t i on me a nst ha t : A)whe nonepr oduc ti so ve r c os t e d,i tr e s ul t si nmor et ha noneot he rpr oduc tbe i ngo ve r c os t e d B)whe nac ompa nyunde r c os t smor et ha noneofi t spr oduc t s ,i twi l lo ve r c os tmor et ha noneofi t so t he r pr oduc t s C)whe nac ompa nyunde r c os t soneofi t spr oduc t s ,i twi l love r c os ta tl e a s toneofi t sot he rpr oduc t s D)whe nonepr oduc ti sove r c os t e di tr e s ul t si na l lo t he rpr oduc t sbe i ngove r c os t e d Ans we r :C Di ff: 2 Obj e c t i ve :1 AACSB:Anal yt i c a lt hi nki ng

6 )Whi c hoft hef ol l o wi ngha sa c c e l e r a t e dne e df orr e fine dc os ts ys t e ms ? A)gl oba lmonopol i e s B)r i s i ngpr i c e s C)i nt e ns ec ompe t i t i on D)as hi f tt owa r di nc r e a s e ddi r e c tc os t s Ans we r :C Di ff: 2 Obj e c t i ve :1 AACSB:Anal yt i c a lt hi nki ng

7 )Uni f or ml ya s s i gni ngt hec os t sofr e s our c e st oc os tobj e c t swhe nt hos er e s our c e sa r ea c t ua l l yus e di na nonuni f or m wa yi sc a l l e da c t i vi t yba s e dc os t i ng . Ans we r :F ALSE Ex pl a na t i on:Pe a nutbut t e rc os t i ngoc c ur swhe nc os t sa r ea s s i gne duni f or ml ya mountmul t i pl epr oduc t s us i nga v e r a gec os t st ha tdonott a kei nt oa c c ountt henonuni f or m wa yt her e s our c e sa r ec ons ume dt o pr oduc et hedi ffe r e ntpr oduc t s . Di ff: 1 Obj e c t i ve :1 AACSB:Anal yt i c a lt hi nki ng

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8 )Pr oduc t c os tc r os s s ubs i di z a t i oni sve r yc ommonwhe nc os t sa r euni f or ml ys pr e a da c r os sv a r i ous pr oduc t s . Ans we r :TRUE Di ff: 2 Obj e c t i ve :1 AACSB:Anal yt i c a lt hi nki ng

9 )Compa ni e st ha tove r c os tpr oduc t sr i s kbe c omi ngl e s se ffe c t i veonpr i c i ng a ndl os i ngma r ke ts ha r e whe nc ompe t i t i onut i l i z e smor ea c c ur a t ec os ts ys t e ms . Ans we r :TRUE Di ff: 1 Obj e c t i ve :1 AACSB:Anal yt i c a lt hi nki ng

1 0 )I fc ompa ni e si nc r e as ema r ke ts ha r ei nagi ve npr oduc tl i nebe c a us et he i rr e por t e dc os t sa r el e s st ha n t he i ra c t ua lc os t s ,t he ywi l lbe c omemor epr ofit a bl ei nt hel ongr un. Ans we r :F ALSE Ex pl a na t i on:Thea c t ua lc os t swi l li nc r e a s ebe c a us eoft hea ddi t i ona ls a l e sa ndt heot he rpr oduc tl i ne s ( whi c ha r es ubs i di zi ngt heunde r c os t i ngoft hegr owi ngpr oduc tl i ne )wi l ls uffe r .Thene tr e s ul twi l lbet he c ompa nyha vi ngal o we rope r a t i ngi nc omet ha ni tc oul dha v eha d. Di ff: 2 Obj e c t i ve :1 AACSB:Anal yt i c a lt hi nki ng

1 1 )Aspr oduc tdi v e r s i t ya ndi ndi r e c tc os t si nc r e as e ,i ti sus ua l l ybe s tt os wi t c ha wa yf r om abr oa d a ve r a gi ngs ys t e mt oa na c t i vi t yba s e dc os ts ys t e m. Ans we r :TRUE Di ff: 1 Obj e c t i ve :1 AACSB:Anal yt i c a lt hi nki ng

