CPA REVIEW SCHOOL OF THE PHILIPPINES Manila MANAGEMENT ADVISORY SERVICES ACTIVITY-BASED COSTING THEORY 1.

An accounting system that collects financial and operating data on the basis of the underlying nature and extent of the cost drivers is a. Direct costing. c. Cycle-time costing. b. Activity-based costing. d. Variable costing. 2. The resource utili ed by a given product divided by the total amount of the resource available is called the a. Activity driver. c. Cost ob!ect. b. Consumption ratio. d. "ustaining activity. #. $hich of the follo%ing statements is true& a. The traditional approach to costing uses many different cost drivers. b. Costs that are indirect to products are by definition traceable directly to products. c. Costs that are indirect to products are traceable to some activity. d. All of the above statements are true. '. (ass customi ation can be achieved through the use of a. Activity-based costing. c. )lexible manufacturing systems. b. !ust-in-time inventory. d. all of the above. *. +rocess value analysis is a ,ey component of activity-based management that lin,s product costing and a. -eduction of the number of cost pools. b. Continuous improvement. c. Accumulation of heterogeneous cost pools. d. .verhead rates based on broad averages. /. An approach to developing ne% %ays to perform existing activities is called a. +rocess value analysis. c. Caveat analysis. b. -e-engineering. d. 0enchmar,ing. 1. A2n3 444444444444444 method first traces costs to a department and then to products. a. direct costing c. traditional costing b. absorption costing d. activity-based costing 5. A2n3444444444444444 method first traces costs to activities and then to products. a. direct costing c. traditional costing b. absorption costing d activity-based costing 6. 7niformly assigning the costs of resources to cost ob!ects %hen those resources are actually used in a nonuniform %ay is called a. overcosting. c. peanut-butter costing. b. undercosting. d. department costing. 18. An ob!ective of activity-based management is to a. eliminate the ma!ority of centrali ed activities in an organi ation. b. reduce or eliminate non-value-added activities incurred to ma,e a product or provide a service. c. institute responsibility accounting systems in decentrali ed organi ations. d. all of the above

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11. "ymptoms of an outdated cost system include all of the follo%ing 9:C9+T a. product costs change because of changes in financial reporting. b. products that are difficult to produce sho% little profit. c. competitors; prices appear unrealistically lo%. d. the company has a highly profitable niche all to itself. 12. Traditional overhead allocations result in %hich of the follo%ing situations& a. .verhead costs are assigned as period costs to manufacturing operations. b. <igh-volume products are assigned too much overhead= and lo%-volume products are assigned too little overhead. c. >o%-volume products are assigned too much= and high-volume products are assigned too little overhead. d. The resulting allocations cannot be used for financial reports. 1#. Traditionally= managers have focused cost reduction efforts on a. activities. b. processes. c. departments. d. costs.

1'. $hich of the follo%ing is ?.T a trait of a traditional cost management system& a. unit-based drivers c. allocation intensive b. focus on managing activities d. narro% and rigid product costing 1*. 7nit-level cost drivers are most appropriate as an overhead assignment base %hen a. several complex products are manufactured. b. only one product is manufactured. c. direct labor costs are lo%. d. factories produce a varied mix of products. 1/. $hich of the follo%ing is ?.T a sign of poor cost data& a. Competitors; prices for high-volume products appear much too high. b. The company seems to have a highly profitably niche all to itself. c. Customers don;t bal, at price increases for lo%-volume products. d. Competitors; prices for lo%-volume products appear much too high. 11. @n Activity-based Costing= %hich of the follo%ing %ould be considered a value-added activity& a. -epair of machines. c. 0oo,,eeping. b. 9ngineering designs. d. "torage of inventory. 15. @n the pharmaceutical or food industries= Auality control inspections %ould most li,ely be vie%ed as a. non-value-added activities. c. value-added-activities. b. business-value-added activities. d. process-efficiency activities. 16. A basic assumption of activity-based costing 2A0C3 is that a. All manufacturing costs vary directly %ith units of production. b. +roducts or services reAuire the performance of activities= and activities consume resources. c. .nly costs that respond to unit-level drivers are product costs. d. .nly variable costs are included in activity-cost pools. 28. Activity-based costing and generally accepted accounting principles differ in that A0C a. does not define product costs in the same manner as BAA+. b. cannot be used to compute an income statement= but BAA+ can. c. is concerned only %ith costs generated from automated processes= but BAA+ is concerned %ith costs generated from both manual and automated processes. d. information is useful only to managers= %hile BAA+ information is useful to all organi ational sta,eholders.

