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ACC 223A /
Final Examination (Week 18) /
Final Examination

Started on Tuesday, 22 June 2021, 9:39 PM

State Finished
Completed on Tuesday, 22 June 2021, 11:40 PM
Time taken 2 hours
Grade 99.00 out of 100.00

Question 1 All of the following are examples of

non-value-added activities except:

Correct

Mark 1.00 out of Select one:

1.00
a. inspections

b. assembling 

c. ordering

d. receiving

Question 2 The major source of information for the activity management system is

Correct

Mark 1.00 out of Select one:

1.00
a. a performance measurement system.

b. product information.

c. driver analysis.

d. an activity-based costing system. 

Question 3 The objective of the cost dimension of activity-based management is:

Correct

Mark 1.00 out of Select one:

1.00
a. reducing the amount of bad debts incurred by a firm.

b. improving the accuracy of cost assignments. 

c. reducing the number of trade debtors of a firm.

d. increasing the sales of all products.

Question 4 What are the two dimensions of an activity-based management model?

Correct

Mark 1.00 out of Select one:

1.00
a. the quality dimension and the activity dimension

b. the quality dimension and the process dimension

c. the cost dimension and the process dimension 

d. the cost dimension and the project dimension

Question 5 Which of the following is true of the process dimension of an activity-based management (ABM) model?

Incorrect

Mark 0.00 out of Select one:

1.00
a. The process dimension provides cost information about resources, activities, and cost objects of interest. 

b. The process dimension aims at improving the accuracy of cost assignments.

c. The process dimension provides the ability to engage in and measure continuous improvement.

d The process dimension is not concerned with the issue or presence of waste in activities
 d. The process dimension is not concerned with the issue or presence of waste in activities.

Question 6 The process dimension is not concerned with the issue or presence of waste in activities.

Correct

Mark 1.00 out of Select one:

1.00
a. identify number of processes

b. identify activities in a process

c. identify complexity of processes

d. identify root causes of activity costs 

Question 7 The resource(s) consumed by the activity in producing its output is(are) called:

Correct

Mark 1.00 out of Select one:

1.00
a. Driver analysis

b. Activity inputs 

c. Activity outputs

d. Value-added activities

Question 8 An activity output measure is

Correct

Mark 1.00 out of Select one:

1.00
a. the number of outputs from a process.

b. the effort expended to identify root causes.

c. the cost of the activity measured.

d. the number of times an activity is performed. 

Question 9 Which of the following is true of value-added activities?

Correct

Mark 1.00 out of Select one:

1.00
a. They are synonymous with the state-detection activities

b. They are the activities that replicate work because it wasn't done correctly the first time.

c. They include activities such as inspection of finished goods.

d. They are activities that are necessary to remain in business. 

Question 10 An example of activity reduction would be

Correct

Mark 1.00 out of Select one:

1.00
a. designing a new product that uses components already used by another product.

b. improving cycle time so the need for expediting is eliminated.

c. redesigning products to lead to a reduced cost set of activities.

d. reducing demand for customer complaint handling by improving product quality. 

Question 11 Non-value-added activities

Correct

Mark 1.00 out of Select one:

1.00
a. are valued outputs to internal users.

b. help meet the organization's needs, not the product needs.

c. are valued outputs to external users.

d. are unnecessary inputs. 

Question 12 Which of the following is a value-added activity?

Correct

Mark 1.00 out of Select one:

1.00
a. inspection

b. moving

c. processing 

d. waiting

Question 13 Which of the following process dimensions of the activity-based management model deals with "how well"?

Correct

Mark 1.00 out of Select one:

1.00
a. activities

b. resources

c. performance measures 

d. driver analysis

Question 14 The effort to reduce costs of existing products and processes is named:

Correct

Mark 1.00 out of Select one:

1.00
a. Activity reduction

b. Kaizen costing 

c. Activity elimination

d. Activity selection

Question 15 Value-added costs equal standard quantity times

Correct

Mark 1.00 out of Select one:

1.00
a. actual price.

b. non-value-added costs.

c. standard price. 

d. currently attainable standards.

Question 16 time-and-motion study revealed that it should take 3 hours to produce a product that currently takes 7 hours to produce.
Correct Labor is P9 per hour.
Mark 1.00 out of
The non-value-added costs are
1.00

Select one:
a. 36 

b. 24

c. 56

d. 0
Question 17 Mendelsohn company keeps 20 days of materials inventory on hand to avoid shutdowns due to materials shortages.
Correct Carrying costs average P4,000 per day. Bach, Inc., a competitor, keeps 10 days of inventory on hand, and the competitor's
Mark 1.00 out of carrying costs average P2,000 per day.

