1. Which of the following statements best describes the objective of kaizen costing?
a. To accumulate costs that are associated with a short-term or long-term project.
b. To determine all costs related to the quality of a product.
c. To reduce costs and improve quality through continuous improvement.
d. To simplify cost accounting in a just-in-time environment.

2. Which of the following statements best describes activity-based management?
a. ABM is an approach developed in response to the competitive pressures of today€™s global market.
b. ABM does not use activity-based costing to improve a business.
c. ABM is designed to set the goals and objectives of an organization.
d. ABM focuses on functional areas and products.

Use the following information to answer questions.

Viva Electronics produces and sells two products, VE1 and VE2. Viva incurred $168,000 overhead costs in a single cost pool. Viva allocates the overhead cost to each product based on the machine hours. The cost accountant gathered the following additional information about the overhead costs:

3. Which of the following statements is correct?
a. Machine-related costs are batch-level activities.
b. Engineering costs are unit-level activities.
c. Inspection and testing costs are organization sustaining activities.
d. Supervision and scheduling costs are facility sustaining activities.

Transcribed Image Text:

Cost Cost Driver $62,000 Machine hours per unit Machine-related costs Supervision and schedul- ing costs Scheduling hours 48,000 32,000 Engineering hours Engineering costs Inspection and testing Inspection and testing 26,000 hours $168,000 costs Total costs VE1 1,000 2 140 240 320 VE2 1,500 Units produced Machine hours per unit Scheduling hours Engineering hours Inspection and testing hours 180 260 200