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21. A0C should be used in %hich of the follo%ing situations& a. single-product firms %ith multiple steps b. multiple-product firms %ith only a single process c. multiple-product firms %ith multiple processing steps d. in all manufacturing firms 22. All of the follo%ing are examples of non-value-added activities except: A. re%or,ing 0. handling C. assembling D. expediting 2#. +roducts ma,e diverse demands on resources because of differences in all of the follo%ing 9:C9+T a. volume. b. selling price. c. batch si e. d. complexity. 2'. The 7?@C79 feature of an A0C system is the emphasis on a. costing individual !obs. c. multiple-cost pools. b. department indirect-cost rates. d. individual activities. 2*. Design of an A0C system reAuires a. that the !ob bid process be redesigned. b. that a cause-and-effect relationship exists bet%een resource costs and individual activities. c. an ad!ustment to product mix. d. both 2b3 and 2c3. 2/. A0C systems create a. one large cost pool. b. homogenous activity-related cost pools. c. activity-cost pools %ith a broad focus. d. activity-cost pools containing many direct costs. 21. $hich of the follo%ing statements about activity-based costing is not true& a. Activity-based costing is useful for allocating mar,eting and distribution costs. b. Activity-based costing is more li,ely to result in ma!or differences from traditional costing systems if the firm manufactures only one product rather than multiple products. c. @n activity-based costing= cost drivers are %hat cause costs to be incurred. d. Activity-based costing differs from traditional costing systems in that products are not cross-subsidi ed. 25. @f activity-based costing is implemented in an organi ation %ithout any other changes being effected= total overhead costs %ill a. be reduced because of the elimination of non-value-added activities. b. be reduced because organi ational costs %ill not be assigned to products or services. c. be increased because of the need for additional people to gather information on cost drivers and cost pools. d. remain constant and simply be spread over products differently. 26. The use of activity-based costing normally results in a. "ubstantially greater unit costs for lo%-volume products than is reported by traditional product costing. b. "ubstantially lo%er unit costs for lo%-volume products than is reported by traditional product costing. c. Decreased setup costs being charged to lo%-volume products. d. 9Auali ing setup costs for all product lines. #8. 44444 are those performed each time a unit is produced or sold. a. 0atch-level activities. c. "ustaining activities. b. )acility-sustaining activities. d. 7nit-level activities.