1.00
The value-added costs are

Select one:
a. 20,000

b. 80,000

c. 40,000

d. 0 

Question 18 A company has 19 days of finished goods inventory on hand to avoid stockouts. The carrying costs of the inventory
Correct average P6,000 per day.
Mark 1.00 out of
The non-value-added costs are
1.00

Select one:
a. 5,000

b. 10,000

c. 250

d. 114,000 

Question 19 A time-and-motion study revealed that it should take 2 hours to produce a product that currently takes 6 hours to
Correct produce. Labor is P8 per hour.
Mark 1.00 out of
The value-added costs are
1.00

Select one:
a. 48

b. 0

c. 16 

d. 32

Question 20 Each unit of product requires 16 pounds of material. Due to scrap and rework, each unit has been averaging 18 pounds of
Correct material. The material costs P6 per pound.
Mark 1.00 out of
If the company wants to reduce non-value-added costs by 25 percent next year, the currently attainable standard for
1.00
material would be

Select one:
a. 17.50 

b. 18

c. 16

d. 16.80
Question 21 Alpha, Inc., manufactures Product A. The setup time for each unit of Product A is 8 hours. Gamma, Inc., that uses the just-
Correct in-time system and produces the same product has reduced setup time by 1 hour. Setup labor is P35 per hour. If Alpha
Mark 1.00 out of wants to reduce non-value-added costs by 30 percent next year, compute the currently attainable standard for setup
1.00 time. (Round answer to one decimal place.)

Select one:
a. 4.5

b. 5.9 

c. 7.3

d. 6.2

Question 22 Bandolero Corporation has developed ideal standards for four activities: labor, materials, inspection, and receiving.
Correct Information is as follows:

Mark 1.00 out of Activity                             Activity Driver                      SQ           AQ           SP

1.00 Inspection                       Inspection hours                    0            40,000     P 12

Labor                               Hours                                   50,000     56,000        18

Materials                         Pounds                                100,000   105,000       15

Receiving                        Orders                                  150            190          450

The actual prices paid per unit of each activity driver were equal to the standard prices. The value-added costs for labor
are

Select one:
a. 84,000

b. 900,000 

c. 792,000

d. 75,000

Question 23 Bandolero Corporation has developed ideal standards for four activities: labor, materials, inspection, and receiving.
Correct Information is as follows:

Mark 1.00 out of Activity                             Activity Driver                      SQ           AQ           SP

1.00 Inspection                       Inspection hours                    0            40,000     P 12

Labor                               Hours                                   50,000     56,000        18

Materials                         Pounds                                100,000   105,000       15

Receiving                        Orders                                  150            190          450

The actual prices paid per unit of each activity driver were equal to the standard prices. The non-value-added costs for
materials are

Select one:
a. 1,575,000

b. 75,000 

c. 157,500

d. 150,000
Question 24
Bandolero Corporation has developed ideal standards for four activities: labor, materials, inspection, and receiving.
Correct
Information is as follows:

Mark 1.00 out of

Activity                             Activity Driver                      SQ           AQ           SP

1.00
Inspection                       Inspection hours                    0            40,000     P 12

Labor                               Hours                                   50,000     56,000        18

Materials                         Pounds                                100,000   105,000       15

Receiving                        Orders                                  150            190          450

The actual prices paid per unit of each activity driver were equal to the standard prices. The non-value-added costs for
inspection are

Select one:
a. 480,000 

b. 60,000

c. 40,000

d. 420,000

Question 25
Bandolero Corporation has developed ideal standards for four activities: labor, materials, inspection, and receiving.
Correct
Information is as follows:

Mark 1.00 out of Activity                             Activity Driver                   SQ           AQ           SP

1.00
Inspection                       Inspection hours                    0            40,000     P 12

Labor                               Hours                                   50,000     56,000        18

Materials                         Pounds                                100,000   105,000       15

Receiving                        Orders                                  150            190          450

The actual prices paid per unit of each activity driver were equal to the standard prices. The actual costs for receiving are

Select one:
a. 18,000

b. 49,500

c. 85,500 

d. 67,500

Question 26
Internal reports prepared under the responsibility
accounting approach should highlight:
Correct

Mark 1.00 out of

1.00
Select one:
a. cost properly allocable to the cost center under
generally accepted accounting principles

b. fixed cost of production

c. controllable cost

 

d. variable cost of production

Question 27
A company has three producing departments and one
service department.  Due to a scheduling
error in the service
Correct
department, an unfavorable variance was created.  A sound responsibility accounting system
would dictate that the
Mark 1.00 out of
variance be:
1.00

Select one:
a. allocated to both producing and service
departments

b. charged to the service department causing the

variance and not allocated to other departments 

c. allocated to producing departments, but not on the

same basis as ordinary charges for use of the service

d. allocated to producing departments on the basis

of usage

Question 28
Responsibility reports should possess all of the
following characteristics except:
Correct

Mark 1.00 out of

1.00
Select one:
a. being stated only in dollars for operating
management 

b. being issued with regularity

c. being consistent in form and content each time

they are issued

d. fitting the organization chart

Question 29
Controllable costs are:
Correct

Mark 1.00 out of

1.00
Select one:
a. costs that are likely to respond to the amount of
attention devoted to them by a specified manager 

b. costs that fluctuate in total in response to small

changes in the rate of capacity utilization

c. costs that management decides to incur in the

current period to enable the company to achieve objectives other
than filling
customers' orders

d. costs that will be unaffected by current

managerial decisions

Question 30 The most desirable measure of departmental

performance for evaluating the departmental manager is departmental:

