Chap005 - Chapter 05 - Activity-Based Management Chapter 05...

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Chapter 05 - Activity-Based Management Chapter 05 Activity-Based Management True / False Questions 1. Activity-Based Costing evaluates the costs and values of process activities to identify opportunities for improved efficiency. FALSE AACSB: Reflective Thinking AICPA FN: Measurement Difficulty: Medium Learning Objective: 1 2. By itself, Activity-Based Costing does not result in the process improvements that might be necessary to achieve desired efficiencies. TRUE AACSB: Reflective Thinking AICPA FN: Measurement Difficulty: Easy Learning Objective: 1 3. Target cost is the highest cost of a good or service that meets both customer needs and company profit goals. TRUE AACSB: Reflective Thinking AICPA FN: Measurement Difficulty: Easy Learning Objective: 2 4. Target cost is the selling price assigned to a product or service that allows the company to achieve a desired gross profit level. FALSE AACSB: Reflective Thinking AICPA FN: Measurement Difficulty: Medium Learning Objective: 2 5-1
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Chapter 05 - Activity-Based Management 5. A currently feasible cost is the cost of all current operations necessary to produce and deliver a product TRUE AACSB: Reflective Thinking AICPA FN: Measurement Difficulty: Medium Learning Objective: 2 6. Non-value-added activities do not contribute to customer perceived value. TRUE AACSB: Reflective Thinking AICPA FN: Measurement Difficulty: Easy Learning Objective: 3 7. Value-added activities enhance the value of production and services in the eyes of management while meeting the goals of the organization. FALSE AACSB: Reflective Thinking AICPA FN: Measurement Difficulty: Medium Learning Objective: 3 8. Producing units to build up inventory for future sales is a value-added activity. FALSE AACSB: Reflective Thinking AICPA FN: Measurement Difficulty: Easy Learning Objective: 3 5-2
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Chapter 05 - Activity-Based Management 9. Waiting time for processing is a source of non-value-added activity. TRUE AACSB: Reflective Thinking AICPA FN: Measurement Difficulty: Easy Learning Objective: 3 10. Processing payments from customers at Bell Atlantic is a value-added activity. TRUE AACSB: Reflective Thinking AICPA FN: Measurement Difficulty: Medium Learning Objective: 3 11. Transporting workers to work sites is an example of a value-added activity. FALSE AACSB: Reflective Thinking AICPA FN: Measurement Difficulty: Medium Learning Objective: 3 12. In general, approval processes tend to be non-value added. TRUE AACSB: Reflective Thinking AICPA FN: Measurement Difficulty: Medium Learning Objective: 3 5-3
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Chapter 05 - Activity-Based Management 13. Simply eliminating non-value-added activities without redesigning processes is unlikely to result in long-term benefits. TRUE
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This note was uploaded on 05/29/2011 for the course ACCOUNTING 102 taught by Professor Mohamed during the Spring '11 term at Faculty of English Commerce Ain Shams University.

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Chap005 - Chapter 05 - Activity-Based Management Chapter 05...

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