Question

.1. The adoption of a 24/7 customer service help line is an example of a

1. product sustaining activity
2. customer value added activity
3. batch related activity
4. business value added activity
5. non value added activity

2.

Pound industries customer service dept follows up on a customer complaint by telephone inquiry. During a recent period, the dept initiated 10,000 calls and incurred costs of 312,000. Of these calls 3,800 were for the company’s wholesale operation, the remainder was for the retail division. Costs allocated to the wholesale operation are:

                a. 118,560

b. 31,200

c. 203,000

d. 0

e. 193,400

3.

. Rosend inc, appliance manufacturer is developing a new line of ovens that uses controlled laser technology. The research and testing costs associated with the new ovens is said to arise from a

a. unit level activity

b. competitive level activity

c. batch level activity

d. product sustaining activity

e. facility level activity

4.

. In comparison with a system that uses a single volume-based cost driver and activity-based costing system is preferred when a company has

a. existing variances from budgeted amounts

b. product line diversity and a large proportion of the unit level activities

c. a large proportion of non-unit activities

d. minimal product line diversity and a small proportion of non-unit level activities

e. product line diversity

5.

1. Burgoon uses an economic order quantity model and has determined an optimal order size of 500 units . Annual demand is 10,000 unites, ordering costs are $50 per order, and holding costs are $4 per untie. The company annual ordering and holding costs total:

1. 2000
2. B. 3000
3. 21000
4. 41000
5. Some other amount

6.

1. Which of he following does not minimize ordering costs when using JIT purchasing?
   1. A. reducing the number of vendors
   2. Negotiation long term supply agreements
   3. Making less frequent payments
   4. Maintaining a safety stock
   5. Eliminating inspections

1. 7. At the economic order quantity
   1. Total annual inventor costs holding costs and ordering costs are all minimized
   2. Total annual inventory costs and holding costs are minimized
   3. Total annual inventory costs are minimized and hold costs equal ordering costs
   4. Total annual inventory costs are minimized and holds costs exceed ordering costs
   5. Total annual inventory cost are minimized and ordering costs exceed holding costs

Answer 1

1. b ( Customer value added activity)

2. a ( 118560)

3. c ( batch level activity)

4. b(product line diversity and a large portion of unit level activities).

5. a (2000)

6. a( a reducing number of vendors)

7. c (Total annual inventory are minimized and hold costs equal ordering costs).