Exam 8: Setting Process Expectations

Two workers, A and B, perform sequential tasks on a balanced line producing wooden bookcases. Worker B applies a spray coating of paint primer to shelves that Worker A has sanded. Worker A can only sand one shelf at a time while Worker B is able to apply the spray primer to four shelves simultaneously. In order to keep the line balanced:

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Question 1

Correct Answer:

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Everything U Need is the campus store at Upstate College. Due to the growing importance of used and rented textbooks, the business model for the store is under reevaluation. A part of this process has led to the application of activity-based management and budgeting principles. The store is preparing its activity-based budget for the upcoming July through September quarter, its busiest time of the year. The store classifies its product line into three categories: books and supplies; technology products; and clothing and personal items. The store has developed a listing of five activities that consume indirect resources. The table below lists the activities, their associated cost drivers, the cost driver rates, and the budgeted driver consumption by each activity for each product class in the July through September quarter. Required: a. Compute the total budgeted indirect cost for Everything U Need for the July through September quarter. b. Compute the budgeted indirect cost for each product category for the July through September quarter.

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Question 2

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Everything U Need is the campus store at Upstate College. Due to the growing importance of used and rented textbooks, the business model for the store is under reevaluation. A part of this process has led to the application of activity-based management and budgeting principles. The store is preparing its activity-based budget for the upcoming July through September quarter, its busiest time of the year. The store classifies its product line onto three categories: books and supplies; technology products; and clothing and personal items. The store has developed a listing of five activities that consume indirect resources. The table below lists the activities, their associated cost drivers, the cost driver rates, and the budgeted driver consumption by each activity for each product class in the July through September quarter:
Required
a) Compute the total budgeted indirect cost for Everything U Need for the July through September quarter.
By applying the driver rates to the activity levels consumed by each product class and summing we obtain total indirect cost of $28,855
b) Compute the budgeted indirect cost for each product category for the July through September quarter.

Both functional organizations and process-oriented organizations focus their businesses on the customer.

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Question 3

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Consider the following manufacturing-related activities. I. Conducting the final assembly of wooden furniture. II. Moving completed production to the finished goods warehouse. III. Painting newly manufactured automobiles. IV. Setting up a machine related to a new production run. V. Reworking defective goods to bring them up to quality standards. The activities that would be classified as value-added activities are:

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Question 4

Just-in-time management systems often employ what is called "backflush costing." Under this accounting approach, work-in-process inventories are valued at:

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Question 5

Income statements produced using a lean accounting approach conform to generally accepted accounting principles (GAAP).

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Question 6

Which of the following is a key characteristic of a process-oriented organization?

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Question 7

A lean accounting approach organizes cost information by:

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Question 8

Adirondack Designs, Inc., produces wooden furniture in a sequential process involving four departments: cutting, assembly, finishing, and packaging. Limited labor time available in the finishing department exerts a limiting constraint on the output of the company. According to the Theory of Constraints, optimal use of the time available in the finishing department requires:

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Question 9

Just-in-time management reduces total throughput time by:

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Question 10

Compared to activity-based costing, activity-based management places more emphasis on segregating value-added activities from non-value-added activities.

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Question 11

Of the following innovative approaches to the organization of work, which emphasizes the resources that define current limits on the rate of output of goods and/or services?

(Multiple Choice)

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Question 12

Under a lean accounting approach, costs that are not directly traceable to the activities and outcomes of a value stream are:

(Multiple Choice)

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Question 13

Process management focuses on how work is done, emphasizing the linkages between people from one individual to another.

(True/False)

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Question 14

Throughput time is most likely to be minimized in a production system organized:

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Question 15

True Vision Cable Systems, Inc., employs activity-based budgeting systems. A recent study was done to analyze the activities completed by the company's customer service manager, who is paid $45,000 per year. The table below lists the activities performed by the customer service manager and the percentage of time she reported spending on each activity. Required: Develop an activity-based budget for the customer service manager.

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Question 16

Producing under the Theory of Constraints is not always the least expensive way to operate because:

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Question 17

Activity-based management (ABM) relies on which of the following for its major source of data?

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Question 18

The practice called "backflush costing" only charges cost to a unit of product when:

(Multiple Choice)

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Question 19

Unlike traditional budgets that are focused on resources consumed by a company or cost center, activity-based budgeting (ABB) places emphasis on:

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Question 20

Showing 1 - 20 of 48

Both functional organizations and process-oriented organizations focus their businesses on the customer.

Just-in-time management systems often employ what is called "backflush costing." Under this accounting approach, work-in-process inventories are valued at:

Income statements produced using a lean accounting approach conform to generally accepted accounting principles (GAAP).

Which of the following is a key characteristic of a process-oriented organization?

A lean accounting approach organizes cost information by:

Just-in-time management reduces total throughput time by:

Compared to activity-based costing, activity-based management places more emphasis on segregating value-added activities from non-value-added activities.

Of the following innovative approaches to the organization of work, which emphasizes the resources that define current limits on the rate of output of goods and/or services?

Under a lean accounting approach, costs that are not directly traceable to the activities and outcomes of a value stream are:

Process management focuses on how work is done, emphasizing the linkages between people from one individual to another.

Throughput time is most likely to be minimized in a production system organized:

Producing under the Theory of Constraints is not always the least expensive way to operate because:

Activity-based management (ABM) relies on which of the following for its major source of data?

The practice called "backflush costing" only charges cost to a unit of product when:

Unlike traditional budgets that are focused on resources consumed by a company or cost center, activity-based budgeting (ABB) places emphasis on:

Business Planning and Analysis: An Integrative Framework for Management Accounting

Measuring and Evaluating Performance

Defining and Using Cost Estimates

Cost Pools, Capacity, and Activity- Based Costing

Understanding the Management Process

Planning in the Product Domain

Assessing and Improving Product Profitability

Evaluating and Improving Process Performance

Setting Performance Expectations at the Entity Level

Setting Performance Expectations in Large, Complex Organizations

Evaluating and Improving Entity Performance

Setting and Achieving Targets in the Customer Domain

Strategic Cost Management and the Value Chain Domain

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