1 2 )Ther i s kofpe a nut but t e rc os t i ngr i s e swhe nbr oa da ve r a g e sa r eus e da c r os smul t i pl epr oduc t s wi t houtma na ge r sc ons i de r i ngt het r uea mount sofr e s our c e sc ons ume di nt hema ki ngofe a c hpr oduc t . Ans we r :TRUE Di ff: 2 Obj e c t i ve :1 AACSB:Anal yt i c a lt hi nki ng

1 3 )Expl a i nhow at ops e l l i ngpr oduc tma ya c t ua l l yr e s ul ti nl os s e sf ort hec ompa ny . Ans we r :I fi ndi r e c tc os t sa r enotpr ope r l ya l l oc a t e dt ot hepr oduc t s ,apr oduc tma ya ppe a rt oc os tl e s s t ha ni ta c t ua l l ydoe sc os tt opr oduc e .I ft hes e l l i ngpr i c ei sba s e dont he s el owe rc os t s ,t hes e l l i ngpr i c ema y a c t ua l l ybel owe rt ha nt hec os t sne e de dt opr oduc et hepr oduc tr e s ul t i ngi nl os s e sf ort hec ompa ny . Thi s woul dma keunde r c os t e dpr oduc t sa ppe a rmor epr ofit a bl ea ndt he r e f or ema ki ngma r ke t i nge ffor t st o pr omot et heunde r c os t e dpr oduc tc ount e rpr oduc t i ve . Di ff: 2 Obj e c t i ve :1 AACSB:Anal yt i c a lt hi nki ng

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5 . 2 Obj e c t i ve5 . 2 1 )Re fini ngac os ts ys t e mi nvol ve swhi c hoft hef ol l owi ng ? A)c l a s s i f yi nga sma nyc os t sa si ndi r e c tc os t sa si sf e a s i bl e B)c r e a t i nga sma nyc os tpool sa spos s i bl et oc a pt ur ea l lc os t s C)i de nt i f yi ngt hea c t i vi t i e si nvol ve di napr oc e s sa ndunde r s t a ndi nghow t hos ea c t i vi t i e sc ons ume r e s our c e s D)Se e ki nga ne a s i e ra ndmor ec os te ffe c t i vewa yt oc a l c ul a t ea ve r a g ec os t s Ans we r :C Di ff: 1 Obj e c t i ve :2 AACSB:Anal yt i c a lt hi nki ng

2 )Whi c hoft hef ol l o wi ngi st r ueofr e fine me ntofac os t i ngs ys t e m? A)Whi l er e fini ngac os t i ngs ys t e m,c ompa ni e ss houl di de nt i f ya sma nyi ndi r e c tc os t sa si se c onomi c a l l y f e a s i bl e . B)A homoge ne ousc os tpoolwi l lus emul t i pl ec os tdr i ve r st oa l l oc a t ec os t s . C)I tr e duc e st heus eofbr oa da ve r a g e sf ora s s i gni ngt hec os tofr e s our c e st oc os tobj e c t s . D)I ti sl i ke l yt oyi e l dt hemos tde c i s i onma ki ngbe ne fit swhe ndi r e c tc os t sa r eahi ghpe r c e nt a geoft ot a l c os t s . Ans we r :C Di ff: 2 Obj e c t i ve :2 AACSB:Anal yt i c a lt hi nki ng

3 )Whi c hoft hef ol l o wi ngi sar e a s ont ha tha sac c e l e r a t e dt hede ma ndf orr e fine me nt st ot hec os t i ng s ys t e m? A)Thede c l i ni ngde ma ndf orc us t omi z e dpr oduc t sha sl e dma na ge r st ode c r e a s et heva r i e t yofpr oduc t s a nds e r vi c e st he i rc ompani e soffe r . B)Theus eofpr oduc ta ndpr oc e s st e c hnol ogyha sl e dt oa ni nc r e a s ei ni ndi r e c tc os t sa ndade c r e a s ei n di r e c tc os t s . C)Thei nc r e a s e dofa ut oma t e dpr oc e s s e sha sl e dt ot hei nc r e a s ei ndi r e c tma nuf ac t ur i ngc os tl e a di ngt oa de c r e a s ei nbr e ake ve npoi nt . D)Thei nc r e a s i ngc ompe t i t i oni npr oduc tma r ke t sha sl e dt oani nc r e a s ei nc ont r i but i onma r gi nr e s ul t i ng i nade c r e a s eofbr e a ke ve npoi nt . Ans we r :B Di ff: 3 Obj e c t i ve :2 AACSB:Anal yt i c a lt hi nki ng

