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Unformatted text preview: ch10 Student: ___________________________________________________________________________ 1. Activity-based cost management (ABM) uses the information provided by activity-based costing (ABC) to identify ways to improve operations. True False 2. Activity-based costing (ABC) can be used to provide information for managerial decision-making in service, merchandising, and manufacturing companies. True False 3. Storing materials, work-in-process items, and finished goods in inventory are essential, value-added activities in most companies. True False 4. In general, decreasing (or eliminating) the resources committed to nonvalue-added activities will decrease customer response time. True False 5. In general, the unit-level costs in an activity-based costing (ABC) system are variable costs. True False 6. In general, the capacity-level costs in an activity-based costing (ABC) system are variable costs. True False 7. Managerial decisions based on activity-based costing (ABC) information affect only volume-level, batch-level, and product-level costs. True False 8. The basic concepts involved in activity-based costing (ABC) can be used to determine customer profitability as well as product costs. True False 9. The cost driver rate is computed by dividing the total cost per activity by the estimated number of units produced. True False 10. Activity-based costing (ABC) techniques used to evaluate customer profitability can also be applied to evaluating suppliers. True False 11. The difference between the resources used and the resources supplied is called unused resource capacity in a typical activity-based cost management (ABM) system. True False 12. Unused resource capacity plus the amount of the resources used is equal to the amount of resources supplied. True False 13. Theoretical capacity is the amount of production possible assuming expected downtime for scheduled maintenance and normal breaks and vacations. True False 14. Theoretical capacity is the long-run expected volume based on reasonably attainable working conditions. True False 15. Unused capacity costs incurred for the benefit of a company's customers (e.g., meet seasonal demands) should be assigned to the customers that require (use) the excess capacity. True False 16. In general, managerial decisions affecting capacity-level costs and activities also affect volume-level, batch-level, and product-level cost and activities. True False 17. Tangible customer expectations include how the product's salespeople treat customers and the time required to deliver the product to the customer. True False 18. Quality can be defined as the degree to which a product or service performs as it was designed to. True False 19. A cost of quality system is based on the trade-off between incurring costs to meet product (or service) specifications and the costs of failing to meet those specifications....
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This note was uploaded on 07/10/2011 for the course ECON 1001 taught by Professor Cock during the Spring '11 term at Virginia Tech.
- Spring '11