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#1. $hat is the normal effect on the numbers of cost pools and allocation bases %hen an activitybased cost 2A0C3 system replaces a traditional cost system& a. b. c. d. Cost +ools ?o effect @ncrease ?o effect @ncrease Allocation 0ases ?o effect ?o effect @ncrease @ncrease #2. 0oo, Co. uses the activity-based costing approach for cost allocation and product costing purposes. +rinting= cutting= and binding functions ma,e up the manufacturing process. (achinery and eAuipment are arranged in operating cells that produce a complete product starting %ith ra% materials. $hich of the follo%ing are characteristic of 0oo;s activity-based costing approach& @. Cost drivers are used as a basis for cost allocation. @@. Costs are accumulated by department or function for purposes of product costing. @@@. Activities that do not add value to the product are identified and reduced to the extent possible. a. @ only. b. @ and @@. c. @ and @@@. d. @@ and @@@. ##. The ideal standard Auantity for nonvalue-added activities is a. the cost of resources acAuired in advance of usage b. practical capacity c. the currently attainable Auantity standard d. ero #'. 9xamples of activities at the unit level of costs includeD A. cutting= painting= and pac,aging C. designing= changing= and advertising 0. scheduling= setting up= and moving D. heating= lighting= and security #*. 44444 are those that a company performs %hen it ma,es a group of units . a. 0atch-level activities. c. "ustaining activities. b. )acility-sustaining activities. d. 7nit-level activities. #/. 9xamples of activities at the batch level of costs includeD A. cutting= painting= and pac,aging C. designing= changing= and advertising 0. scheduling= setting up= and moving D. heating= lighting= and security #1. @f E@T manufacturing is used= maintenance of the production eAuipment %ould be classified as a a. unit-level activity c. cell-level activity b. product-level activity d. facility-level activity #5. $hich of the follo%ing is not a type of sustaining activity& a. Capacity-sustaining. c. Distribution-channel sustaining. b. Customer-sustaining. d. 7nit-sustaining. #6. Testing a prototype of a ne% product is an example of a a. 7nit-level activity. c. +roduct-level activity. b. 0atch-level activity. d. .rgani ation-sustaining activity. '8. 9xamples of activities at the product level of costs includeD A. cutting= painting= and pac,aging C. designing= changing= and advertising 0. scheduling= setting up= and moving D. heating= lighting= and security '1. @n allocating variable costs to products= a. a volume-based cost driver should be used. b. direct labor hours should al%ays be used as the allocation base. c. a company should use the same allocation base that it uses for fixed costs. d. a company should never use more than one cost driver.

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+age '

'2. The follo%ing items are used in tracing costs in an A0C system. @n %hich order are they used& 213 cost ob!ect 223 cost driver 2#3 activity driver 2'3cost pool a. 1= 2= #= ' b. 2= #= '= 1 c. 2= '= #= 1 d. '= #= 1= 2 '#. 44444 relate to an entire plant as a %hole. a. 0atch-level activities. b. )acility-sustaining activities. c. "ustaining activities. d. 7nit-level activities.

''. 9xamples of activities at the plant level of costs includeD A. cutting= painting= and pac,aging C. designing= changing= and advertising 0. scheduling= setting up= and moving D. heating= lighting= and security '*. An item or event that has a cause-effect relationship %ith the incurrence of a variable cost is called a a. mixed cost. b. predictor. c. direct cost. d. cost driver. '/. $hich of the follo%ing is typically regarded as a cost driver in traditional accounting practices& a. number of purchase orders processed c. number of transactions processed b. number of customers served d. number of direct labor hours %or,ed '1. A cost pool is a. All of the costs of a particular department. b. All costs in a group such as variable costs or discretionary fixed costs. c. All costs related to a product or product line. d. All costs that have the same driver. '5. The activities that drive resource reAuirements are called the a. Activity drivers. c. -esource drivers. b. Cost ob!ects. d. "ustaining activities. '6. 444444444444444444 are causal factors that explain the consumption of overhead. a. Activity drivers b. Cost pools d. Cost catchers c. Cost ob!ectives *8. All of the follo%ing are unit-based activity drivers 9:C9+T a. machine hours b. number of setups c. number of units d. direct labor hours

*1. All of the follo%ing are nonunit-based activity drivers 9:C9+T a. number of setups c. number of inspections b. number of direct labor hours d. number of material moves *2. @n an activity-based costing system= %hat should be used to assign a department;s manufacturing overhead cost to products produced in varying lot si es& a. A single cause and effect relationship. c. -elative net sales values of the products. b. (ultiple cause and effect relationships. d. A product;s ability to bear cost allocations. *#. @n activity-based costing= preliminary cost allocations assign costs to a. departments. b. processes. c. products. d. activities. *'. @n activity-based costing= final cost allocations assign costs to a. departments. b. processes. c. products. d. activities.

