Cofission Electronics Make Small Electronic Parts

question 58

Multiple Choice

Cofission Electronics make small electronic parts.The management accountant at Cofission,Jasmine Vake,decides to implement an activity-based costing (ABC) system.She lists the following points to support her decision:
i.The recent cost report shows that the ratio of prime costs to manufacturing overhead cost is approximately 1:3
ii.Cofission is a small company.
iii.Cofission has three product lines: basic parts (parts that are common to many products and many suppliers) ,customised parts (electronic parts that are highly customised to very specialised electric motors) ,prototypes (where Cofission Electronics need to design as well as manufacture these specialized electronic parts) .iv.Cofission Electronics has recently implemented a flexible manufacturing system;this practically eliminates any setup costs;with this system,product customization takes very little additional time.You are not convinced that all of these points support Jasmine's decision.Which of the above points support the use of ABC in Cofission?

• A) i,ii and iii
• B) ii,iii and iv
• C) i and iii
• D) iii and iv

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Definitions:

Motivation

The process that initiates, guides, and maintains goal-oriented behaviors, involving biological, emotional, social, and cognitive forces.

Behavior Modification Therapy

A form of psychotherapy that aims to change undesirable behaviors through the use of learning techniques such as reinforcement.

Unconscious Motivating Forces

Internal drives and desires that influence behavior and thought processes without the individual’s conscious awareness.

Successive Approximation

A method of behavioral training that breaks down a desired behavior into smaller, achievable steps, reinforcing closer and closer approximations to the desired behavior.