Question 1

Which of the following is one of the four cost categories typically found on a cost of quality report?

Accepted Answer

A) Development costs 
B) Inventory failure costs 
C) Prevention costs 
D) Marketing costs 
A) Development costs 
B) Inventory failure costs 
C) Prevention costs 
D) Marketing costs

Question 2

Waste activities is another name for non-value-added activities.

Accepted Answer

A) True 
 B)False

Question 3

Managers who practice total quality management

Accepted Answer

A) invest more resources at the front end of the value chain in research and development and design to produce a superior product. 
B) invest more resources in inspecting and repairing products once they are produced. 
C) practice both A and B. 
D) practice neither A nor B. 
A) invest more resources at the front end of the value chain in research and development and design to produce a superior product. 
B) invest more resources in inspecting and repairing products once they are produced. 
C) practice both A and B. 
D) practice neither A nor B.

Question 4

All of the following describe an ABC system except

Accepted Answer

A) ABC systems may only be used by service companies. 
B) ABC systems can create more accurate product costs. 
C) ABC systems are more complex and costly than traditional costing systems. 
D) ABC systems are used in both manufacturing and nonmanufacturing companies. 
A) ABC systems may only be used by service companies. 
B) ABC systems can create more accurate product costs. 
C) ABC systems are more complex and costly than traditional costing systems. 
D) ABC systems are used in both manufacturing and nonmanufacturing companies.

Question 5

The cost to rework a defective product before it is shipped out from the factory would be classified as which cost of quality category?

Accepted Answer

A) Prevention costs 
B) Appraisal costs 
C) Internal failure costs 
D) External failure costs 
A) Prevention costs 
B) Appraisal costs 
C) Internal failure costs 
D) External failure costs

Question 6

Which of the following is not a factor in the success of a lean company?

Accepted Answer

A) Short production cycle times 
B) Continuous flow of production without interruptions 
C) Inflexible production operations 
D) The focus on quality 
A) Short production cycle times 
B) Continuous flow of production without interruptions 
C) Inflexible production operations 
D) The focus on quality

Question 7

Non-value-added activities can be described as activities for which the customer is willing to pay.

Accepted Answer

A) True 
 B)False

Question 8

The use of which of the following costing systems is most likely to reduce cost distortion to a minimum?

Accepted Answer

A) Plantwide overhead rate 
B) Departmental overhead allocation rates 
C) Traditional costing system 
D) Activity-based costing 
A) Plantwide overhead rate 
B) Departmental overhead allocation rates 
C) Traditional costing system 
D) Activity-based costing

Question 9

Lean thinking is a management philosophy that strives to create value by eliminating waste.

Accepted Answer

A) True 
 B)False

Question 10

Using traditional costing instead of ABC costing might lead to all of the following except

Accepted Answer

A) cutting back on high-volume products that appear unprofitable. 
B) expanding low-volume products that appear profitable. 
C) raising the selling price of low-volume products. 
D) raising the selling price of high-volume products. 
A) cutting back on high-volume products that appear unprofitable. 
B) expanding low-volume products that appear profitable. 
C) raising the selling price of low-volume products. 
D) raising the selling price of high-volume products.

Question 11

When calculating the total amount of manufacturing overhead to allocate to a particular job, the company would multiply each departmental overhead rate by ________ and then ________ together the allocated amounts from each department.

Accepted Answer

A) the actual amount of the departmental allocation based used by the job; multiply 
B) the actual amount of the plantwide allocation based used by the job; add 
C) the actual amount of the departmental allocation based used by the job; add 
D) the actual amount of the plantwide allocation based used by the job; multiply 
A) the actual amount of the departmental allocation based used by the job; multiply 
B) the actual amount of the plantwide allocation based used by the job; add 
C) the actual amount of the departmental allocation based used by the job; add 
D) the actual amount of the plantwide allocation based used by the job; multiply

Question 12

In using an ABC system, all of the following steps are performed before the company's year begins except

Accepted Answer

A) identify the primary activities and estimate a total cost pool for each. 
B) select an allocation base for each activity. 
C) allocate the costs to the cost object using the activity cost allocation rates. 
D) calculate an activity cost allocation rate for each activity. 
A) identify the primary activities and estimate a total cost pool for each. 
B) select an allocation base for each activity. 
C) allocate the costs to the cost object using the activity cost allocation rates. 
D) calculate an activity cost allocation rate for each activity.

Question 13

The cost of searching for a supplier of higher quality raw materials (than the current supplier)would be classified as which cost of quality category?