4 )De ma ndf orr e fine me nt st ot hec os t i ngs ys t e m ha sa c c e l e r a t e dduet o_ _ _ _ __ _ _ . A)i nc r e a s ei ndi r e c tc os t s B)de c r e a s ei npr oduc tdi ve r s i t y C)de c r e a s ei ni ndi r e c tc os t s D)c ompe t i t i oni npr oduc tma r ke t s Ans we r :D Di ff: 1 Obj e c t i ve :2 AACSB:Anal yt i c a lt hi nki ng

5 )J ohns onSupe r i orPr oduc t sI nc .pr oduc e shos pi t a le qui pme nta ndt hes e t upr e qui r e me nt sva r yf r om pr oduc tt opr oduc t .J ohns onpr oduc e si t spr oduc t sba s e donc us t ome ror de r sandus e sABCc os t i ng .I n oneofi t si ndi r e c tc os tpool s ,s e t upc os t sa nddi s t r i but i onc os t sa r epool e dt oge t he r .Cos t si nt hi spoolar e a l l oc a t e dus i ngnumbe rofc us t ome ror de r sf ort hee a s i ne s sofc os t i ngope r a t i ons .Ba s e dont he i nf or ma t i onpr ovi de d, whi c hoft hef ol l o wi ngar gume nt si sva l i d? A)J ohns onha sc l e a r l yf a i l e dt oi de nt i f ya sma nydi r e c tc os t sa si se c onomi c a l l yf e a s i bl e . 4 Copyright © 2018 Pearson Education, Ltd.

B)Al lc os t si nahomo ge ne ousc os tpoolha vet hes a meoras i mi l a rc a us e a nde ffe c tr e l a t i ons hi pwi t ht he s i ngl ec os tdr i ve rt ha ti sus e da st hec os t a l l oc a t i onba s ef orJ ohns on. C)J ohns onha sunne c e s s a r i l ywa s t e dr e s our c e sb yc l a s s i f yi ngs e t upa nddi s t r i but i onc os t sa st he yc oul d ha v ebe e nc ons i de r e da sdi r e c tc os t s . D)J ohns onha sf a i l e dt ous et hec or r e c tc os tdr i ve rast hec os t a l l oc a t i onba s ef ors e t upc os t s . Ans we r :D Di ff: 1 Obj e c t i ve :2 AACSB:Appl i c a t i onofknowl e dge

6 )I nc r e a s e dus e dofa ut oma t i on,c omput e ri nt e gr a t e dma nuf a c t ur i ng,a ndut i l i z a t i onofr obot sha vel e a d t oa ni nc r e a s ei ni ndi r e c tc os t sr e l a t i vet odi r e c tc os t s . Ans we r :TRUE Di ff: 2 Obj e c t i ve :2 AACSB:Anal yt i c a lt hi nki ng

7 )Mode r nma nuf a c t ur i ngpr a c t i c e sha v ehe l pe dr e duc eove r he a dc os t sr e l a t i vet odi r e c tc os t sa st he r e l i a nc eons uppor tr e s our c e ss uc ha ss c he dul i ng,de s i gn,a nde ngi ne e r i ngha sdi mi ni s he d. Ans we r :F ALSE Ex pl a na t i on:Ma na gi ngc ompl e xt e c hnol ogyandpr oduc i ngdi ve r s epr oduc t sr e qui r ea ddi t i ona ls uppor t f unc t i onss uc ha spr oduc t i ons c he dul i ng,pr oduc ta ndpr oc e s sde s i gn,a nde ngi ne e r i ng. Di ff: 1 Obj e c t i ve :2 AACSB:Anal yt i c a lt hi nki ng

