Question 1

Match each item with the correct statement below.
a.
activity analysis
b.
value-added costs
c.
velocity
d.
activity inputs
e.
activity output measure
f.
activity output
-Process that answers the question "How many people perform the activities?"

Accepted Answer

Activity analysis is the process of breaking down activities into smaller parts to measure the time and resources required for each task and answer the question of how many people perform the activities.

Answer: E
 Activity output measures are quantitative measures of the outputs of an activity, such as the number of units produced, hours worked, or customers served. This information is used to determine the resources required to perform the activity.

Answer: F
 Activity outputs are the goods or services produced by an activity. Output measures are used to determine the efficiency of the activity, which can help identify opportunities for improvement.

The other options are not relevant to the question of how many people perform activities. Value-added costs refer to the costs of activities that add value to a product or service. Velocity refers to the speed at which an activity is performed. Activity inputs are the resources required to perform an activity.

Question 2

Match each item with the correct statement below.
a.
cycle time
b.
direct tracing
c.
activity sharing
d.
driver tracing
e.
value-added activities
f.
activity selection
-Cost assignment method used for a cost of a resource that is exclusively used by an activity.

Accepted Answer

Direct tracing is the cost assignment method used for a cost of a resource that is exclusively used by an activity.

Answer: D 
 Driver tracing is used for assigning costs of resources that are used by multiple activities but can be traced to each activity based on usage.

Answer: C 
 Activity sharing is used when a cost is shared by two or more activities and cannot be exclusively assigned to any one of them.

Answer: E 
 Value-added activities are those that add value to the final product or service, resulting in an increase in its market value.

Answer: F 
 Activity selection involves selecting the activities that will be considered for cost analysis and management to improve efficiency and reduce costs.

Answer: A 
 Cycle time is the amount of time it takes to complete a process, from start to finish. It can be used to identify bottlenecks and inefficiencies in a process. It is not a cost assignment method.

Question 3

A ____________________ is classified as value-added provided it simultaneously meets three conditions.

Accepted Answer

The answer of A ____________________ is classified as value-added provided...

Question 4

Match each item with the correct statement below.
a.
activity analysis
b.
value-added costs
c.
velocity
d.
activity inputs
e.
activity output measure
f.
activity output
-The number of times an activity is performed.

Accepted Answer

The answer of Match each item with the correct statement...

Question 5

Match each item with the correct statement below.
a.
cycle time
b.
direct tracing
c.
activity sharing
d.
driver tracing
e.
value-added activities
f.
activity selection
-Increases the efficiency of necessary activities by using economies of scale.

Accepted Answer

Activity sharing refers to the practice of combining several activities with similar processing requirements into one larger activity, thereby increasing processing efficiency and reducing cycle time through economies of scale.

Answer: E 
 Value-added activities are those that add value to a product or service from a customer perspective. By identifying and streamlining these activities, an organization can reduce cycle time and improve overall efficiency.

Other options:
A) Cycle time refers to the time it takes to complete a process or activity. While reducing cycle time can improve efficiency, it doesn't necessarily involve economies of scale.
B) Direct tracing and driver tracing are methods for identifying costs associated with specific products or services, but they don't directly relate to improving efficiency.
F) Activity selection involves choosing which activities to perform based on their importance to organizational goals, but it doesn't necessarily involve economies of scale.

Question 6

____________________ are financial and nonfinancial information items that describe individual activities.

Accepted Answer

The answer of ____________________ are financial and nonfinancial information items...

Question 7

_________________________ is a system-wide, integrated approach that focuses management's attention on activities with the objective of improving customer value and profit achieved by providing this value.

Accepted Answer

The answer of _________________________ is a system-wide, integrated approach that...

Question 8

___________________ are performed each time a unit is produced.

Accepted Answer

The answer of ___________________ are performed each time a unit...

Question 9

Match each item with the correct statement below.
a.
cycle time
b.
direct tracing
c.
activity sharing
d.
driver tracing
e.
value-added activities
f.
activity selection
-The length of time it takes to produce a unit of output from the time raw materials are received until the good is delivered to finished goods inventory.

Accepted Answer

Cycle time measures the length of time it takes to produce a unit of output from start to finish.

Answer: B
 Direct tracing is a cost accounting method that tracks the costs of materials, labor, and overhead directly to each individual unit of production.

Answer: C
 Activity sharing refers to the combining of multiple activities to be completed by a single worker, machine, or process to improve efficiency and reduce costs.