PROBLEMS 1. A time-and-motion study revealed that it should ta,e 1 hour to produce a product that currently ta,es # hours to produce. >abor is F5 per hour. ?onvalue-added costs are a. F5 b. F1/ c. F2' d. F8

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+age *

2. "etup time for a product is six hours. A firm that uses E@T and produces the same product has reduced setup time to #8 minutes. "etup labor is F2' per hour. Value-added costs are a. F1'' b. F1#2 c. F2' d. F12 #. 9ach unit of product reAuires 5 gallons of ra% material. Due to scrap and re%or,= each unit has been averaging 6 gallons of ra% material. The ra% material costs F' per gallon. Valueadded costs are a. F2 b. F' c. F#2 d. F#/ '. A company ,eeps 28 days of ra% materials inventory on hand to avoid shutdo%ns due to ra% materials shortages. Carrying costs average F2=888 per day. A competitor ,eeps 18 days of inventory on hand the competitor;s carrying costs average F1=888 per day. Value-added costs are a. F'8=888 b. F28=888 c. F18=888 d. F8 *. ?e% -age Cosmetics has used a traditional cost accounting system to apply Auality control costs uniformly to all products at a rate of 1'.*G of direct labor cost. (onthly direct labor cost for "atin "heen ma,eup is F21=*88. @n an attempt to distribute Auality control costs more eAuitably= ?e% -age is considering activity-based costing. The monthly data sho%n in the chart belo% have been gathered for "atin "heen. Cuantity for Activity Cost Driver Cost -ates "atin "heen @ncoming material inspection Type of material F11.*8 per type 12 types @n-process inspection ?umber of units F8.1' per unit 11=*88 units +roduct certification +er order F11per order 2* orders The monthly Auality control cost assigned to "atin "heen ma,eup using activity-based costing is a. F55./' per order. b. F*2*.*8 lo%er than the cost using the traditional system. c. F5=*88.*8 d. F*2*.*8 higher than the cost using the traditional system. Cuestions / thru 5 are based on the follo%ing information. Dierich Company uses an activity-based costing system %ith three activity cost pools. The company has provided the follo%ing data concerning its costs and its activity based costing systemD CostsD (anufacturing overhead F/88=888 "elling and admin. expenses F228=888 Total F528=888 Distribution of resource consumptionD Activity Cost +ools .rder "i e Customer "upport .ther Total (anufacturing overhead 1*G 1*G 18G 188G "elling and admin. 9xpenses /8G 28G 28G 188G The H.therH activity cost pool consists of the costs of idle capacity and organi ation-sustaining costs. Iou have been as,ed to complete the first-stage allocation of costs to the activity cost pools. /. <o% much cost= in total= %ould be allocated in the first-stage allocation to the .rder "i e activity cost pool& a. F222=888 b. F#81=*88 c. F12#=888 d. F'62=888 1. <o% much cost= in total= should ?.T be allocated to orders and products in the second stage of the allocation process if the activity-based costing system is used for internal decisionma,ing& a. F52=888. b. F18'=888. c. F8. d. F1/'=888.

