1. An objective of activity-based management (ABM) is to a. Eliminate the majority of centralized activities in an organizationb. Institute responsibility accounting systems in decentralized organizationsc. Reduce or eliminate non-value-added activities done to make a product or provide a serviced. All of the above 2. What is a non-value-adding cost? a. Usually direct to a product c. Unavoidableb. The same as a discretionary cost d. Not essential to manufacturing a product3. A tool that focuses on manufacturing processes and seeks to optimize the activities performed within the process isa. Process value analysis c. Benchmarkingb. Re-engineering d. None of the above4. What would be a value-added employee in a construction firm?a. An accountant c. A painterb. A secretary d. All of the above5. A well-designed Activity-Based Costing (ABC) system helps managers make better decisions because information derived from an ABC analysis: a. Is easy to analyze and interpretb. Emphasizes how managers can achieve higher salesc. Can be used to reduce or eliminate non-value-added activities d. Take the choices and judgment challenges away from the managers6. Which of the following is least likely classified as a unit-level activity? a. Peso sales c. Direct labor hours b. Production volume d. Number of inspections 7. Which level of costs should NOT be included in product costs (mainly because indirect to product line segment) for internal management reports that are used for decision making?a. Unit-level activities c. Product-level activities b. Batch-level activities d. Facility-level activities 8. These activities arise because a company does or maintains a particular type of business or product. a. Batch-level activities c. Sustaining activities b. Facility-sustaining activities d. Unit-level activities 9. Property taxes and insurance is an example of a cost that would be considered to be a. Unit-level c. Product-level b. Batch-level d. Organization-sustaining 10. Which of the following is typically regarded as a cost driver in traditional costing practices?a. Number of purchase order processed c. Number of transactions processed b. Number of customers served d. Number of direct labor hours workedAccounting Business Cost Accounting LIT 102