8 )I ndi r e c tl a bora nddi s t r i but i onc os t swoul dmos tl i ke l ybei nt hes a mea c t i vi t yc os tpool . Ans we r :F ALSE Ex pl a na t i on:I ndi r e c tl a bora nddi s t r i but i onc os t swoul dno tbei nt hes a mea c t i vi t yc os tpoolbe c a us e t he i rc os tdr i ve r sa r ev e r ydi s s i mi l a r .Ac os tdr i ve rofi ndi r e c tl a borwoul di nc l udedi r e c tl aborhour s , whi l eac os tdr i ve rofdi s t r i but i onc os t swoul di nc l ude ,f ore x a mpl e ,c ubi cf e e tofc a r gomove d. Di ff: 2 Obj e c t i ve :2 AACSB:Anal yt i c a lt hi nki ng

9 )Ma na ge r ss houl dl ookf ore vi de nc eofc a us e a nde ffe c twhe nc hoos i ngac os tdr i ve rwi t ht hedr i ve r be i ngt hec aus ea ndt hee ffe c tbe i ngt hec os ti nc ur r e d. Ans we r :TRUE Di ff: 1 Obj e c t i ve :2 AACSB:Anal yt i c a lt hi nki ng

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1 0 )I de nt i fic a t i onofac os t a l l oc a t i onba s ei snotac r i t i c a le l e me ntwhe nus i ngas t r a t e gyt ha twi l lr e finea c os t i ngs ys t e m. Ans we r :F ALSE Ex pl a na t i on:Ma na ge r sr e finet he i rc os ts ys t e msbyl ooki ngf ore ffe c t i vec os t =a l l oc a t i onba s i s( c os tdr i ve r ) a nds e e ke vi de nc eofc a us e a nde ffe c twhe nc hoos i ngac os tdr i ve rwi t ht hedr i ve rbe i ngt hec a us ea ndt he e ffe c tbe i ngt hec os ti nc ur r e d. Di ff: 1 Obj e c t i ve :2 AACSB:Anal yt i c a lt hi nki ng

1 1 )Wha tar et hef a c t or st ha ta r ec a us i ngma nyc ompa ni e st or e finet he i rc os t i ngs ys t e mst oobt a i nmor e a c c ur a t eme a s ur e soft hec os t soft he i rpr oduc t s ? Ans we r :Thefir s tc a us ei si nc r e a s i ngpr oduc tdi ve r s i t y .Compa ni e sar epr oduc i ngma nymor epr oduc t s t ha nt he yus e dt o ,pl a c i ngs t r a i nsonmor es i mpl e ,ol de rc os ts ys t e ms .A s e c ondc a us ei st heove r a l l i nc r e a s e di ni ndi r e c tc os t sa ndt her e l a t i vede c l i neofdi r e c tc os t s .Thei ndi r e c tna t ur eoft he s ec os t s r e qui r e sa l l oc a t i on,a nda nyi na c c ur a c i e si na l l oc a t i onoft he s ec os t sbe c omema gni fie da st he s ei ndi r e c t c os t si nc r e a s e .A t hi r dc a us ewoul dbea dva nc e si ni nf or ma t i ont e c hnol ogyt ha tma ke sc ompl e xa l l oc a t i on ofi ndi r e c tc os t sl e s sbur de ns ome .Fi na l l y ,i nc r e a s e dc ompe t i t i onf r om bot hna t i ona la ndi nt e r na t i ona l c ompe t i t or sha sr e s ul t e di nmor epr e s s ur et or e duc ec os t s , aswe l lasi nc r e a s i ngt hene e df ora ndva l ueof i nf or ma t i ont os uppor tr e s pons e st ot he s ene wt hr e a t s . Di ff: 2 Obj e c t i ve :2 AACSB:Anal yt i c a lt hi nki ng