Correct

Mark 1.00 out of Select one:

1.00
a. revenue less departmental variable expenses

b. revenue less departmental fixed expenses

c. revenue less controllable departmental expenses

             E.    net income 

d. contribution to indirect expenses

Question 31
Of most relevance in deciding how or which costs
should be assigned to the responsibility center is the degree of:
Correct

Mark 1.00 out of

1.00
Select one:
a. causality

b. variability

c. avoidability

d. controllability 
Question 32 A company's only service department provides the
following data:

Correct  

Mark 1.00 out of                                                    Monthly           Service Hours               Actual

1.00                   Service Center          Budget                Available   

  Monthly Expense

                  Carpenter Shop         P40,000                   1,600                  P47,800

It serves three producing

departments that show the following budgeted and actual cost and service‑hours
data:

                                                                  Estimated                       Actual

                                                            Services
Required          Services Used

             Department No.                          Carpenter

Shop      Carpenter Shop

             1..........................................................         350 hrs.                 600

hrs.

             2.........................................................         800 hrs.                 750

hrs.

             3.........................................................         450 hrs.                 650

hrs.

  

The sold-hour rate for the

carpenter shop is:

Select one:
a. 25 

b. 29.88

c. 20

d. 23.90

Question 33 A company's only service department provides the following data:

Correct  

Mark 1.00 out of                                                    Monthly           Service Hours               Actual

1.00                   Service Center          Budget                Available      Monthly Expense

                  Carpenter Shop         P40,000                   1,600                  P47,800

It serves three producing departments that show the following budgeted and actual cost and service‑hours data:

                                                                  Estimated                       Actual

                                                            Services Required          Services Used

             Department No.                          Carpenter Shop      Carpenter Shop

             1..........................................................         350 hrs.                 600 hrs.

             2.........................................................         800 hrs.                 750 hrs.

             3.........................................................         450 hrs.                 650 hrs.

  

The spending variance for

the carpenter shop, assuming that 80% of the budgeted expense is fixed, is:

Select one:
a. 5,800 F

b. 7,800 U

c. 5,800 U 

d. 7,800 F
Question 34
The primary difference between a fixed (static)
budget and a variable (flexible) budget is that a fixed budget:
Correct

Mark 1.00 out of

1.00
Select one:
a. is a plan for a single level of sales (or other
measure of activity); while a variable budget consists of several plans,
one
for each of several levels of sales (or other measure of activity) 

b. is concerned only with future acquisitions of

fixed assets; while a variable budget is concerned with expenses that
vary with
sales

             E.    none of the above

c. cannot be changed after the period begins; while a

variable budget can be changed after the period begins

d. includes only fixed costs; while variable budget

includes only variable costs

Question 35
Flintstone Company uses flexible budgeting for
cost control.  Flintstone produced 10,800
units of a product during March,
Correct
incurring indirect material costs of P13,000.  Its static budget for the year
reflected variable indirect material costs of
Mark 1.00 out of
P180,000 at a production volume
of 144,000 units.  A flexible budget for
March production would reflect indirect material
1.00
costs of:

Select one:
a. 13,500 

b. 11,700

c. 13,000

d. 13,975

Question 36
In analyzing factory overhead variances, an idle
capacity variance is the difference between the:
Correct

Mark 1.00 out of

1.00
Select one:
a. actual amount spent for factory overhead items
during the period and the amount applied during the period

b. master budget application rate and the flexible

budget application rate times actual hours worked

c. budget allowance for actual units produced for

the period and the amount of applied factory overhead 

d. actual factory overhead incurred and the budget

allowance estimated for the capacity used

Question 37
All of the following are reasons why
responsibility reports are of limited use to managers in helping them to
control costs,
Correct
except:
Mark 1.00 out of
1.00

Select one:
a. control data available in a responsibility
reporting system are too aggregated to be useful

b. control data available to managers is too timely

to be precise 

c. most responsibility accounting systems improperly

base allowable budgets on volume-based measures of activity

d. control data available to managers are not easily

interpreted by all operating managers

e. all of the above are reasons

Question 38
In the traditional view of responsibility
accounting where individuals are evaluated rather than operating systems, all
of
Correct
the following dysfunctional results may occur, except:
Mark 1.00 out of
1.00

Select one:
a. many competent managers leave the company

b. managers tend to take actions that are

self-serving rather than beneficial to the company as a whole

c. managers concentrate on meeting the budget rather

than the best level of performance that can be achieved

d. managers tend to focus their attention on long-run

targets and ignore the short-term needs of the company 

Question 39 Which of the following is true of a Balanced Scorecard?

Correct

Mark 1.00 out of Select one:

1.00
a. It fails to connect with an organization's overall mission and strategy.

b. It is the most common form of an activity-based responsibility accounting system.

c. It does not work for firms operating in dynamic environments.

d. It is a strategic-based performance management system that identifies objectives and measures for four different
perspectives. 

