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Multiple Choice Quiz
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1
A traditional product-costing system, in which a single cost driver is used to assign overhead costs to products, is often referred to as which of the following?
A)Activity-based costing system
B)Through-put costing system
C)Volume-based costing system
D)Either (B) or (C)
E)None of the above
2
Stage one of an activity-based costing (ABC) system involves which of the following?
A)Identifying cost drivers
B)Computing pool rates
C)Identifying activity cost pools
D)Both A and B
E)All of the above
3
Identify the true statement(s) below.
A)A volume based costing system will typically utilize more cost drivers than an activity based costing system.
B)An activity based costing system will typically utilize more cost drivers than a volume based costing system.
C)A volume based costing system will typically utilize more cost pools than an activity based costing system.
D)The number of cost pools and cost drivers does not typically differ significantly between an activity based costing system and a volume based costing system.
E)Both A and C are true.
4
Goose Island Brewery, was a pioneer in the U.S. craft beer industry. They are based out of Chicago, Illinois and manufacture numerous types of ale ranging from classic and seasonal varieties to heavier dark ales reminiscent of European varieties. The production in a brewery is typically divided into 7 steps: Mashing, Lautering, Boiling, Fermenting, Conditioning, Filtering, and Filling.

Mashing is the process of mixing milled grain (typically malted grain) with water, and heating this mixture up with rests at certain temperatures to allow enzymes in the malt to break down the starch in the grain into sugars, typically maltose. The exact mix of grain (and type of grain) will be different depending on the batch of beer being produced. Small variations in the recipe can have a significant impact on the flavor of the beer.

Lautering is the separation of the extracts won during mashing from the spent grain to create wort.

Boiling ensures sterility, and thus prevents infections. During the boil hops are added as appropriate. The hops contribute bitterness, aroma and flavor compounds to the beer.

Fermentation, as a step in the brewing process, starts as soon as yeast is added to the cooled wort. Because this is the step in which the sugars are metabolized into alcohol it is also the point at which the product is first called beer.

Conditioning: When the sugars in the fermenting beer have been almost completely digested, the fermentation slows down and the yeast starts to settle to the bottom of the tank. At this stage, the beer is cooled to around freezing, and the beer's flavor becomes smoother. Pressure is maintained on the tanks to prevent the beer from going flat.

Filtering the beer stabilizes the flavor, and gives beer its polished shine and brilliance.

Filling (a.k.a. "packaging") is putting the beer into the containers in which it will leave the brewery. The containers are usually bottles, cans, or kegs; sometimes bulk tanks are used for high-volume customers.

The boiling process would be considered a __________ activity.
A)batch-level
B)product-sustaining-level
C)facility-level
D)unit-level
E)all of the above
5
Goose Island Brewery, was a pioneer in the U.S. craft beer industry. They are based out of Chicago, Illinois and manufacture numerous types of ale ranging from classic and seasonal varieties to heavier dark ales reminiscent of European varieties. The production in a brewery is typically divided into 7 steps: Mashing, Lautering, Boiling, Fermenting, Conditioning, Filtering, and Filling.

Mashing is the process of mixing milled grain (typically malted grain) with water, and heating this mixture up with rests at certain temperatures to allow enzymes in the malt to break down the starch in the grain into sugars, typically maltose. The exact mix of grain (and type of grain) will be different depending on the batch of beer being produced. Small variations in the recipe can have a significant impact on the flavor of the beer.

Lautering is the separation of the extracts won during mashing from the spent grain to create wort.

Boiling ensures sterility, and thus prevents infections. During the boil hops are added as appropriate. The hops contribute bitterness, aroma and flavor compounds to the beer.

Fermentation, as a step in the brewing process, starts as soon as yeast is added to the cooled wort. Because this is the step in which the sugars are metabolized into alcohol it is also the point at which the product is first called beer.

Conditioning: When the sugars in the fermenting beer have been almost completely digested, the fermentation slows down and the yeast starts to settle to the bottom of the tank. At this stage, the beer is cooled to around freezing, and the beer's flavor becomes smoother. Pressure is maintained on the tanks to prevent the beer from going flat.

Filtering the beer stabilizes the flavor, and gives beer its polished shine and brilliance.

Filling (a.k.a. "packaging") is putting the beer into the containers in which it will leave the brewery. The containers are usually bottles, cans, or kegs; sometimes bulk tanks are used for high-volume customers.

The filling process would be considered a __________ activity.
A)batch-level
B)product-sustaining-level
C)facility-level
D)unit-level
E)all of the above
6
Goose Island Brewery, was a pioneer in the U.S. craft beer industry. They are based out of Chicago, Illinois and manufacture numerous types of ale ranging from classic and seasonal varieties to heavier dark ales reminiscent of European varieties. The production in a brewery is typically divided into 7 steps: Mashing, Lautering, Boiling, Fermenting, Conditioning, Filtering, and Filling.

Mashing is the process of mixing milled grain (typically malted grain) with water, and heating this mixture up with rests at certain temperatures to allow enzymes in the malt to break down the starch in the grain into sugars, typically maltose. The exact mix of grain (and type of grain) will be different depending on the batch of beer being produced. Small variations in the recipe can have a significant impact on the flavor of the beer.

Lautering is the separation of the extracts won during mashing from the spent grain to create wort.

Boiling ensures sterility, and thus prevents infections. During the boil hops are added as appropriate. The hops contribute bitterness, aroma and flavor compounds to the beer.

Fermentation, as a step in the brewing process, starts as soon as yeast is added to the cooled wort. Because this is the step in which the sugars are metabolized into alcohol it is also the point at which the product is first called beer.

