Pts 1 dif moderate obj 12 3 nat aacsb reflective 73 a

PTS: 1 DIF: Moderate OBJ: 12-3
NAT: AACSB Reflective
73. A technique for improving performance of activities and processes that predicts activity costs as activity output
changes is called
a. value-added reporting.
b. activity flexible budgeting.
c. Kaizen costing.
d. benchmarking.
ANS: B PTS: 1 DIF: Easy OBJ: 12-3
NAT: AACSB Analytic
74. Rollo Company has developed cost formulas for the drivers of the following production activities:
Driver Activity Fixed Variable
Labor hours Materials $ -0- $20
Labor hours Labor -0- 10
Machine hours Maintenance 10,000 8
Machine hours Machining 50,000 2
Number of setups Inspections 30,000 200
Number of setups Setups -0- 300
Number of purchase orders Purchasing 75,000 3
12-18

The budgeted inspection cost for 20 setups is
PTS: 1 DIF: Moderate OBJ: 12-3 NAT: AACSB Analytic
75. Rollo Company has developed cost formulas for the drivers of the following production activities:
Driver Activity Fixed Variable
Labor hours Materials $ -0- $20
Labor hours Labor -0- 10
Machine hours Maintenance 10,000 8
Machine hours Machining 50,000 2
Number of setups Inspections 30,000 200
Number of setups Setups -0- 300
Number of purchase orders Purchasing 75,000 3
The activity levels are projected to be as follows:
Labor hours 1,000
Machine hours 5,000
Setups 100
Purchase orders 50
What is budgeted for this projected activity level?
PTS: 1 DIF: Difficult OBJ: 12-3 NAT: AACSB Analytic
76. Rollo Company has developed cost formulas for the drivers of the following production activities:
Driver Activity Fixed Variable
12-19

Labor hours Materials $ -0- $20
Labor hours Labor -0- 10
Machine hours Maintenance 10,000 8
Machine hours Machining 50,000 2
Number of setups Inspections 30,000 200
Number of setups Setups -0- 300
Number of purchase orders Purchasing 75,000 3
If the actual activity was 20 setups and the actual fixed cost for inspections was $28,000 and the variable cost for
inspections was $5,000, the total variance for inspections is