Mangerial Accounting

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Eton University College of Business and Management MBA560 Managerial Accounting Final Exam |

Ayman Hamed Abdel Halim |

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Academic Year 2012\2013Spring Quarter |

Saturday 23\06\2012 |

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Section A

Answer Question No. 1, then attempt any other THREE questions.

1. Transaction drivers count how often an activity is performed.

Duration drivers represent the amount of time required to perform an activity.

Intensity drivers directly charge for the resources used each time an activity is performed.

Also, a weighted index approach might be used to simulate an intensity driver.

a. Give an example of each of the four types of drivers described above.

Answer:

1- Transaction driver’s count how often an activity is performed such as the number the number of setup, number of receipts, and number of products supported.

2- Duration Drivers: represent the amount of time required to perform an activity, such as the required setup hours, order processing hours, and inspection hours.

3- Intensity drivers: directly charge for the resources used each time an activity is performed such as special setup efforts that require an engineer and expensive equipment as well as quality specialists.

4- A weighted index approach uses measures such as relative complexity or difficulty of efforts for the various types of customers/ products

b. Explain when each of the four types of drivers should be used.

Answer:

1- Transaction drivers can be used when all objects make essentially the same demands on the activity and the times spent for each effort are similar in length.

For example:

Scheduling production runs or processing orders may take practically the same time and effort independent of which product is being scheduled or which part is being purchased.

2- Duration drivers should be used when significant variation exists in the amount of activity required for different outputs.

For Example:

Simple support...