Question 40 Lead measures are critical to strategy because

Correct

Mark 1.00 out of Select one:

1.00
a. there should be a causal linkage with strategy. 

b. they are outcome measures.

c. they are based on actual activity.

d. they are an independent part of the system.

Question 41 A major difference between activity-based responsibility accounting and strategic-based responsibility accounting is

Correct

Mark 1.00 out of Select one:

1.00
a. only strategic-based responsibility accounting includes the process perspective.

b. only strategic-based responsibility accounting is linked to strategy. 

c. only strategic-based responsibility accounting reinforces team accountability

d. only strategic-based responsibility accounting is focused on systemwide efficiency.

Question 42 Which feature is related solely to strategic-based responsibility and not to activity-based responsibility?

Correct

Mark 1.00 out of Select one:

1.00
a. team accountability

b. process perspective

c. customer perspective 

d. financial perspective
Question 43 Which of the following statements is true regarding lag measures?

Correct

Mark 1.00 out of Select one:

1.00
a. lag measures are performance drivers

b. lag measures are factors that drive future performance

c. lag measures are measures that relate to customers

d. lag measures include measures such as customer profitability 

Question 44 The outcome measures that are a result of past efforts are called:

Correct

Mark 1.00 out of Select one:

1.00
a. Objective measures

b. Financial measures

c. External measures

d. Lag measures 

Question 45 The outcome measures that can be readily quantified and verified are called:
Correct

Mark 1.00 out of Select one:

1.00
a. Lag measures

b. External measures

c. Financial measures

d. Objective measures 

Question 46 Which of the following would be a nonfinancial measure?

Correct

Mark 1.00 out of Select one:

1.00
a. cost per unit

b. customer profitability

c. return on investment

d. dissatisfied customers 

Question 47 Which of the following would be a subjective measure?

Correct

Mark 1.00 out of Select one:

1.00
a. cost per unit

b. employee capabilities 

c. market share

d. return on investment

Question 48 Which of the following would be a lag measure?

Correct

Mark 1.00 out of Select one:

1.00
a. plant investment

b. employee training hours

c. budget forecasts

d. sales per employee 

Question 49 Which of the following features make stretch targets feasible?

Correct

Mark 1.00 out of Select one:

1.00
a. The measures are based on currently attainable standard costs.

b. The targets are set at desired levels for twenty years to ensure long-term performance

c. The measures are linked by causal relationships 

d. The targets are set in isolation by top management

Question 50 Which of the following is NOT a step in developing the Balanced Scorecard?

Correct

Mark 1.00 out of Select one:

1.00
a. outlining control procedures 

b. setting target values

c. rewards

d. setting balanced objectives

Question 51 In the financial perspective, economic value added would be an appropriate measure for

Correct

Mark 1.00 out of Select one:

1.00
a. revenue growth.

b. improving asset utilization. 

c. risk management.

d. cost reduction.

Question 52 Diversifying customers and product lines are initiatives important to

Correct

Mark 1.00 out of Select one:

1.00
a. revenue growth.

b. asset utilization.

c. risk management. 

d. cost reduction.

Question 53 On-time delivery performance is calculated as

Correct

Mark 1.00 out of Select one:

1.00
a. orders delivered on time/total number of orders delivered. 

b. orders delivered on time/total production.

c. orders delivered/orders delivered on time.

d. orders delivered on time/total sales dollars.

Question 54 From the customer perspective, which of the following might be considered a core objective rather than a performance
Correct value?
Mark 1.00 out of
1.00 Select one:
a. decrease price

b. improve image

c. improve product quality

d increase customer retention 

 d. increase customer retention 

Question 55 The time it takes to produce one unit of product is called

Correct

Mark 1.00 out of Select one:

1.00
a. velocity.

b. cycle time. 

c. delivery time.

d. turnover.

Question 56 Cycle time is

Correct

Mark 1.00 out of Select one:

1.00
a. the time it takes to produce one unit of product. 

b. the time it takes to collect the account after the sale.

c. the time it takes to turn inventory over.

d. the time it takes to deliver the product after it is sold.

Question 57 Delivery performance can be improved by

Correct

Mark 1.00 out of Select one:

1.00
a. decreasing cycle time. 

b. decreasing velocity.

c. increasing turnover

d. increasing cycle time.

Question 58 A manufacturing cell has the theoretical capability of producing 55,000 microchips per quarter. The conversion cost per
Correct quarter is P30,000. There are 5,000 production hours available within the cell per quarter.
Mark 1.00 out of
The theoretical velocity per hour is:
1.00

Select one:
a. 11 

b. 8

c. 6

d. 15

Question 59 Which of the following might be a measure of employee motivation, empowerment, and alignment?

