Topic: Activity-Based Management

LO: 6

10. _____________________ is defined as the identification and selection of activities to maximize the value of the activities while minimizing their cost from the perspective of the final consumer.

Activity-based costing

Activity-based management

Strategic cost management

None of the above

Topic: Product Costing with Activity-Based Costing

LO: 2

3. Thomas, Inc. uses activity-based costing. The company produces two products, 001 and 002. Information relating to the two products is as follows:

	001	002
Units produced	38,000	50,000
Machine-hours	15,000	17,000
Direct labor-hours	16,000	24,000
Materials handling (number of moves)	8,000	12,000
Setups	10,000	14,000

The following costs are reported:

Materials handling	$320,000
Labor-related overhead	960,000
Setups	600,000

Setup costs assigned to 002 are: