Accounting Information Systems
10th Edition
ISBN: 9781337619202
Author: Hall, James A.
Publisher: Cengage Learning,
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Question
Chapter 13, Problem 4MCQ
To determine
Identify the statement which is not considered as a part of system survey.
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The owner of Nia Systems suspects her allocation of indirect costs could be giving misleading results, so she decides to develop an ABC system. She identifies three activities: documentation preparation, information technology support, and training. She figures that documentation costs are driven by the number of pages, information technology support costs are driven by the number of software applications used, and training costs are driven by the number of direct labor hours worked.Estimates of the costs and quantities of the allocation bases follow:
Activity
Estimated Costs
Allocation Base
Estimated Quantity of Allocation Base
Documentation preparation
$47,400
Pages
1,530 pages
Information technology support
$120,600
Applications
700 applications
Training
$354,800
Direct labor hours
3,240 hours
Total Indirect costs
$522,800
1. Compute the predetermined overhead allocation rate for each activity. Round to the nearest dollar.
Activity
Total estimated overhead…
Which of the following activities would be classified as a batch -level activity
a. Training employees .
b . Designing a new product .
c. None of the given answer .
d . Setting up equipment .
Internal auditors would most appropriately perform which of the following activities during a review of systems development activity?a. Serve on the MIS steering committee that determines what new systems are to be developed.b. Review the methodology used to monitor and control the system development function. c. Recommend specific automated procedures to be incorporated into new systems that will provide reasonable assurance that all data submitted to an application are converted to machine-readable form.d. Recommend specific operational procedures that will ensure that all data submitted for processing are converted to machine-readable form.
Chapter 13 Solutions
Accounting Information Systems
Ch. 13 - Prob. 1RQCh. 13 - What is the role of the accountant in the SDLC?...Ch. 13 - Prob. 3RQCh. 13 - Prob. 4RQCh. 13 - Prob. 5RQCh. 13 - What is strategic systems planning, and why should...Ch. 13 - Prob. 7RQCh. 13 - Prob. 8RQCh. 13 - What are the broad classes of facts that need to...Ch. 13 - Prob. 10RQ
Ch. 13 - Prob. 11RQCh. 13 - Prob. 12RQCh. 13 - What are some of the key documents that may be...Ch. 13 - Prob. 14RQCh. 13 - What is the primary objective of the conceptual...Ch. 13 - Prob. 16RQCh. 13 - How much design detail is needed in the conceptual...Ch. 13 - Prob. 18RQCh. 13 - What is operational feasibility and what problems...Ch. 13 - What makes the cost-benefit analysis more...Ch. 13 - Prob. 21RQCh. 13 - Prob. 22RQCh. 13 - Discuss the relative merits of in-house...Ch. 13 - Prob. 24RQCh. 13 - Prob. 25RQCh. 13 - Comment on the following statement: The...Ch. 13 - Prob. 2DQCh. 13 - Is a good strategic plan detail oriented?Ch. 13 - Prob. 4DQCh. 13 - What purposes does the systems project proposal...Ch. 13 - Most firms underestimate the cost and time...Ch. 13 - A lack of support by top management has led to the...Ch. 13 - Many new systems projects grossly underestimate...Ch. 13 - Prob. 9DQCh. 13 - Intangible benefits are usually extremely...Ch. 13 - Prob. 11DQCh. 13 - Prob. 12DQCh. 13 - Prob. 13DQCh. 13 - Run manuals for computer operators are similar in...Ch. 13 - Who conducts the postimplementation review? When...Ch. 13 - Discuss the importance of involving accountants in...Ch. 13 - User test and acceptance is part of which phase of...Ch. 13 - The TELOS study that determines whether a project...Ch. 13 - Prob. 3MCQCh. 13 - Prob. 4MCQCh. 13 - A feasibility study for a new computer system...Ch. 13 - Prob. 6MCQCh. 13 - A systems development approach that starts with...Ch. 13 - Prob. 8MCQCh. 13 - Prob. 9MCQCh. 13 - Prob. 10MCQCh. 13 - Which of the following is the most important...Ch. 13 - The TELOS acronym is often used for determining...Ch. 13 - Prob. 13MCQCh. 13 - Which of the following represents the correct...Ch. 13 - Prob. 15MCQCh. 13 - One-time costs of system development include all...Ch. 13 - Prob. 17MCQCh. 13 - What name is given to the time value of money...Ch. 13 - ANNOUNCING A NEW INFORMATION SYSTEM The AJAX...Ch. 13 - SYSTEMS DEVELOPMENT AND IMPLEMENTATION Kruger...Ch. 13 - SYSTEMS ANALYSIS Consider the following dialogue...Ch. 13 - Prob. 4PCh. 13 - Prob. 6PCh. 13 - SYSTEMS SELECTION Your company. Kitchen Works, is...Ch. 13 - PROGRAM TESTING When program modules have been...Ch. 13 - Prob. 9PCh. 13 - Discuss three common approaches to system cut...Ch. 13 - FACT-GATHERING TECHNIQUES Your company. Tractors...Ch. 13 - COST-BENEFIT ANALYSIS Listed in the diagram for...
