Question :
69.Which of the following steps not involved in the ABC : 1302765
69.Which of the following steps is not involved in the ABC approach?
A.Identify activities that cause costs to be incurred.
B.Allocate costs to products based on activity usage.
C.Group costs of activities into cost pools.
D.Improve processes based on benchmarking.
70.How many distinct activities are used by most companies that design ABC systems?
A.Fewer than 3
B.3 to 10
C.11 to 24
D.25 to 100
71.Happy Foods uses ABC costing. Which of the following is most likely to be a cost driver for the cost of cashiering at a convenience store?
A.Cost of items purchased
B.Direct labor cost
C.Number of customers processed
D.Number of employees handling the job
72.Which of the following is generally true when a company compares activity-based costing (ABC) and traditional volume-based costing?
A.ABC uses fewer cost drivers in an effort to reduce total costs.
B.ABC allocates costs based primarily on production volume.
C.ABC is less expensive.
D.ABC is less likely to undercost complex, low-volume products.73.Which of the following is not an advantage of activity-based costing over traditional volume-based costing systems?
A.ABC may lead to cost control improvement as managers are charged for using activities.
B.ABC is less likely than a traditional system to undercost complex, low-volume products.
C.ABC is less costly to implement than traditional systems.
D.ABC allows managers to get an understanding of the cost of their respective department’s activities.
74.What is the major difference between ABC and ABM?
A.ABC is used in managerial accounting, while ABM is used in financial accounting.
B.ABC focuses on measurement, while ABM focuses on control.
C.The goal of ABC is to accurately control costs, while the goal of ABM is to allocate costs most effectively to cost objectives.
D.There is no difference; ABC and ABM are two names for the same thing.
75.Activity-based management
A.is the management of activities that cause costs.
B.requires cost pools to be formed consisting of costs that are homogenous in nature.
C.allocates costs in a cause and effect manner to cost objectives.
D.is a method of allocating direct costs to cost objectives.
*76.Which one of the following lists the major steps in activity-based management in the correct order?
A.Determine major activities, form cost pools, evaluate the performance of the activities, and identify ways to improve the activities
B.Determine major activities, identify resources used by each activity, evaluate the performance of the activities, and identify ways to improve the activities
C.Determine major activities, identify ways to improve the activities, evaluate the performance of the activities, and identify resources used by each activity
D.Determine major activities, evaluate the performance of activities, form cost pools, and identify ways to improve the activities
77.Teal Sports offers 2 different types of water sport activities—sailfish rental and banana boat rides. The company has two different activities—lifeguarding and maintenance—that provide input into its cost objectives. Data on estimated overhead for the year follows:
ActivityDriverEstimated
Overhead CostSailfish Rental EstimateBoat Rides Estimate
Lifeguarding# of Labor hours$63,9403,280 hours2,280 hours
MaintenanceHours of riding time$88,0001,500 hours2,500 hours
What overhead rates will be used in each department to assign costs to the banana boat rides?
LifeguardingMaintenance
A.$28.04$22.00
B.$11.50$22.00
C.$28.04$35.20
D.$11.50$35.20
78. Terrel Gifts produces logo platters and cups bearing the name of the city in which the items will be sold to tourists. Indirect logo printing costs are allocated to platters and cups based on the amount of time spent on the logo machine. The company has budgeted logo costs of $4,224 per month and expects to spend 4,800 hours on the printing logos each month. Each platter uses 24 minutes and each cup spends 6 minutes on the logo machine. How much of the logo printing costs will be allocated to each platter?
A.$0.35
B.$0.88
C.$21.12
D.$8.12