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+age /

5. <o% much cost= in total= %ould be allocated in the first-stage allocation to the Customer "upport activity cost pool& a. F#56=*88 b. F/1*=888 c. F1/'=888 d. F'6'=888 6. A>) Co. is an assisted-living facility that provides services in the form of residential space= meals= and other occupant assistance 2..A3 to its occupants. A>) currently uses a traditional cost account system that defines the service provided as assisted living= %ith service output measured in terms of occupant days. 9ach occupant is charged a daily rate eAual to A>);s annual cost of providing residential space= meals and ..A divided by total occupant days. <o%ever= an activity-based costing 2A0C3 analysis has revealed that occupant;s use of ..A varies substantially. This analysis determined that occupants could be grouped into three categories 2lo%= moderate= and high usage of ..A3 and that the activity driver of ..A is nursing hours. The driver of the other activities is occupant days. The follo%ing Auantitative information %as also providedD .ccupant category Annual .ccupant Days Annual ?ursing <ours >o% 7sage #/=888 68=888 (edium 7sage 15=888 68=888 <igh 7sage /=888 128=888 /8=888 #88=888 The total annual cost of ..A %as F1.* million= and the total annual cost of providing residential space and meals %as F1.2 million. Accordingly= the A0C analysis indicates that the daily costing rate should be a. F152.*8 for occupants in the lo%-usage category. b. F1'*.88 for occupants in the medium-usage category. c. F2'*.88 for occupants in the high-usage category. d. F/28.88 for all occupants. Cuestions 18 through 1# are based on the follo%ing information. Jebra Corporation has the follo%ing activitiesD creating bills of materials 20.(3= studying manufacturing capabilities= improving manufacturing processes= training employees= and designing tooling. The general ledger accounts reveal the follo%ing expenditures for manufacturing engineeringD "alaries F1*8=888 9Auipment 58=888 "upplies 28=888 Total F2*8=888 The eAuipment is used for t%o activitiesD improving processes and designing tooling. Thirty-five percent of the eAuipment;s time is used for improving processes and sixty-five percent is used for designing tools. The salaries are for t%o engineers. .ne is paid F188=888= %hile the other earns F*8=888. The F188=888 engineer spends '8G of his time training employees in ne% processes and /8G of his time on improving processes. The remaining engineer spends eAual time on all activities. "upplies are consumed in the follo%ing proportionsD Creating 0.(s 2*G "tudying capabilities 18G @mproving processes 28G Training employees 2*G Designing tooling 28G 18. $hat is the cost assigned to the creating 0.(s activity& a. F/2=*88 b. F1*=888 c. F51=*88 d. F2*8=888 11. $hat is the cost assigned to the improving processes activity& a. F2*8=888 b. F*8=888 c. F51=*88 12. $hat is the cost assigned to the training employees activity& a. F**=888 b. F2*8=888 c. F/2=*88 1#. $hat is the cost assigned to the designing tooling activity& d. F182=888 d. F1/2=*88

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+age 1

a. F1/2=*88

b. F//=888

c. F*8=888

d. F2*8=888

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+age 5

Cuestions 1' through 1/ are based on the follo%ing information. A company has identified the follo%ing overhead costs and cost drivers for the coming year. .verhead @tem Cost Driver 0udgeted Cost 0udgeted Activity >evel (achine setup ?o. of setups F 28=888 288 @nspection ?o. of inspections F1#8=888 /=*88 (aterial handling ?o. of material moves F 58=888 5=888 9ngineering 9ngineering hours F *8=888 1=888 F258=888 The follo%ing information %as collected on three !obs that %ere completed during the yearD Eob 181 Eob 182 Eob 18# Direct materials F*=888 F12=888 F5=888 Direct labor F2=888 F 2=888 F'=888 7nits completed 188 *8 288 ?umber of setups 1 2 ' ?umber of inspections 28 18 #8 ?umber of material moves #8 18 *8 9ngineering hours 18 *8 18 0udgeted direct labor cost %as F188=888= and budgeted direct material cost %as F258=888. 1'. @f the company uses activity-based costing= ho% much overhead cost should be allocable to Eob 181& a. F1=#88 b. F2=888 c. F*=888 d. F*=/88 1*. @f the company uses activity-based costing= compute the cost of each unit of Eob 182. a. F#'8 b. F#62 c. F''8 d. F*28 1/. The company prices its products at 1'8G of cost. @f the company uses activity-based costing= the price of each unit of Eob 18# %ould be a. F65 b. F188 c. F11/ d. F1'8 Cuestions 11 thru 22 are based on the follo%ing information "pecial +roducts recently installed an activity-based relational data base. 7sing the information contained in the activity relational table= the follo%ing pool rates %ere computedD F288 per purchase order F12 per machine hour= process A F1* per machine hour= process 0 F'8 per engineering hour T%o products are produced by "pecial +roductsD A and 0. 9ach product has an area in the plant that is dedicated to its production. The plant has t%o manufacturing processes= process A and process 0. .ther processes include engineering= product handling and procurement. The product relational table for "pecial is as follo%sD Activity 7sage Activity Driver K ?ame +roduct A +roduct 0 1 7nits 288=888 2*=888 2 +urchase orders 2*8 12* # (achine hours 58=888 18=888 ' 9ngineering hours 1=2*8 1=*88 11. <o% much overhead cost %ill be assigned to product A using the number of purchase orders& a. F*8=888 b. F2*=888 c. F'8=888=888 d. F//=1*8 15. <o% much overhead cost %ill be assigned to product 0 using engineering hours& a. F*8=888 b. F/8=888 c. F1=888=888 d. F'88=*88 16. <o% much overhead cost %ill be assigned to product A using process A& a. F1=288=888 b. F2='88=888 c. F6/8=888 d. F128=888 28. <o% much overhead cost %ill be assigned to product 0 using process 0& a. F1=288=888 b. F6/8=888 c. F128=888 d. F1*8=888