Correct

Mark 1.00 out of Select one:

1.00
a. units product cost

b. process efficiency

c. customer satisfaction

d. suggestions per employee 

Question 60 the beginning of 2018, Vibgyor Company installed a just-in-time (JIT) purchasing and manufacturing system. The
Correct following information has been gathered about one of the company's products:

Mark 1.00 out of

1.00 Theoretical annual capacity               4,200 units

Actual production                              1,600 units

Production hours available                   600 hours

Actual conversion cost per hour            P15

The theoretical velocity per hour is:

Select one:
a. 3

b. 2

c. 7 

d. 9

Question 61 Homegrown, Inc., manufactures a product that experiences the following activities:

Correct

Mark 1.00 out of Processing (three departments)              60 hours

1.00 Moving (four moves)                               15 hours

Waiting time                                             45 hours

Storage time (before delivery)                120 hours

The MCE for the product is

Select one:
a. 0.25 

b. 0.33

c. 0.27

d. 0.18

Question 62 A manufacturing cell has the theoretical capability of producing 40,000 microchips per quarter. The conversion cost per
Correct quarter is P25,000. There are 4,000 production hours available within the cell per quarter. The theoretical cycle time per
Mark 1.00 out of unit in minutes is

1.00

Select one:
a. 6.000 minutes 

b. 37.500 minutes.

c. 0.625 minutes

d. 8.400 minutes
Question 63 At the beginning of 2018, Haroldson Company installed a JIT purchasing and manufacturing system. The following
Correct information has been gathered about one of the company's products.

Mark 1.00 out of

1.00 Theoretical annual capacity            9,000

Actual production                           3,600

Production hours available             3,000

Actual cost per unit                          P33

What is the ideal conversion cost per unit?

Select one:
a. 39.60 per unit.

b. 11 per unit. 

c. 16.50 per unit

d. 99 per unit

Question 64 Capable, Inc., manufactures a product that goes through the following activities:

Correct

Mark 1.00 out of Processing (three departments)            21 hours

1.00 Moving (four moves)                                6 hours

Waiting time                                           10 hours

Storage time (before delivery)                19 hours

What is the manufacturing cycle efficiency (MCE) of the product? (Round answer to two decimal places.)

Select one:
a. 0.41

b. 0.21

c. 0.42

d. 0.38 

Question 65 The learning and growth perspective has three major objectives. Which of the following is an objective of the learning and
Correct growth process?

Mark 1.00 out of

1.00 Select one:
a. improve asset utilization

b. increase motivation and alignment 

c. increase customer acquisition

d. increase the number of new products

Question 66 Which of the following would not be an outcome measure?

Correct

Mark 1.00 out of Select one:

1.00
a. net income

b. return on investment

c. training hours 

d. market share
Question 67 Failure of a strategy might be due to

Correct

Mark 1.00 out of Select one:

1.00
a. implementation problems 

b. incorrect feedback.

c. incorrect calculations

d. invalid controls

Question 68 Which of the following statements is true of a testable strategy?

Correct

Mark 1.00 out of Select one:

1.00
a. It is a set of personal goals aimed at short-term results.

b. It aims at integrating financial and process measures to allow managers achieve individual goals.

c. It is not suitable for firms operating in dynamic environments.

d. It is a set of linked objectives aimed at an overall goal. 

Question 69 Balanced Scorecard becomes a means of communicating the strategy of an organization to its employees and managers.
Correct Which of the following is a downside of communicating this information?

Mark 1.00 out of

1.00 Select one:
a. The expanded set of metrics for performance evaluation will not be followed.

b. The reward system gets tied just to traditional financial measures

c. Sensitive information may end up in the hands of competitors. 

d. The alignment of performance measures to the objectives of an organization gets neglected

Question 70 Which of the following is NOT a condition that must be present for a strategy to become attainable?

Correct

Mark 1.00 out of Select one:

1.00
a. resources must be allocated to strategic initiatives

b. all are conditions that must be met for strategy to become actionable 

c. the organization must decide how much of the strategic targets will be achieved for the coming year

d. budgetary process must provide the resources necessary to carry out the initiatives

Question 71 In a Balanced Scorecard framework, to ensure that balanced attention is given to all measures, incentive compensation is
Correct paid when:

Mark 1.00 out of

1.00 Select one:
a. each strategic measure equals a prespecified minimum threshold value.

b. each strategic measure exceeds a prespecified minimum threshold value. 

c. expected operational performance of a company meets the actual performance

d. expected financial performance of a company meets the actual performance

Question 72 Which of the following refers to the complete range of tangible and intangible benefits that a customer receives from a
Correct purchased product?

Mark 1.00 out of

1.00 Select one:
a. The activity product

b. The strategic product

c. The total product 

d. The value product

Question 73 Which of the following strategies strives to increase customer value by increasing customer realization?

