Which of the following statements about activity based costing is true?

Which TWO of the following statements about activity based costing (ABC) are True?

Which of the following statements about target costing is/are False?

1. A risk with target costing is that cost reductions may affect the perceived value of the product.
2. An effective way of reducing the projected cost of a new product is to simplify the design.
3. The value of target costing depends on having reliable estimates of sales demand.
4. Target costing may be applied to services that are provided free of charge to customers, such as costs of call centre handling.

Product YZ2 is made in a production process where machine time is a bottleneck resource. Production of one unit of Product YZ2 takes 0.25 machine hours.

The costs and selling price of Product YZ2 are as follows:

In a system of throughput accounting, what is the return per factory hour (to two decimal places)?

The selling price of Product X is set at $550 for each unit and sales for the coming year are expected to be 800 units.

A return of 30% on the investment of $500,000 in Product X will be required in the coming year.

What is the target cost for each unit of Product X (to two decimal places)?

The following data refers to a soft drinks manufacturing company that passes its product through four processes and is currently operating at optimal capacity.

Which process is the bottleneck?

The following statements have been made about throughput accounting.

1. Direct labour should always be treated as a factory cost when measuring throughput.
2. If machine time is the bottleneck resource, there is no value in taking measures to improve direct labour efficiency.

Which of the above statements is/are true?

The following estimates have been produced for a new product with an expected life of four years.

What is the expected life cycle cost per unit (to two decimal places)?

One of the products manufactured by a company is Product X, which sells for $40 per unit and has a material cost of $10 per unit and a direct labour cost of $7 per unit. The total direct labour budget for the year is 50,000 hours of labour time at a cost of $12 per hour.
Factory overheads are $2,920,000 per year.

The company is considering the introduction of a system of throughput accounting. It has identified that machine time is the bottleneck in production. Product X needs 0.01 hours of machine time per unit produced. The maximum capacity for machine time is 4,000 hours per year.

What is the throughput accounting ratio for Product X (to two decimal places)?

In which of the following ways might financial returns be improved over the life cycle of a product?

1. Maximising the breakeven time
2. Minimising the time to market
3. Minimising the length of the life cycle

In material flow cost accounting (MFCA), which of the following is NOT a category used?

Which TWO of the following costs are likely to rise when just-in-time (JIT) manufacturing is introduced?

In environmental costing, the future cost of cleaning up operations for a product or activity may be classified as which of the following?

Which of the following should be categorised as environmental failure costs by an airline company?

1. Compensation payments to residents living close to airports for noise pollution caused by their aircraft
2. Air pollution due to the airline's carbon emissions from their aircraft engines
3. Penalties paid by the airline to the government for breaching environmental regulations

A company manufactures Product Q, which sells for $50 per unit and has a material cost of $14 per unit and a direct labour cost of $10 per unit. The total direct labour budget for the year is 18,000 hours of labour time at a cost of $10 per hour. Factory overheads are $1,620,000 per year. The company has identified machine time as the bottleneck in production. Product Q needs 0.05 hours of machine time per unit produced. The maximum capacity for machine time is 6,000 hours per year.

What is the throughput accounting ratio for Product Q (to one decimal place)?

The following costs have arisen in relation to the production of a product:

1. Planning and concept design costs
2. Testing costs
3. Production costs
4. Distribution and customer service costs

In calculating the life cycle costs of a product, which of the above items would be included?

Which TWO of the following statements about life cycle costing are true?

Which of the following statements about environmental cost accounting is/are FALSE?

1. The majority of environmental costs are already captured within a typical organisation's accounting system. The difficulty lies in identifying them.
2. Input/output analysis divides material flows within an organisation into three categories: material flows; system flows; and delivery and disposal flows.

The following statements have been made about traditional absorption costing and activity based costing (ABC).

1. Traditional absorption costing may be used to set prices for products, but activity based costing cannot.
2. Traditional absorption costing tends to allocate too many overhead costs to low-volume products and not enough overheads to high-volume products.
3. Implementing ABC is expensive and time consuming

Which of the above statements is/are true?

Which TWO of the following statements about activity based costing (ABC) are true?

The following information relates to the expected cost of a new product over its expected three-year life.

What is the expected average life cycle cost per unit?

ABC is felt to give a more useful product cost than classic absorption costing (with overheads absorbed on labour hours) if which of the following TWO apply?

Which of the following statements about target costing is NOT true?

The following statements have been made about throughput accounting.

1. Inventory has no value and should be valued at $0.
2. Efficiency is maximised by utilising direct labour time and machine time to full capacity.

Which of the above statements is/are true?

In the theory of constraints and throughput accounting, which of the following methods may be used to elevate the performance of a binding constraint?

Method 1: Acquire more of the resource that is the binding constraint

Method 2: Improve the efficiency of usage of the resource that is the binding constraint

Which of the following statements about material flow cost accounting (MFCA) is/are True?

1. In material flow cost accounting, waste is treated as a negative product and given a cost.
2. Material flow cost accounting should encourage management to focus on ways of achieving the same amount of finished output with less material input.

Which TWO of the following statements about throughput accounting and the theory of constraints are true?

Budget information relating to a company that manufactures four products is as follows.

Only 750 machine hours are available during the period. Applying the principles of throughput accounting, how many units of Product B should be made if the company produces output to maximise throughput and profit?

Which of the following statements about environmental management accounting is/are True?

1. A system of environmental management accounting provides environmental information for internal use by management, but not for external reporting.
2. Environmental management accounting systems typically make use of life cycle costing.

A company has a target mark-up of 25% and sells into a competitive market where the market price is $120 per unit. The company's current costs per unit are $46 for variable costs and $60 for fixed costs, and it has a budgeted output of 10,000 units.

What is the minimum production required to close the target cost gap?