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+age 6

21. $hat is the unit cost of +roduct A& a. F'.11 b. F#.1/ 22. $hat is the unit cost of +roduct 0& a. F6.'8 b. F/.88

c. F2*2.88 c. F2*2.88

d. F*.#8 d. F/.'1

Cuestions 2# thru 2/ are based on the follo%ing information. Acton Company has t%o productsD A and 0. The annual production and sales of +roduct A is 588 units and of +roduct 0 is *88 units. The company has traditionally used direct labor-hours as the basis for applying all manufacturing overhead to products. +roduct A reAuires 8.# direct labor hours per unit and +roduct 0 reAuires 8.2 direct labor hours per unit. The total estimated overhead for next period is F62=82#. The company is considering s%itching to an activity-based costing system for the purpose of computing unit product costs for external reports. The ne% activity-based costing system %ould have three overhead activity cost pools--Activity 1= Activity 2= and Beneral )actory--%ith estimated overhead costs and expected activity as follo%sD 9stimated 9xpected Activity Activity Cost +ool .verhead Costs +roduct A +roduct 0 Total Activity 1 F1'='51 *88 /88 1=188 Activity 2 F/'=588 2=*88 *88 #=888 Beneral )actory F12=1#/ 2'8 188 #'8 Total F62=82# 2?oteD The Beneral )actory activity cost poolLs costs are allocated on the basis of direct labor hours.3 2#. The predetermined overhead rate under the traditional costing system is closest toD a. F#1.'/. b. F21./8. c. F1#.11. d. F218.//. 2'. The overhead cost per unit of +roduct 0 under the traditional costing system is closest toD a. F*'.1#. b. F1.'6. c. F'.#2. d. F2./#. 2*. .The predetermined overhead rate 2i.e.= activity rate3 for Activity 1 under the activity-based costing system is closest toD a. F25.61. b. F1#.11. c. F5#.//. d. F2'.1*. 2/.The overhead cost per unit of +roduct A under the activity-based costing system is closest toD a. F5/.61. b. F18.16. c. F51.28. d. F11.2'. Cuestion 21 through #8 are based on the follo%ing information. This information %as presented as part of Cuestion # on +art # of the Eune 1662 C(A examination= %hich covered activity-based costing. Alaire Corporation manufactures several different types of printed circuit boardsD ho%ever= t%o of the boards account for the ma!ority of the company;s sales. The first of these boards= a television 2TV3 circuit board= has been a standard in the industry for several years. The mar,et for this type of board is competitive and therefore price-sensitive. Alaire plans to sell /*=888 of the TV boards in 166# at a price of F1*8 per unit. The second high-volume product= a persona computer 2+C3 circuit board= is a recent addition to Alaire;s product line. 0ecause the +C board incorporates the latest technology= it can be sold at a premium price= plans include the sale of '8=888 +C boards at F#88 per unit. Alaire;s management group is meeting to discuss strategies for 166#= and the current topic of conversation is ho% to spend the sales and promotion dollars for next year. The sales manager believe that the mar,et share for the TV board could be expanded by concentrating Alaire;s promotional efforts in this area. @n response to this suggestion= the production manager said= M$hy don;t you go after a bigger mar,et for the +V board& The cost sheets that @ get sho% a premium price for the +C board= selling it should help overall profitability.N Alaire uses a standard cost system= and the follo%ing data apply to the TV and +C boards.