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- A feasibility study for a new computer system should a. consider costs, savings, controls, profit improvement, and other benefits analyzed by application area. b. provide the preliminary plan for converting existing manual systems and clerical operations. c. provide management with assurance from qualified, independent consultants that the use of a computer system appeared justified. d. include a report by the internal audit department that evaluated internal control features for each planned application.arrow_forwardClassify the following costs as typically direct (D) or indirect (I): Project staff Audit and legal Utilities Rent Raw materials Training on equipment Project supplies Labor Administrative staff Miscellaneous office supplies Quality assurance IT department Scheduled maintenance Shared software packagesarrow_forwardThe following describes the expenditure cycle for a hypothetical company.The company has a centralized computer system with terminals located in various departments. The terminals are networked to a computer application, and digital accounting records are hosted on a server in the data processing department. Each day, the computer in the data processing center scans the inventory records looking for items that must be replenished. For each item below its reorder point, the system creates a digital purchase order and prints two hard copies. A technician in the data center sends the purchase orders to the purchasing department clerk. Upon receipt of the purchase orders, the purchasing clerk reviews and signs them. He sends Copy 1 to the supplier and files Copy 2 in the purchases department.A few days later, the supplier ships the order and thegoods arrive at the receiving department. The receiving clerk reviews the digital purchase order from his terminal, inspects the goods, creates a…arrow_forward
- The actions listed next are associated with either an activity-based operational control system or a traditional operational control system: a. Budgeted costs for the maintenance department are compared with the actual costs of the maintenance department. b. The maintenance department manager receives a bonus for beating budget. c. The costs of resources are traced to activities and then to products. d. The purchasing department is set up as a responsibility center. e. Activities are identified and listed. f. Activities are categorized as adding or not adding value to the organization. g. A standard for a products material usage cost is set and compared against the products actual materials usage cost. h. The cost of performing an activity is tracked over time. i. The distance between moves is identified as the cause of materials handling cost. j. A purchasing agent is rewarded for buying parts below the standard price set by the company. k. The cost of the materials handling activity is reduced dramatically by redesigning the plant layout. l. An investigation is undertaken to find out why the actual labor cost for the production of 1,000 units is greater than the labor standard allowed. m. The percentage of defective units is calculated and tracked over time. n. Engineering has been given the charge to find a way to reduce setup time by 75 percent. o. The manager of the receiving department lays off two receiving clerks so that the fourth-quarter budget can be met. Required: Classify the preceding actions as belonging to either an activity-based operational control system or a traditional control system. Explain why you classified each action as you did.arrow_forwardClassify the following cost drivers as structural, executional, or operational. a. Number of plants b. Number of moves c. Degree of employee involvement d. Capacity utilization e. Number of product lines f. Number of distribution channels g. Engineering hours h. Direct labor hours i. Scope j. Product configuration k. Quality management approach l. Number of receiving orders m. Number of defective units n. Employee experience o. Types of process technologies p. Number of purchase orders q. Type and efficiency of layout r. Scale s. Number of functional departments t. Number of planning meetingsarrow_forwardIn a manufacturing process the assembly line speed (feet per minute) was thought to affect the number of defective parts found during the inspection process. To test this theory, managers devised a situation in which the same batch of parts was inspected visually at a variety of line speeds. They collected the following data: Develop a scatter chart with line speed as the independent variable. What does the scatter chart indicate about the relationship between line speed and the number of defective parts found? Use the data to develop an estimated regression equation that could be used to predict the number of defective parts found, given the line speed. What is the estimated regression model? Test whether each of the regression parameters β0 and β1 is equal to zero at a 0.01 level of significance. What are the correct interpretations of the estimated regression parameters? Are these interpretations reasonable? How much of the variation in the number of defective parts found for the sample data does the model you estimated in part (b) explain?arrow_forward
- Nonunit-level drivers are prominent in activity-based coting systems. Which of the following is a nonunit-level driver? a. Machine hours b. Direct materials c. Assembly hours d. Setup hoursarrow_forwardThe following items are associated with a traditional cost accounting information system, an activity-based cost accounting information system, or both (that is, some elements are common to the two systems): a. Usage of direct materials b. Direct materials cost assigned to products using direct tracing c. Direct labor cost incurrence d. Direct labor cost assigned to products using direct tracing e. Setup cost incurrence f. Setup cost assigned using number of setups as the activity driver g. Setup cost assigned using direct labor hours as the activity driver h. Cost accounting personnel i. Submission of a bid, using product cost plus 25 percent j. Purchasing cost incurrence k. Purchasing cost assigned to products using direct labor hours as the activity driver l. Purchasing cost assigned to products using number of orders as the activity driver m. Materials handling cost incurrence n. Materials handling cost assigned using the number of moves as the activity driver o. Materials handling cost assigned using direct labor hours as the activity driver p. Computer q. Costing out of products r. Decision to continue making a part rather than buying it s. Printer t. Customer service cost incurred u. Customer service cost assigned to products using number of complaints as the activity driver v. Report detailing individual product costs w. Commission cost x. Commission cost assigned to products using units sold as the activity driver y. Plant depreciation z. Plant depreciation assigned to products using direct labor hours Required: 1. For each cost system, classify the relevant items into one of the following categories: a. Interrelated parts b. Processes c. Objectives d. Inputs e. Outputs f. User actions 2. Explain the choices that differ between the two systems. Which system will provide the best support for the user actions? Explain. 3. Draw an operational model that illustrates each cost accounting systemwith the items that belong to the system used as examples for each component of the model. 4. Based on the operational models, comment on the relative costs and benefits of the two systems. Which system should be chosen?arrow_forward
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