Correct

Mark 1.00 out of Select one:

1.00
a. A cost-leadership strategy

b. A differentiation strategy 

c. A value chain strategy

d. A target costing strategy

Question 74 When a computer company selects a mix of strategies in order to create sustainable competitive advantage, it is following
Correct a

Mark 1.00 out of

1.00 Select one:
a. low-cost strategy.

b. differentiation strategy

c. focusing strategy.

d. strategic positioning strategy 

Question 75 The industrial value-chain analysis

Correct

Mark 1.00 out of Select one:

1.00
a. is not compatible with differentiation strategies.

b. recognizes only complex linkages within the firm

c. determines a linked set of value-creating activities 

d. requires a firm to operate across the entire value chain

Question 76 The structural and executional factors that determine the long-term cost structure of an organization are called:

Correct

Mark 1.00 out of Select one:

1.00
a. Organizational activities

b. Organizational cost drivers 

c. Operational activities

d. Operational cost drivers

Question 77 The operational activity of moving inventory is classified as a

Correct

Mark 1.00 out of Select one:

1.00
a. batch-level activity. 

b. product-level activity.

c. unit-level activity.

d. facility-level activity

Question 78 Activities required to design, develop, produce, market, distribute, and service a product are known as

Correct

Mark 1.00 out of Select one:

1.00
a. overhead.

b. value-chain activities. 

c. target activities

d. whole life activities.

Question 79 The last link of the internal value chain is

Correct

Mark 1.00 out of Select one:

1.00
a. market.

b. design.

c. service. 

d. distribute.

Question 80 Analyzing how costs and other financial factors vary as different bundles of activities are considered to strengthen a firm's
Correct strategic position is the process of

Mark 1.00 out of

1.00 Select one:
a. design.

b. exploiting linkages. 

c. cost driver analysis

d. distribution.

Question 81 Identifying profitable and unprofitable customers is an example of exploiting

Correct

Mark 1.00 out of Select one:

1.00
a. consumable life.

b. customer linkages 

c. supplier linkages.

d. the product life cycle.

Question 82 Burgandy Corp. is a manufacturer of equipment used in manufacturing. It currently produces a product with 20 parts.
Correct Through redesign, it has reduced the number of parts to 8. The current activity capacity and demand for the 20 unit
Mark 1.00 out of configuration and expected activity demand for the 8 part configuration are provided below:

1.00

Activities                      Activity Driver      Activity      Current Activity   Expected Activity

                                                                      Capacity         Demand                Demand

  

Materials usage              Number of parts    250,000              250,000                100,000

Assembling parts          Direct labor hours     15,000                15,000                     6,000

Purchasing parts           Number of orders     18,000                14,000                      7,000

Materials usage has a rate of P5 per part and no fixed costs. Assembly has a rate of P25 per labor hour with no fixed
component. Purchasing requires two clerks that can process 2,000 purchase orders. Each clerk earns P33,000 per year.
There is also a P2 per order processing cost.

What are the savings in materials usage cost with the new design changes?

Select one:
a. 820,000

b. 780,000

c. 750,000 

d. 120,000

Question 83 Ambrosia Corp. is a manufacturer of equipment used in manufacturing. It currently produces a product with 30 parts but
Correct through redesign has reduced the number of parts to 9. Then current activity capacity and demand for the 30 unit
Mark 1.00 out of configuration and expected activity demand for the 9 part configuration are provided below:

1.00

             

 Current Activity  
 Expected Activity

Activities Activity Driver  Activity Capacity Demand Demand

Materials usage number of parts 300,000 300,000 90,000
Assembly direct labor hours 20,000 20,000 6,000
Purchasing parts number of orders 20,000 16,000 8,000

Materials usage has a rate of P6 per part and no fixed costs. Assembly has a rate of P20 per labor hour with no fixed
component. Purchasing requires clerks that can process 5,000 purchase orders. Each clerk earns P40,000 per year. There is
also a P1 per order processing cost.

What is the cost savings from purchasing parts?

Select one:
a. 48,000

b. 40,000

c. 88,000 

d. 80,000
Question 84 Ambrosia Corp. is a manufacturer of equipment used in manufacturing. It currently produces a product with 30 parts but
Correct through redesign has reduced the number of parts to 9. Then current activity capacity and demand for the 30 unit
Mark 1.00 out of configuration and expected activity demand for the 9 part configuration are provided below:

1.00

             

 Current Activity  
 Expected Activity

Activities Activity Driver  Activity Capacity

Demand Demand
Materials usage number of parts 300,000 300,000 90,000
Assembly direct labor hours 20,000 20,000 6,000
Purchasing parts number of orders 20,000 16,000 8,000

Materials usage has a rate of P6 per part and no fixed costs. Assembly has a rate of P20 per labor hour with no fixed
component. Purchasing requires clerks that can process 5,000 purchase orders. Each clerk earns P40,000 per year. There is
also a P1 per order processing cost.

What is the total cost reduction of the new design?