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+age 18

TV 0oard +C 0oard Direct materials F58 F1'8 Direct labor 1.* hours '.8 hours (achine time 8.* hours 1.* hours Variable factory overhead is applied on the basis of direct labor hours. )or 166#= variable factory is budgeted at F1=128=888= and direct labor hours are estimated at 258=888. The hourly rates for machine time and direct labor are F18 and F1'= respectively. Alaire applies a material handling charge at 18G of materials cost= thus materials handling charge is not included in variable factory overhead. Total 166# expenditures for materials are budgeted at F18=/88=888. 9d $atch= Alaire;s controller= believes that= the management group proceeds %ith the discussion about allocating sales and promotional dollars to individual products= they should consider the activities involved in the production. As $elch explained to the group= MActivity-based costing integrates the cost of all activities= ,no%n as cost drivers= into individual product costs rather than including these costs in overhead pools.N $elch has prepared the schedule sho%n belo% to help the management group understand this concept. M7sing this information=N $elch explained= M%e can calculate an activity-based cost for each TV board and each +C board and then compare it to the standard cost %e have bee using. The only cost that remains the same for both cost methods is the cost of direct materials. The cost drivers %ill replace the direct labor= machine time= and overhead costs in the standard cost.N Annual Activity 0udgeted Cost Cost Driver for Cost Driver (aterials overheadD +rocurement F'88=888 ?o. of parts '=888=888 parts +roduction scheduling 228=888 ?o. of boards 118=888 boards +ac,aging O shipping ''8=888 ?o. of boards 118=888 boards F1=8/8=888 Variable overheadD (achine setup F''/=888 ?o. of setups 215=1*8 setups <a ardous %aste disposal '5=888 >bs. of %aste 1/=888 lbs. Cuality control */8=888 ?o. of inspections 1/8=888 inspect;ns Beneral supplies //=888 ?o. of boards 118=888 boards F1=128=888 (anufacturingD (achine insertion F1=288=888 ?o. of parts #=888=888 parts (anual insertion '=888=888 ?o. of parts 1=888=888 parts $ave soldering 1#2=888 ?o. of boards 118=888 boards F*=##2=888 -eAuired per unit TV 0oard +C 0oards +arts 2* ** (achine insertions 2' #* (anual insertions 1 28 (achine setups 2 # <a ardous %aste 8.82 lbs. 8.#* lbs. @nspections 1 2 21. .n the basis of standard costs= the total contribution budgeted for the TV board is a. F1=6*8=888 b. F2=21*=888 c. F2=#'8=888 d. F2='18=888 25. .n the basis of activity-based costs 2A0C3= the total contribution budgeted for the TV board is a. F1=*6'=888 b. F1=6*8=888 c. F2=8#1=188 d. F2=**1=188 26. .n the basis of standard costs= the total contribution budgeted for the +C board is a. F#=888=888 b. F2=6/8=888 c. F2=628=888 d. F2=#/8=888 #8. .n the basis of activity-based costs= the total contribution budgeted for the +C board is a. +1=*6'=888 b. F1=6*8=888 c. F2=#/8=888 d. F2=**1=188

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+age 11

Answ ! " # T$ %!# 1. 0 2. 0 #. C '. C *. 0 /. 0 1. C 5. D 6. C 18. 0 P!%&l 's 1. 0 2. D #. C '. D *. D /. A 1. 0 5. D 6. A 18. 0 11. 12. 1#. 1'. 1*. 1/. 11. 15. 16. 28. 11. 12. 1#. 1'. 1*. 1/. 11. 15. 16. 28. 0 0 D 0 0 A 0 C 0 A D A 0 A A A A 0 C D 21. 22. 2#. 2'. 2*. 2/. 21. 25. 26. #8. 21. 22. 2#. 2'. 2*. 2/. 21. 25. 26. #8. C C 0 D 0 0 0 D A D D A D A 0 A A D D A #1. #2. ##. #'. #*. #/. #1. #5. #6. '8. D C D A A 0 C D C C '1. '2. '#. ''. '*. '/. '1. '5. '6. *8. A C 0 D D D D C A 0 *1. *2. *#. *'. 0 0 D C

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+age 12