5 . 3 Obj e c t i ve5 . 3 1 )ABCs ys t e msc r e a t e_ _ _ _ _ _ _ _ . A)onel a r gec os tpool B)homo ge ne ousa c t i vi t yr e l a t e dc os tpool s C)a c t i vi t yc os tpool swi t habr oa df oc us D)a c t i vi t yc os tpool sc ont a i ni ngma nydi r e c tc os t s Ans we r :B Di ff: 1 Obj e c t i ve :3 AACSB:Anal yt i c a lt hi nki ng

2 )Ac t i vi t yba s e dc os t i ngs ys t e m di ffe r sf r om t r a di t i ona lc os t i ngs ys t e msi nt het r e a t me ntof_ _ _ _ _ __ _ . A)di r e c tl aborc os t s B)di r e c tma t e r i a lc os t s C)pr i mec os t s D)i ndi r e c tc os t s Ans we r :D Di ff: 1 Obj e c t i ve :3 AACSB:Anal yt i c a lt hi nki ng

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3 )Thef undame nt a lc os tobj e c t sofABCa r e_ _ _ _ _ _ _ _ . A)a c t i vi t i e s B)c os tdr i ve r s C)pr oduc t s D)s e r vi c e s Ans we r :A Di ff: 2 Obj e c t i ve :3 AACSB:Anal yt i c a lt hi nki ng

4 )Whi c hoft hef ol l o wi ngs t a t e me nt si st r ueofa c t i vi t yba s e dc os t i ng ? A)I na c t i vi t y ba s e dc os t i ng, di r e c tl a bor hour si sa l wa yst hebe s ta l l oc a t i onba s et oa l l oc a t ea l lnonma nuf a c t ur i ngi ndi r e c tc os t s . B)Ac t i vi t yba s e dc os t i ngi smor es ui t e dt oc ompani e swi t hhi ghpr oduc tdi ve r s i t yt ha nc ompa ni e swi t h s i ngl epr oduc tl i ne . C)Ac t i vi t yba s e dc os t i ngbr oadl ya ve r a ge sors pr e a dst hec os tofr e s our c e suni f or ml yt oc os tobj e c t ss uc h a spr oduc t sors e r vi c e s . D)Thema i na dva nt a g eofa c t i vi t yba s e dc os t i ngove rpe a nut but t e rc os t i ngi st hea c c ur a t edi s t r i but i onof a l ldi r e c tc os t st ot hepr oduc t s . Ans we r :B Di ff: 2 Obj e c t i ve :3 AACSB:Anal yt i c a lt hi nki ng

5 )A s i ngl ei ndi r e c t c os tr a t edi s t or t spr oduc tc os t sbe c a us e__ _ _ _ _ _ _ . A)t he r ei sa nas s umpt i ont ha ta l ls uppor ta c t i vi t i e sa ffe c ta l lpr oduc t si nauni f or m wa y B)i tr e c ogni z e ss pe c i fica c t i vi t i e st ha tar er e qui r e dt opr oduc eapr oduc t C)c ompe t i t i vepr i c i ngi si gnor e d D)i ta s s ume sa l lc os t sa r epr oduc tc os t s Ans we r :A Di ff: 2 Obj e c t i ve :3 AACSB:Anal yt i c a lt hi nki ng

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6 )Ext r a c t sf r om c os ti nf or ma t i onofHe ba rCor p. : S i mpl eL3 Pa c k Se t upc os ta l l oc a t e dus i ngdi r e c tl a bor hour s $ 1 9 , 2 5 0 Se t upc os ta l l oc a t e dus i ngs e t uphour s $ 1 3 , 4 0 0