Conditioning: When the sugars in the fermenting beer have been almost completely digested, the fermentation slows down and the yeast starts to settle to the bottom of the tank. At this stage, the beer is cooled to around freezing, and the beer's flavor becomes smoother. Pressure is maintained on the tanks to prevent the beer from going flat.

Filtering the beer stabilizes the flavor, and gives beer its polished shine and brilliance.

Filling (a.k.a. "packaging") is putting the beer into the containers in which it will leave the brewery. The containers are usually bottles, cans, or kegs; sometimes bulk tanks are used for high-volume customers.

Goose Island is well known for producing its annual Christmas Ale variety. This seasonal offering is typically a complex brown ale that develops well in the bottle for up to five years. Each season's ale is unique in that the recipe is changed slightly providing their loyal customer base with something special to look forward to each year. Before deciding on a particular season's offering Goose Island incurs costs associated with developing and testing potential holiday recipes.

This process would be considered a __________ activity.
A)batch-level
B)product-sustaining-level
C)facility-level
D)unit-level
E)all of the above
7
Goose Island Brewery, was a pioneer in the U.S. craft beer industry. They are based out of Chicago, Illinois and manufacture numerous types of ale ranging from classic and seasonal varieties to heavier dark ales reminiscent of European varieties. The production in a brewery is typically divided into 7 steps: Mashing, Lautering, Boiling, Fermenting, Conditioning, Filtering, and Filling.

Mashing is the process of mixing milled grain (typically malted grain) with water, and heating this mixture up with rests at certain temperatures to allow enzymes in the malt to break down the starch in the grain into sugars, typically maltose. The exact mix of grain (and type of grain) will be different depending on the batch of beer being produced. Small variations in the recipe can have a significant impact on the flavor of the beer.

Lautering is the separation of the extracts won during mashing from the spent grain to create wort.

Boiling ensures sterility, and thus prevents infections. During the boil hops are added as appropriate. The hops contribute bitterness, aroma and flavor compounds to the beer.

Fermentation, as a step in the brewing process, starts as soon as yeast is added to the cooled wort. Because this is the step in which the sugars are metabolized into alcohol it is also the point at which the product is first called beer.

Conditioning: When the sugars in the fermenting beer have been almost completely digested, the fermentation slows down and the yeast starts to settle to the bottom of the tank. At this stage, the beer is cooled to around freezing, and the beer's flavor becomes smoother. Pressure is maintained on the tanks to prevent the beer from going flat.

Filtering the beer stabilizes the flavor, and gives beer its polished shine and brilliance.

Filling (a.k.a. "packaging") is putting the beer into the containers in which it will leave the brewery. The containers are usually bottles, cans, or kegs; sometimes bulk tanks are used for high-volume customers.

Goose Island depreciates their stainless steel fermentation vessels using the straight line method with a useful life of 7 years. The incurrence of depreciation would be considered a __________ activity.
A)batch-level
B)unit-level
C)facility-level
D)product-sustaining-level
E)none of the above
8
Which is the proper order of ABC calculations during the completion of stage two of an ABC system when there are diverse product lines?
A)(1) Compute the pool rate, (2) compute total activity cost for each product line, and (3) compute product cost per unit for each product line.
B)(1) Compute total activity cost for each product line, (2) compute the pool rate, and (3) compute product cost per unit for each product line.
C)(1) Compute product cost per unit for each product line, (2) compute the pool rate, and (3) compute total activity cost for each product line.
D)(1) Compute product cost per unit for each product line, (2) compute total activity cost for each product line, and (3) compute the pool rate.
E)(1) Compute product cost per unit for each product line, (2) compute the pool rate, and (3) compute the cost driver.
9
Consider the following schedule of information for two products: Cups and Dishes:
<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078110912/856414/ch5_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"> (19.0K)</a>
Determine the pool rate for the shaping-related activity.
A)$3.00 per machine hour
B)$3.24 per machine hour
C)$1.56 per machine hour
D)$1.65 per machine hour
E)Cannot be determined from the information provided
10
Consider the following schedule of information for two products: Cups and Dishes:
<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078110912/856414/ch5_10.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"> (19.0K)</a>
Determine the shaping cost (activity cost) per unit for Cups.
A)$3.00
B)$7.50
C)$6.00
D)$5.00
E)$2.50
11
Which of the following should be considered when choosing the proper cost-driver bases?
A)Cause and effect relationship between the activity and the cost
B)Cost-benefit trade offs
C)Behavioral effects
D)All of the above
E)None of the above
12
Which is a complete listing of activities identified and used in ABC analysis?
A)Bill of activities
B)Activity dictionary
C)Storyboarding
D)Paper trail
E)None of the above
13
Customer-profitability analysis uses which of the following to determine the costs and profit associated with serving particular customers?
A)Volume-based costing
B)Through-put costing
C)Activity-based costing
D)Activity-based management
E)None of the above
14
Consider the following schedule for three types of patient visits:
<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078110912/856414/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"> (24.0K)</a>
Determine the pool rate for physician-time related activity.
A)$6.40 per patient minute
B)$5.00 per patient minute
C)$59.14 per patient minute
D)$12.35 per patient minute
E)$4.60 per patient minute
15
Consider the following schedule for three types of patient visits:
<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078110912/856414/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"> (23.0K)</a>
The pool rate for the physician-time activity is $4.60 per patient minute (the cost driver). Determine the cost of physician time (activity cost) per visit for Extended Visits.
A)$40.00
B)$46.00
C)$92.00
D)$51.43
E)$86.00





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