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If total overhead is allocated based on machine hours, how much overhead would be allocated to product A? |
| | A) | $1,400,000 |
| | B) | $314,360 |
| | C) | $400,000 |
| | D) | $628,710 |
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Assume overhead is allocated using ABC, how much overhead would be allocated to product B? |
| | A) | $1,257,440 |
| | B) | $1,173,000 |
| | C) | $733,500 |
| | D) | $628,720 |
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Which of the following best describes the impact of undercosting? |
| | A) | Undercosting all products allows for larger profit margins. |
| | B) | Companies use target pricing to undercost products. |
| | C) | Undercosting some products will lead to overcosting other products, which is an acceptable outcome. |
| | D) | Undercosting some products can lead to overcosting other products which may then become overpriced and lose market share. |
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| 4 | |
When establishing an Activity-Based Costing system, an organization's goal is to: |
| | A) | allocate costs to all activities within an organization. |
| | B) | define all activities within the organization and the costs required to perform those activities. |
| | C) | assign costs to pools according to the reasons the costs are assumed to be incurred. |
| | D) | allocate costs to products from pools where costs are accumulated based upon the activities that cause the costs to be incurred. |
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What components are included in voluntary costs? |
| | A) | Prevention and failure. |
| | B) | Prevention and appraisal |
| | C) | Failure and appraisal. |
| | D) | Internal and external failure. |
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 <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078025656/862057/ch5_6_7_8_9.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (28.0K)</a>]]>
Which of the following is considered to be a direct cost? |
| | A) | Machine maintenance |
| | B) | Machine utilities |
| | C) | Quality control |
| | D) | Wages of production workers |
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<![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078025656/862057/ch5_6_7_8_9.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (28.0K)</a>]]> Which of the following is considered to be a unit-level cost? |
| | A) | Machine set-ups |
| | B) | Machine maintenance |
| | C) | Material handling |
| | D) | Product engineering |
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<![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078025656/862057/ch5_6_7_8_9.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (28.0K)</a>]]> Which of the following is considered to be a product-level cost? |
| | A) | Machine maintenance |
| | B) | Rent of manufacturing space |
| | C) | Material handling |
| | D) | Product engineering |
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<![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078025656/862057/ch5_6_7_8_9.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (28.0K)</a>]]> If batch-level costs were allocated based upon machine set-ups, how much would be allocated to jeans? |
| | A) | $ 700,000 |
| | B) | $1,050,000 |
| | C) | $1,230,000 |
| | D) | $1,750,000 |
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| 10 | |
Which is the following is a difference between activity-based costing and traditional cost allocation? |
| | A) | Activity-based costing utilizes one-step and traditional cost allocation utilizes two-steps. |
| | B) | Activity-based costing utilizes two-steps and traditional cost allocation utilizes one-step. |
| | C) | Activity-based costing utilizes a cost allocation scheme that is based upon a departmental structure and traditional cost allocation utilizes a cost allocation scheme that is based upon activities. |
| | D) | Activity-based costing utilizes a cost allocation scheme that is based upon activities and traditional cost allocation utilizes a cost allocation scheme that is based upon a departmental structure. |
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Line "A" below depicts:  <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078025656/862057/ch5_11.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (7.0K)</a>]]>
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| | A) | total quality costs. |
| | B) | total profit. |
| | C) | total quality failure costs. |
| | D) | maximum quality. |
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Tyler wishes to produce 100% of their products 100% defect free. Which of the following statements is true? |
| | A) | Tyler should produce where total quality costs = total failure costs. |
| | B) | A more realistic assumption would be to minimize total quality costs. |
| | C) | Tyler should produce fewer products |
| | D) | Failure cost savings will pay for whatever it takes to reach Tyler's goal. |
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| 13 | |
Total quality management: |
| | A) | means managing to minimize total costs. |
| | B) | means managing to achieve high levels of customer satisfaction. |
| | C) | means managing to minimize high levels of customer satisfaction. |
| | D) | means managing to minimize total costs. |
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| 14 | |
Information regarding Durden Soap Manufacturing's overhead costs follows: <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078025656/862020/ch5_14.JPG','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (16.0K)</a>]]>
Activity measures for the two brands of bar soap follow: <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078025656/862043/ch5_1a4.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (11.0K)</a>]]>
What is the total amount of overhead allocated to fat-free soap if Durden uses ABC costing? |
| | A) | $324 |
| | B) | $4,078 |
| | C) | $6,024 |
| | D) | None of the above |
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Information regarding Durden Soap Manufacturing overhead costs follows: <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078025656/862043/ch5_15.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (17.0K)</a>]]>
Activity measures for the two brands of bar soap follow: <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078025656/862043/ch5_15a.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (10.0K)</a>]]>
What is the cost per bar of fat-free soap if Durden uses ABC costing? |
| | A) | $ .84575 Per Bar |
| | B) | $1.8445 Per Bar |
| | C) | $8.46 Per Bar. |
| | D) | $84.60 Per Bar. |
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