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    Cost Accounting Hilton 6

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    The document contains questions and answers related to cost accounting concepts like target costing, kaizen costing, activity-based costing, and benchmarking. Kaizen costing refers to small, continual cost reductions during the manufacturing phase of a product. Activity-based costing is used to allocate costs like wages, salaries, and overhead to activities and cost objects like making bouquets and deliveries. Benchmarking involves comparing a company's performance to other organizations.

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    Cost Accounting Hilton 6

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    50 views3 pages
    The document contains questions and answers related to cost accounting concepts like target costing, kaizen costing, activity-based costing, and benchmarking. Kaizen costing refers to small, continual cost reductions during the manufacturing phase of a product. Activity-based costing is used to allocate costs like wages, salaries, and overhead to activities and cost objects like making bouquets and deliveries. Benchmarking involves comparing a company's performance to other organizations.

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    The document contains questions and answers related to cost accounting concepts like target costing, kaizen costing, activity-based costing, and benchmarking. Kaizen costing refers to small, continual cost reductions during the manufacturing phase of a product. Activity-based costing is used to allocate costs like wages, salaries, and overhead to activities and cost objects like making bouquets and deliveries. Benchmarking involves comparing a company's performance to other organizations.

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    Download as docx, pdf, or txt
    50 views3 pages

    Cost Accounting Hilton 6

    Uploaded by

    vkdoc
    The document contains questions and answers related to cost accounting concepts like target costing, kaizen costing, activity-based costing, and benchmarking. Kaizen costing refers to small, continual cost reductions during the manufacturing phase of a product. Activity-based costing is used to allocate costs like wages, salaries, and overhead to activities and cost objects like making bouquets and deliveries. Benchmarking involves comparing a company's performance to other organizations.

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    You are on page 1of 3

    16.Collins Corporation uses target costing and sells a product for $50 per unit.

    The company seeks a


    profit margin equal to 40% of sales. If target-costing calculations revealed a need for a $5 cost
    reduction, the firm's current manufacturing cost must be:
    A. $20.
    B. $25.
    C. $30.
    D. $35.
    E. some other amount.

    Answer: D LO: 5 Type: A


    17. The process of continual cost reduction during the manufacturing phase of an existing
    product is termed:
    A. kaizen costing.
    B. product costing.
    C. target costing.
    D. market costing.
    E. strategic costing.

    Answer: A LO: 6 Type: RC

    18. Kaizen costing refers to:


    A. radical cost reductions during the design phase of a product.
    B. radical cost reductions during the manufacturing phase of a product.
    C. small, continual cost reductions during the design phase of a product.
    D. small, continual cost reductions during the manufacturing phase of a product.
    E. the use of operational costing in out-of-control manufacturing situations.

    Answer: D LO: 6 Type: RC

    19. Which of the following would least likely be a feature or goal that is associated with a kaizen-
    costing program?
    A. Elimination of waste.
    B. Use of overhead application rates.
    C. Implementation of employee suggestions.
    D. Improvements in production time.
    E. Reduction of non-value-added activities and costs.

    Answer: B LO: 6 Type: RC

    20. The comparison of a company's practices and performance levels against those of other
    organizations is most commonly known as:
    A. benchmarking.
    B. continuous improvement.
    C. re-engineering.
    D. comparative analysis.
    E. kaizen business analysis (KBA).

    Answer: A LO: 7 Type: RC

    16.Alamo's customer service department follows up on customer complaints by telephone inquiry.


    During a recent period, the department initiated 7,000 calls and incurred costs of $203,000. If
    2,940 of these calls were for the company's wholesale operation (the remainder were for the retail
    division), costs allocated to the retail division should amount to:
    A. $0.
    B. $29.
    C. $85,260.
    D. $117,740.
    E. $203,000.

    Answer: D LO: 4 Type: A


    Use the following to answer questions 17-18:

    Riverside Florists uses an activity-based costing system to compute the cost of making floral bouquets
    and delivering the bouquets to its commercial customers. Company personnel who earn $180,000
    typically perform both tasks; other firm-wide overhead is expected to total $70,000. These costs are
    allocated as follows:

    Bouquet
    Production Delivery Other
    Wages and salaries 60% 30% 10%
    Other overhead 50% 35% 15%

    Riverside anticipates making 20,000 bouquets and 4,000 deliveries in the upcoming year.

    17. The cost of wages and salaries and other overhead that would be charged to each bouquet made
    is:
    A. $7.15.
    B. $8.75.
    C. $12.50.
    D. $13.75.
    E. some other amount.

    Answer: A LO: 4 Type: A

    18. The cost of wages and salaries and other overhead that would be charged to each delivery is:
    A. $19.63.
    B. $20.31.
    C. $26.75.
    D. $40.63.
    E. some other amount.

    Answer: A LO: 4 Type: A


    Use the following to answer questions 19-27:

    HiTech Products manufactures three types of remote-control devices: Economy, Standard, and Deluxe.
    The company, which uses activity-based costing, has identified five activities (and related cost drivers).
    Each activity, its budgeted cost, and related cost driver is identified below.

    Activity Cost Cost Driver


    Material handling $ 225,000 Number of parts
    Material insertion 2,475,000 Number of parts
    Automated machinery 840,000 Machine hours
    Finishing 170,000 Direct labor hours
    Packaging 170,000 Orders shipped
    Total $3,880,000

    The following information pertains to the three product lines for next year:

    Economy Standard Deluxe


    Units to be produced 10,000 5,000 2,000
    Orders to be shipped 1,000 500 200
    Number of parts per unit 10 15 25
    Machine hours per unit 1 3 5
    Labor hours per unit 2 2 2

    19. What is HiTech's cost application rate for the material-handling activity?
    A. $1.00 per part.
    B. $2.25 per part.
    C. $6.62 per labor hour.
    D. $13.23 per part.
    E. A rate other than those listed above.

    Answer: A LO: 4 Type: A

    20. What is HiTech's cost application rate for the automated machinery activity?
    A. $24.00 per machine hour.
    B. $24.50 per labor hour.
    C. $49.42 per unit.
    D. $50.00 per machine hour.
    E. A rate other than those listed above.

    Answer: A LO: 4 Type: A

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