Which is not an example of a cost driver?

General and administrative expenses.
Machine hours.
Number of inspections.
Number of different customers.

Which of the following statement accurately describes activity-based costing (ABC)?

ABC considers the entire plant to be one cost pool.
ABC uses a separate cost pool for each department.
ABC uses a cost pool for each activity center.
ABC uses a cost pool for each industry.

Thefirststep in activity-based costing (ABC) is to

identify the activities that consume resources, and assign costs to those activities.
identify the cost driver(s) associated with each activity.
compute a cost rate per cost driver unit.
assign costs to products by multiplying the cost driver rate by the volume of cost drivers consumed by the product.

Managers usually decide which cost driver to use based upon which of the following factors?

Causal relation.
Cost considerations.
Generally accepted costing techniques.
Uniform cost driver standards.

The new quality-based view includes which of the following?

waiting for inspections of finished products.
reworking defective goods.
establishing quality at the beginning of the process.
incurring less than 3 percent defects is a reasonable goal.

Managers usually decide which cost driver to use based upon which of the following factors?

Causal relation.
Cost considerations.
Generally accepted costing techniques.
Uniform cost driver standards.

The new quality-based view includes which of the following?

waiting for inspections of finished products.
reworking defective goods.
establishing quality at the beginning of the process.
incurring less than 3 percent defects is a reasonable goal.

Which of the following statements is true?

In the long run the price of a product must cover its costs or the organization will no longer make the product.
In the long run the price of a product must cover its sunk costs or the organization will no longer make the product.
In the long run the price of a product must cover its internal failure costs or the organization will no longer make the product.
In the long run the price of a product must cover its external failure costs or the organization will no longer make the product.

Which of the following terms describe the level of activity over which the firm expects a set of cost behaviors to be consistent?

marginal activity.

range of opportunity.

relevant range.

margin of safety.

The best use by managers of cost behavior patterns is to

estimate how activities affect costs and forecast costs.

estimate how activities affect subordinate behavior.

control subordinate behavior.

reward and punish subordinates.

Even if a firm shuts down, the firm still incurs some capacity costs called

committed costs.

programmed costs.

managed costs

All of the answers are correct.

Costs that will continue regardless of production level are

capacity costs.

committed costs.

discretionary costs.

opportunity costs.

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What does the experience curve function show?

The amount of time required to perform a task goes up per unit as the number of units increases.

The amount of time required to perform a task goes up per unit as the number of units decreases.

The amount of time required to perform a task goes down per unit as the number of units increases.

The amount of time required to perform a task goes down per unit as the number of units decreases.

J-Mobile provides cellular phone and Internet services with a plan that provides up to 1,000 minutes of airtime usage for a flat rate of $99.99 per month plus a charge for any minutes used over this amount at the rate of $0.10 per minute in excess of the minimum 1,000 airtime minutes. Which of the following describes the cost of the J-Mobile service?

fixed cost, only.

variable cost, only.

mixed cost.

semi-fixed cost.

PB Investigators LLC hires one private investigator for every 5 clients. The annual salary for each private investigator is $60,000 per year. The cost to PB Investigators LLC for investigators is known as which of the following?
PB Investigators LLC hires one private investigator for every 5 clients. The annual salary for each private investigator is $60,000 per year. The cost to PB Investigators LLC for investigators is known as which of the following?

fixed cost.

variable cost.

mixed cost.

step cost.

In considering a special order that will enable a company to make use of presently idle capacity, which of the following costs would be irrelevant?

Materials

Depreciation

Direct Labor

Variable Overhead

Which of the following influences should not be considered in short-run pricing decisions?

The value customers place on the product

The pricing strategies of competitors

The costs of the product

Total fixed costs allocated to the specific product

The product life cycle lasts from

obtaining financing through paying off investors.

product design through product termination.

initial research and development through termination of customer support.

None of the answers is correct.

Which statement is true concerning target costing?

Target costing is setting price below costs in the short run to drive out competitors.

Target costing is the systematic evaluation of all costs relevant to a decision.

Target costing is the concept of price-based costing.

None of the answers is correct.

Which of the following represents the margin of safetyin units?

The excess of projected (or actual) sales units over the break-even unit sales level.

The excess of projected (or actual) sales price per unit over the break-even sales price in units.

The excess of projected (or actual) cost of sales in units over the break-even costs of sales level in units.

None of the answers is correct.

A cost that changes as a result of changing activitiesor levels of activities is called which of the following?

product cost.

department cost.

batch cost.

differential cost.

The CVP model is one example of a financial model that can be used to calculate which of the following?

required selling price and conduct sensitivity analysis.

new break-even points and calculate multiple break-even points.

target profit points and compare alternatives.

All of the answers are correct.

What happens to the contribution margin if fixed expenses decrease while variable cost per unit remain constant.

Contribution margin will be unchanged.

Contribution margin will be higher.

Contribution margin will be lower.

Cannot determine the change.

What does a quality control chart reflect?

The manager who is in charge on a particular day.

Process variations that need to be analyzed.

Which product is controlling the market.

Which employee is to engage in strategic cost management techniques.

What tools do firms use to identify quality control problems?

Control charts

Cause-and-effect analyses

Pareto charts

All of the answers are correct.

Which of the following is the appropriate procedure to apply overhead to production using normal costing?

Assign actual direct material and direct labor costs plus an amount, using a predetermined overhead rate of manufacturing overhead to products.

Assign "normal" direct material and direct labor costs plus an amount representing "normal" manufacturing overhead to products.

Assign actual direct material and direct labor costs plus an amount representing actual manufacturing overhead to products.

All of the answers are correct.

Which of the following is an example of an organization that would use job-order accounting?

a custom construction company.

an oil refinery.

a cereal processor.

None of the answers is correct.

What provides a systematic way for organizations to evaluate the processes that they use to produce goods and services for their customers?

Cost-benefit analysis

Activity analysis

Process evaluation and review technique

Flow charting

How are overhead costs accumulated in an activity-based costing system?

in a single, plant-wide pool.

by departments.

in pools established by identified cost drivers.

in facility-level activities.