Select one:
a. 2,194,000

b. 2,208,000

c. 1,624,000

d. 1,628,000 

Question 85
Ambrosia Corp. is a manufacturer of equipment used in manufacturing. It currently produces a product with 30 parts but
Correct
through redesign has reduced the number of parts to 9. Then current activity capacity and demand for the 30 unit
Mark 1.00 out of
configuration and expected activity demand for the 9 part configuration are provided below:

1.00

             

 Current Activity  
 Expected Activity

Activities Activity Driver  Activity Capacity Demand

Demand
Materials usage number of parts 300,000 300,000 90,000
Assembly direct labor hours 20,000 20,000 6,000
Purchasing parts number of orders 20,000 16,000 8,000

Materials usage has a rate of P6 per part and no fixed costs. Assembly has a rate of P20 per labor hour with no fixed
component. Purchasing requires clerks that can process 5,000 purchase orders. Each clerk earns P40,000 per year. There is
also a P1 per order processing cost.

If 10,000 units are being produced and the sales price is P500, what is the new sales price if the cost savings are passed on
to the consumer?

Select one:
a. 337.20 

b. 317.40

c. 237

d. 129.80
Question 86 Blue Vibrance Company sells a product used in many manufacturing processes. The sales activity involves three activity
Correct areas:

Mark 1.00 out of

1.00 Activity Area                                                   Cost Driver and Rate

Order taking                                                     P100 per purchase order

Sales visits                                                         P50 per visit

Delivery vehicles                                                P1 per delivery mile

The following customer information is given:

                                                          AX              BY            DZ

Units sold                                      100,000         80,000      60,000

List price                                          P50               P50          P50

Actual sales price                            P45                P48          P50

Number of purchase orders              30                 20            10

Number of sales visits                        6                   5               3

Number of delivery miles                100                 80             60

Which customer is most profitable?

Select one:
a. BY

b. AX 

c. They are equally profitable

d. DZ

Question 87 Blue Vibrance Company sells a product used in many manufacturing processes. The sales activity involves three activity
Correct areas:

Mark 1.00 out of

1.00 Activity Area                                                   Cost Driver and Rate

Order taking                                                     P100 per purchase order

Sales visits                                                         P50 per visit

Delivery vehicles                                                P1 per delivery mile

The following customer information is given:

                                                          AX              BY            DZ

Units sold                                      100,000         80,000      60,000
List price                                          P50               P50          P50

Actual sales price                            P45                P48          P50

Number of purchase orders              30                 20            10

Number of sales visits                        6                   5               3

Number of delivery miles                100                 80             60

Which customer has the least activity costs?

Select one:
a. AX

b. DZ 

c. BY

d. They are the same

Question 88
Blue Vibrance Company sells a product used in many manufacturing processes. The sales activity involves three activity
Correct
areas:

Mark 1.00 out of

1.00
Activity Area                                                   Cost Driver and Rate

Order taking                                                     P100 per purchase order

Sales visits                                                         P50 per visit

Delivery vehicles                                                P1 per delivery mile

The following customer information is given:

                                                          AX              BY            DZ

Units sold                                      100,000         80,000      60,000
List price                                          P50               P50          P50

Actual sales price                            P45                P48          P50

Number of purchase orders              30                 20            10

Number of sales visits                        6                   5               3

Number of delivery miles                100                 80             60

What is the profitability of customer BY?

Select one:
a. 2,330,000

b. 4,000,000

c. 3,837,670 

d. 3,840,000

Question 89 Awesome Products Company manufactures a product sold to retailers. It is considering suppliers for its process. The
Correct supplier quality involves four activity areas:

Mark 1.00 out of

1.00 Activity Area               Cost Driver and Rate

Order cost                     P120 per purchase order

Defective units              P200 per unit internal failure costs

Delivery trips                 P5 per delivery mile

Carrying cost                 P1 per order

The following supplier information is given:

                                                   X3                    Y2                 Z1

Materials units needed           100,000           100,000        100,000

Actual purchase price                 P5                 P4.99            P5.01

Number of purchase orders        20                   30                18

Number of defects                       6                     12                 0

Number of deliveries                  20                     30               18

Which supplier is least costly?

Select one:
a. Y2

b. They are equally costly

c. Z1 

d. X3
Question 90 Awesome Products Company manufactures a product sold to retailers. It is considering suppliers for its process. The
Correct supplier quality involves four activity areas:

Mark 1.00 out of

1.00 Activity Area               Cost Driver and Rate

Order cost                     P120 per purchase order

Defective units              P200 per unit internal failure costs

Delivery trips                 P5 per delivery mile

Carrying cost                 P1 per order

The following supplier information is given:

                                                   X3                    Y2                 Z1

Materials units needed           100,000           100,000        100,000

Actual purchase price                 P5                 P4.99            P5.01

Number of purchase orders        20                   30                18

Number of defects                       6                     12                 0

Number of deliveries                  20                     30               18

Which supplier has the most defective units?