T ot a l Compl e xL7Pa c k $ 5 , 7 5 0 $ 2 5 , 0 0 0 $ 1 1 , 6 0 0 $ 2 5 , 0 0 0

As s umi ngt ha ts e t uphour si sc ons i de r e damor ee ffe c t i vec os tdr i vef ora l l oc a t i ngs e t upc os t st ha ndi r e c t l a bor hour s .Whi c hoft hef ol l o wi ngs t a t e me nt si st r ueofHe ba r ' ss e t upc os t sunde rt r a di t i ona lc os t i ng? A)L3pa c ki sunde r c os t e db y$ 5 , 8 5 0 B)L7pa c ki sunde r c os t e db y$ 5 , 7 5 0 C)L3pa c ki so ve r c os t e db y$ 5 , 8 5 0 D)L7pa c ki sove r c os t e dby$ 5 , 8 5 0 Ans we r :C Ex pl a na t i on:Se t upc os ta l l oc a t e dus i ngdi r e c tl a bor hour s-S e t upc os ta l l oc a t e dus i ngs e t uphour s =$ 1 9 , 2 5 0−$ 1 3 , 4 0 0=$ 5 , 8 5 0 Di ff: 2 Obj e c t i ve :3 AACSB:Appl i c a t i onofknowl e dge

7 )Whi c hoft hef ol l o wi ngi st r uewi t ha c t i vi t yba s e dc os ta c c ount i ng ? A)Ac t i vi t yba s e dc os t i ngi gnor e st hea l l oc a t i onofma r ke t i nga nddi s t r i but i onc os t s . B)Ac t i vi t yba s e dc os t i ngi smor el i ke l yt or e s ul ti nma j ordi ffe r e nc e sf r om t r a di t i ona lc os t i ngs ys t e msi f t hefir m ma nuf a c t ur e sonl yonepr oduc tr a t he rt ha nmul t i pl epr oduc t s . C)Thef oc usi sona c t i vi t i e st ha ta c c ountf oras i z a bl ef r a c t i onofi ndi r e c tc os t s. D)Cha nc e sofpr oduc t c os tc r os s s ubs i di z a t i ona r ehi ghe ri na c t i vi t y ba s e dc os t i ngc ompa r e dt o t r a di t i ona lc os t i ngs ys t e ms . Ans we r :C Di ff: 2 Obj e c t i ve :3 AACSB:Anal yt i c a lt hi nki ng

8 )Ac t i vi t yba s e dc os t i ng( ABC)c ane l i mi na t ec os tdi s t or t i onsbe c a us eABCs ys t e ms__ _ _ _ _ _ _ . A)e s t abl i s hac a us e a nde ffe c tr e l a t i ons hi pwi t ht hea c t i vi t i e spe r f or me d B)us es i ngl ec os tpoolf ora l lo ve r he a dc os t s , t he r e b ye na bl i ngs i mpl i c i t y C)us eabr oa da ve r a get oa l l oc a t ea l love r he a dc os t s D)ne ve rc ons i de ri nt e r ac t i onsbe t we e ndi ffe r e ntde pa r t me nt si na s s i gni ngs uppor tc os t s Ans we r :A Di ff: 2 Obj e c t i ve :3 AACSB:Anal yt i c a lt hi nki ng

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9 )Whe n" a v a i l a bl et i me "( i . e . ,s e t uphour s )i sus e dt oc a l c ul a t eac os tofar e s our c ea ndt oa l l oc a t ec os t st o c os tobj e c t s, t hes ys t e mi sc a l l e d: A)j obc os t i ng B)pr oc e s sc os t i ng C)hybr i dc os t i ng D)t i me dr i v e na c t i vi t yba s e dc os t i ng Ans we r :D Di ff: 2 Obj e c t i ve :3 AACSB:Anal yt i c a lt hi nki ng

1 0 )Ext r e meManuf a c t ur i ngCompa nypr o vi de st hef ol l owi ngABCc os t i ngi nf or ma t i on: Ac t i vi t i e s Tot a lCos t s Ac c ounti nqui r y $ 3 2 0 , 0 0 0 Ac c ountbi l l i ng $ 2 0 0 , 0 0 0 Ac c ountve r i fic a t i ona c c ount s $ 1 7 3 , 2 5 0 Cor r e s ponde nc el e t t e r s $ 2 4 , 0 0 0 T ot a lc os t s $ 7 1 7 , 2 5 0

Ac t i vi t yc os tdr i ve r s 1 6 , 0 0 0hour s 4 , 0 0 0 , 0 0 0l i ne s 7 0 , 0 0 0a c c ount s 4 , 0 0 0l e t t e r s

Thea bo vea c t i vi t i e sa r eus e db yDe pa r t me nt sA ...