Assignment
1. SLOW Company has determined the following information about a new product. The manufacturing process used for the product is very complex and it has a higher proportion of indirect costs than direct costs. The company wants a 100% markup on cost. The following data is available: Product cost according to traditional costing system............ $4.00 per unit Product cost according to activity-based costing system...... $7.00 per unit What price per unit should SLOW Company use for this new product?
A) $8.00
B) $4.00
C) $14.00
D) $7.00
2. ________ is a name for a system that first accumulates indirect resource costs for each of the activities of An organization and then assigns the cost of each activity to the cost objects that require that activity.
A) Activity-based costing B) Activity-based allocation
C) Cost accounting D) Activity-based management
3. Physically tracing ________ costs is usually straightforward, but allocating ________ costs is usually more complex.
A) Indirect; direct
B) Direct; product
C) Direct; indirect
D) unallocated; indirect
4. _______is the name for a system that first accumulates indirect resource cost for each of the activities of an organization and then assigns the cost of each activity to the cost objects that require that activity
A) activity-based management B) cost accounting
C) activity-basedallocation D) activity-based costing
5. Which of the following statements is false?
A) Cost drivers can be expressed in dollar amounts
b)Traditional cost systems generally assigned only production costs to products
C) Traditional cost systems work well with simple production and operating systems
D) Only one cost driver is acceptable when indirect manufacturing costs are a large proportion of total cost
6.Which purpose of cost allocation usually dominate most business situations?
A)to predict the economic effects of strategic and operational control decisions
B)to compute income and asset valuation for financial reporting
C)to justify costs or obtain reimbursement
D)to give feedback for performance evaluation
7. The hospital radiology department has the following activities...
1 repair X-ray equipment
2 to answering patient's questions
3 wait time between patients
4 repeating an x-ray because the x-ray technician forgot to load the film in the X-ray equipment
Which activity is a value-added activity?
a) Activity 1 B) Activity 2 C) Activity 3 D) Activity 4
8. What is an example of using cost information for operational control?
A) Selection of value chain function to emphasize in corporate mission
B) The evaluation of process Improvement efforts in the manufacturing process
C) To determine of cost of goods sold for an income statement
D) Identification of capital assets to acquire for expansion purposes.