Cost Accounting Systems
(B. Activity-Based Cost System)
B. ACTIVITY-BASED COST SYSTEM
D. all of the above
5. Primary concepts under activity-based management include all of the
following except:
A. activity analysis
C. activity-based costing
B. total quality management
D. cost driver analysis
THEORIES:
Outdated cost system
3. Symptoms of an outdated cost system include all of the following EXCEP
A. product costs change because of changes in financial reporting.
B. products that are difficult to produce show little profit.
C. competitors' prices appear unrealistically low.
D. the company has a highly profitable niche all to itself.
18. Which of the following falls under the Activity-Based Management umbrella?
Continuous
Business process
Activity-based
improvement
reengineering
costing
A. NO
NO
YES
B. YES
NO
NO
C. YES
YES
YES
D. NO
YES
NO
13. Which of the following is NOT a sign of poor cost data?
A. Competitors' prices for high-volume products appear much too high.
B. The company seems to have a highly profitable niche all to itself.
C. Customers don't balk at price increases for low-volume products.
D. Competitors' prices for low-volume products appear much too high.
Activity-based management
1. Which system focuses on the management of activities with the objective of
improving the value received by the customer and the profit received by
providing this value?
A. activity-based management
C. contemporary cost control
B. traditional cost management system D.
standard cost system
28. Activity-based management (ABM) is
A. a costing system in which multiple overhead cost pools are allocated
using bases that include one or more nonvolume related factors
B. a base used to allocate the cost of a resource to the different activities
using it
C. the use of information obtained from ABC to make improvements in the
firm
D. a base used to allocate the cost of an activity to products and customers
17. An objective of activity-based management is to
A. eliminate the majority of centralized activities in an organization.
B. reduce or eliminate non-value-added activities incurred to make a product
or provide a service.
C. institute responsibility accounting systems in decentralized organizations.
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29. All of the following are ways that activities can be managed to achieve
improvements in a process, except
A. activity induction
C. activity elimination
B. activity selection
D. activity sharing
Traditional Costing vs. ABC system
27. Which of the following is not a distinction between the traditional and ABC
costing systems
A. the number of overhead cost pools tends to be higher in ABC systems
B. the number allocation bases tend to be higher in ABC system
C. costs within an ABC cost pool tend to be more homogeneous than the
costs within a traditional system’s cost pool
D. all ABC systems are one-stage costing systems, while traditional systems
may be one- or two-stage
32. In contrast to a company that uses a single overhead rate, one that uses
activity-based costing
A. will have higher product costs than one using a single overhead rate.
B. cannot compute budget variances.
C. will incur additional costs for recordkeeping.
D. must have a preponderance of fixed overhead costs.
Activity-based costing