Select one:
a. Y2 

b. They are equal

c. Z1

d. X3

Question 91 The period of time when sales increase at a decreasing rate is called the:

Correct

Mark 1.00 out of Select one:

1.00
a. decline stage

b. growth stage

c. maturity stage 

d. introduction stage

Question 92 The viewpoint that describes the general sales pattern of a product as it passes through the introduction, growth,
Correct maturity, and decline stages is called the:

Mark 1.00 out of

1.00 Select one:
a. Marketing viewpoint 

b. Accounting viewpoint

c. Production viewpoint

d. Customer viewpoint

Question 93 Life-cycle cost management consists of

Correct

Mark 1.00 out of Select one:

1.00
a. actions taken to design, develop, test, market, distribute, maintain, service, and dispose of a product to maximize
revenues.

b. actions that focus on minimizing the cost of developing, designing, producing, distributing, operating, servicing,
and disposal of a product.

c. actions to extend the life of a product through design, development, production, and maintenance

d. actions taken to enable a product to be designed, developed, produced, marketed, distributed, operated,
 p g , p ,p , , , p ,
maintained, serviced, and disposed of in order to maximize profits. 

Question 94 Which viewpoint of the product life-cycle is customer-value oriented?

Correct

Mark 1.00 out of Select one:

1.00
a. consumable life-cycle 

b. production life-cycle

c. marketing life-cycle

d. planning life-cycle

Question 95 Life-cycle cost management emphasizes

Correct

Mark 1.00 out of Select one:

1.00
a. normal costing.

b. cost reduction 

c. cost control.

d. process costing.

Question 96 The Algonquin Company developed the following budgeted life-cycle income statement for two proposed products. Each
Correct product's life cycle is expected to be two years.

Mark 1.00 out of

1.00                                                             Product A                     Product B          Total

Sales                                                    P280,000                       P200,000          P480,000

Cost of goods sold                                200,000                         130,000            330,000

Gross profit                                          P 80,000                        P 70,000          P150,000

Period expenses:

Research and development                                                                                 (70,000)

Marketing                                                                                                            (50,000)

Life-cycle income                                                                                                P 30,000

A 10 percent return on sales is required for new products. Because the proposed products did not have a 10 percent
return on sales, the products were going to be dropped.

Relative to Product B, Product A requires more research and development costs but fewer resources to market the
product. Sixty percent of the research and development costs are traceable to Product A, and 30 percent of the marketing
costs are traceable to Product A.

If research and development costs and marketing costs are traced to each product, life-cycle income for Product A would
be

Select one:
a. 27,000

b. 38,000

c. 23,000 

d. 15,000
Question 97 The Algonquin Company developed the following budgeted life-cycle income statement for two proposed products. Each
Correct product's life cycle is expected to be two years.

Mark 1.00 out of

1.00                                                             Product A                     Product B          Total

Sales                                                    P280,000                       P200,000          P480,000

Cost of goods sold                                200,000                         130,000            330,000

Gross profit                                          P 80,000                        P 70,000          P150,000

Period expenses:

Research and development                                                                                 (70,000)

Marketing                                                                                                            (50,000)

Life-cycle income                                                                                                P 30,000

A 10 percent return on sales is required for new products. Because the proposed products did not have a 10 percent
return on sales, the products were going to be dropped.

Relative to Product B, Product A requires more research and development costs but fewer resources to market the
product. Sixty percent of the research and development costs are traceable to Product A, and 30 percent of the marketing
costs are traceable to Product A.

If research and development costs and marketing costs are traced to each product, life-cycle income for Product B would
be

Select one:
a. 35,000

b. 12,000

c. 7,000 

d. 20,000

Question 98 The Algonquin Company developed the following budgeted life-cycle income statement for two proposed products. Each
Correct product's life cycle is expected to be two years.

Mark 1.00 out of

1.00                                                             Product A                     Product B          Total

Sales                                                    P280,000                       P200,000          P480,000

Cost of goods sold                                200,000                         130,000            330,000

Gross profit                                          P 80,000                        P 70,000          P150,000

Period expenses:

Research and development                                                                                 (70,000)

Marketing                                                                                                            (50,000)

Life-cycle income                                                                                                P 30,000

A 10 percent return on sales is required for new products. Because the proposed products did not have a 10 percent
return on sales, the products were going to be dropped.

Relative to Product B, Product A requires more research and development costs but fewer resources to market the
product. Sixty percent of the research and development costs are traceable to Product A, and 30 percent of the marketing
costs are traceable to Product A.

Return on sales for Product A would be

Select one:
a. 8.2% 

b. 25%

c. 2.5%

d. 40%
Question 99 Luminous Company sells a product for P450 per unit. Its market share is 25 percent. The marketing manager feels that the
Correct market share can be increased to 33 percent with a reduction in price to P390. The product is currently earning a profit of
Mark 1.00 out of P72 per unit. The president of Luminous Company feels that the P72 profit per unit must be maintained. What is the
1.00 target price per unit?

Select one:
a. 450

b. 378

c. 318

d. 390 

Question 100 Dot Company sells a product for P225 per unit. Its market share is 20 percent. The marketing manager feels that the
Correct market share can be increased to 30 percent with a reduction in price to P195. The product is currently earning a profit of
Mark 1.00 out of P36 per unit. The president of Dot Company feels that the P36 profit per unit must be maintained. What is the target cost
1.00 per unit?

Select one:
a. 159 

b. 225

c. 195

d. 189

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