Answer: D
 Driver tracing is the process of identifying and tracking the cause-and-effect relationship between costs and the activities that drive them.

Answer: E
 Value-added activities are those activities that directly contribute to the creation of value for the customer, such as design, production, and distribution.

Answer: F
 Activity selection is the process of choosing which activities to perform and which to eliminate or improve in order to maximize efficiency and minimize waste.

Question 10

A company will sometimes use a ____________________ which identifies the amount of labor consumed by each activity.

Accepted Answer

The answer of A company will sometimes use a ____________________...

Question 11

The ___________________ is calculated by taking the amount of the activity driver per product and dividing it by total driver quantity.

Accepted Answer

The answer of The ___________________ is calculated by taking the...

Question 12

Match each item with the correct statement below.
a.
activity analysis
b.
value-added costs
c.
velocity
d.
activity inputs
e.
activity output measure
f.
activity output
-Costs necessary to perform value-added activities with perfect efficiency.

Accepted Answer

Value-added costs are the costs necessary to perform value-added activities with perfect efficiency, meaning that these costs directly contribute to the production of goods or services and are necessary for the business to function. The other choices refer to different aspects of activity-based costing and analysis, such as analyzing the inputs and outputs of specific activities (A, D, E, F) or measuring the speed at which activities are performed (C).

Question 13

Match each item with the correct statement below.
a.
cycle time
b.
direct tracing
c.
activity sharing
d.
driver tracing
e.
value-added activities
f.
activity selection
-Activities necessary to remain in business

Accepted Answer

Value-added activities are necessary to remain in business as they directly contribute to creating value for customers and generating revenue.

Answer: A
 Cycle time refers to the time it takes to complete a process or activity, and optimizing cycle time is important for staying competitive and efficient.

Answer: D
 Driver tracing involves identifying the key drivers or factors that contribute to specific outcomes or results, and understanding these drivers is critical for making informed decisions and improving performance.

Note: The other options (B, C, and F) are important concepts in business operations, but they are not necessarily essential for remaining in business.

Question 14

_________________________ assigns costs to activities and then costs to cost objects.

Accepted Answer

The answer of _________________________ assigns costs to activities and then...

Question 15

Accurate ___________________ allow managers to make better pricing decisions, customer-mix decisions, and other customer-related decisions that improve profitability.

Accepted Answer

The answer of Accurate ___________________ allow managers to make better...

Question 16

When products consume overhead activities in systematically different proportion due to such things as product size, product complexity, setup time and size of batches this is known as _________________.

Accepted Answer

The answer of When products consume overhead activities in systematically...

Question 17

A focus on cost reduction instead of cost assignment and emphasizing the maximization of systemwide performance is known as _______________________.

Accepted Answer

The answer of A focus on cost reduction instead of...

Question 18

Match each item with the correct statement below.
a.
cycle time
b.
direct tracing
c.
activity sharing
d.
driver tracing
e.
value-added activities
f.
activity selection
-Involves choosing among different sets of activities that are caused by competing strategies.

Accepted Answer

Activity selection involves choosing among different sets of activities that are caused by competing strategies.

Answer: D 
 Driver tracing involves analyzing specific drivers of costs or time in a process.

Answer: C 
 Activity sharing involves multiple processes sharing the same activity to increase efficiency.

Answer: A 
 Cycle time is the time it takes to complete one process or cycle, from start to finish.

Answer: E 
 Value-added activities are activities that directly contribute to creating value for the customer.

Answer: B 
 Direct tracing involves directly following the movement or flow of materials, information, or people in a process to identify opportunities for improvement.

Question 19

Tracing ________________ costs to suppliers can enable managers to choose the true low-cost supplier.

Accepted Answer

The answer of Tracing ________________ costs to suppliers can enable...

Question 20

_____________________ are factors that measure the consumption of activities by products and other cost objects and can be classified as either unit-level or nonunit-level.

Accepted Answer

The answer of _____________________ are factors that measure the consumption...

Quiz 7: Activity-Based Costing and Management

Match each item with the correct statement below. a. activity analysis b. value-added costs c. velocity d. activity inputs e. activity output measure f. activity output -Process that answers the question "How many people perform the activities?"

Match each item with the correct statement below. a. cycle time b. direct tracing c. activity sharing d. driver tracing e. value-added activities f. activity selection -Cost assignment method used for a cost of a resource that is exclusively used by an activity.