1. 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:

$0.?

$29.?

$85,260.?

$117,740.?

$203,000.

2. Activity-based costing systems:

use a single, volume-based cost driver.?

assign overhead to products based on the products' relative usage of direct labor.?

often reveal products that were under- or over-costed by traditional costing systems.?

typically use fewer cost drivers than more traditional costing systems.?

have a tendency to distort product costs.

3. Which of the following does not minimize ordering costs when using JIT purchasing?

Reducing the number of vendors.?

Negotiating long-term supply agreements.?

Making less frequent payments.?

Maintaining a safety stock.?

Eliminating inspections.?

4. Inventory holding costs typically include:

clerical costs of purchase-order preparation.?

costs of deterioration, theft, or spoilage.?

costs associated with lost sales to customers.?

forgone interest on money tied up in inventory.?

costs of deterioration, theft, or spoilage and forgone interest on money tied up in inventory.?

5.Feinstein, Inc., an 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:

unit-level activity.?

batch-level activity.?

product-sustaining activity.?

facility-level activity.?

competitive-level activity.?