THEORY
Which of the following declarations are true about activity‐based costing? *
2 points
1 only
2 only
Neither 1 nor 2
Both 1 and 2
ABC Co. produces and ships components via its own logistics operation to its central
manufacturing center from a wide variety of locations. It is attempting to identify the
correct cost driver for the cost pool called ‘part handling’. Which of the following would
be the correct figure to use? *
2 points
Average components per unit
Total number of components shipped
Average distance travelled by a component
Total components‐distance travelled
Which of the following activities within a bike manufacturer as value-added (VA) *
2 points
Inspecting completed bike.
Storing raw materials.
Machine setups.
Installing bindings on bike.
Packaging bike for shipment.
Reworking defective bike.
Productivity improvement is a primary objective of Strategic cost management , which
of the following principles may be applied to achieve this objective. Check all. *
2 points
Define their ‘Standard Operating Procedures’.
Eliminate non value adding activity
Eliminate forced idleness in interdependent process
Since productivity improvement must be seen from cost angle , factors related to quality and not
quantity must be ignoredshould be ignored.
Which statements are true regarding lifecycle costing? *
2 points
1, 2 and 4
2 and 3 only
1 and 3 only
1, 2, 3 and 4
Strategic Cost management encompasses which of the following ?Check all. *
2 points
Improve the strategic position of a firm.
Management's use of cost information for decisionmaking.
Continuous reduction and controlling of costs
Strategic cost management requires involvement of every employee
focuses on cost management only and does not include improvement in revenue management
it integrates business functions.
it is a permanent task that ensures continuous improvements.
Kaizen and activity based costing models are two related Strategic cost management
principles . Which of the following areas do these principles complement each other?
Check all. *
2 points
identification of cost drivers
identification of waste of time and resources and eliminating them on a continuous basis.
Identification of value adding and non value adding activities
Need of quantifiable data.
Of the following, which is the best reason for using activity-based costing?
2 points
To keep better track of overhead costs
To more accurately assign overhead costs to cost pools so that these costs are better controlled
To better assign overhead costs to products
To assign indirect service overhead costs to direct overhead cost pools
Which of the following statements is/are correct regarding lifecycle costing? *
2 points
1 and 2
2 only
2 and 3
1, 2 and 3
Which of the following are said to be benefits of lifecycle costing? *
2 points
It provides the true financial cost of a product
The length of the lifecycle can be shortened
Expensive errors can be avoided in that potentially failing products can be avoided
Lower costs can be achieved earlier by designing out costs
Better selling prices can be set
Decline stages of the lifecycle can be avoided
Which of the following statements are true regarding ABC and cost drivers? *
2 points
A and C
B and C
A and B
A, B and C
PROBLEMS
(1) Avoid using P100 for peso amount simply present 100.
(2) If you are referring to a negative value, present it as -10.
(3) Round off to two decimal value.
(4) Do not use commas in presenting numerical figures.
(5) If your answer is in percentage, present it like 10% or 10.10% (round off to two decimal value).
(6) Hand write your Solutions on a clean sheet of paper , scan or take a picture . Use a maximum of two
sheets. Submit all solutions through the last question (File Upload Question) in this google quiz .
ABC Leather Works, which manufactures saddles and other leather goods, has three
departments. The Assembly Department manufactures various leather products, such
as belts, purses, and saddle bags, using automated production process. The Saddle
Department produces handmade saddles and uses very little machinery. The Tanning
Department produces leather. The tanning process requires little in the way of labor or
machinery, but it does require space and process time. Due to the different production
processes in the three departments, the company uses three different cost drivers for
the application of manufacturing overhead. The cost drivers and overhead rates are
the following. How much is the applied manufacturing overhead in the Assembly
Department for Job No. 20? *
3 points
Your answer
A company produces items A and B. It is testing the use of Activity Based
Costing.Production set‐up costs are P12,000; total production will be 20,000 units of
each ofproducts A and B. Each run is 1,000 units of A or 5,000 units of B. *
3 points
Your answer
ABC Company uses activity-based costing. The company produces two products:
coats and hats. The yearly production and sales volume of coats is 8,000 units and of
hats is 6,000 units. There are three activity cost pools with the following expected
activities and estimated total costs. Using ABC, the cost per unit of coats is
approximately *
3 points
Your answer
What is the life cycle cost? *
3 points
Your answer
Using the data of ABC below, do the following.(a) Prepare a schedule showing the
computations of the activity-based overhead rates per cost driver. ( 3 points) (b)
Prepare a schedule assigning each activity’s overhead cost to the two products.(5
points)(c) Compute the overhead cost per unit for each product.(2 points) *
10 points
Add file
The inspection cost per unit for product Sam is equal to *
3 points
Your answer
What is the life‐cycle cost per unit? *
3 points
P3.22
P2.32
P3.07
P2.81