Accepted Answer

A) Prevention costs 
B) Appraisal costs 
C) Internal failure costs 
D) External failure costs 
A) Prevention costs 
B) Appraisal costs 
C) Internal failure costs 
D) External failure costs

Question 14

Benjamin Company manufactures a wide variety of products and uses an activity-based costing system. Data from its activity-based costing system for all products follows:   What is the engineering cost pool rate per engineering hour?

Accepted Answer

A) $12 
B) $28 
C) $47 
D) $83 
A) $12 
B) $28 
C) $47 
D) $83

Question 15

The goal of total quality management (TQM)is to provide customers with inferior products and services.

Accepted Answer

A) True 
 B)False

Question 16

Direct labor hours would be the most appropriate cost allocation base for a Machining Department that uses machine robotics extensively.

Accepted Answer

A) True 
 B)False

Question 17

Potter & Weasley Company had the following activities, estimated indirect activity costs, and allocation bases:   Potter & Weasley uses activity based costing.
The above activities are used by Departments P and Q as follows:
  How much of the account verification costs will be assigned to Department P?

Accepted Answer

A) $9,000 
B) $8,000 
C) $10,500 
D) $3,000 
A) $9,000 
B) $8,000 
C) $10,500 
D) $3,000

Question 18

Which of the following systems focuses on activities as the fundamental cost objects and uses the costs of those activities as building blocks for compiling the indirect costs of products and other cost objects?

Accepted Answer

A) Job costing 
B) Activity-based costing 
C) Process costing 
D) Product costing 
A) Job costing 
B) Activity-based costing 
C) Process costing 
D) Product costing

Question 19

Which of the following is true about lean thinking?

Accepted Answer

A) Customer orders drive the production process. 
B) Inventory levels are maintained at high levels. 
C) Raw materials are purchased in large quantities. 
D) Finished goods are produced ahead of customers' orders to protect against running out of finished goods inventory. 
A) Customer orders drive the production process. 
B) Inventory levels are maintained at high levels. 
C) Raw materials are purchased in large quantities. 
D) Finished goods are produced ahead of customers' orders to protect against running out of finished goods inventory.

Question 20

In ABC, how is the activity allocation rate computed?

Accepted Answer

A) The total estimated activity allocation base is divided by the total estimated activity cost pool. 
B) The total estimated activity cost pool is divided by the total estimated activity allocation base. 
C) The total estimated activity allocation base is multiplied by the total estimated activity cost pool. 
D) You take the total estimated activity allocation base and subtract the total estimated total activity cost pool. 
A) The total estimated activity allocation base is divided by the total estimated activity cost pool. 
B) The total estimated activity cost pool is divided by the total estimated activity allocation base. 
C) The total estimated activity allocation base is multiplied by the total estimated activity cost pool. 
D) You take the total estimated activity allocation base and subtract the total estimated total activity cost pool.

Which of the following is one of the four cost categories typically found on a cost of quality report?

Waste activities is another name for non-value-added activities.

Managers who practice total quality management

All of the following describe an ABC system except

The cost to rework a defective product before it is shipped out from the factory would be classified as which cost of quality category?

Which of the following is not a factor in the success of a lean company?

Non-value-added activities can be described as activities for which the customer is willing to pay.

The use of which of the following costing systems is most likely to reduce cost distortion to a minimum?

Lean thinking is a management philosophy that strives to create value by eliminating waste.

Using traditional costing instead of ABC costing might lead to all of the following except

When calculating the total amount of manufacturing overhead to allocate to a particular job, the company would multiply each departmental overhead rate by and then together the allocated amounts from each department.

In using an ABC system, all of the following steps are performed before the company's year begins except

The cost of searching for a supplier of higher quality raw materials (than the current supplier)would be classified as which cost of quality category?

Benjamin Company manufactures a wide variety of products and uses an activity-based costing system. Data from its activity-based costing system for all products follows: What is the engineering cost pool rate per engineering hour?

The goal of total quality management (TQM)is to provide customers with inferior products and services.

Direct labor hours would be the most appropriate cost allocation base for a Machining Department that uses machine robotics extensively.

Potter & Weasley Company had the following activities, estimated indirect activity costs, and allocation bases: Potter & Weasley uses activity based costing. The above activities are used by Departments P and Q as follows: How much of the account verification costs will be assigned to Department P?

Which of the following systems focuses on activities as the fundamental cost objects and uses the costs of those activities as building blocks for compiling the indirect costs of products and other cost objects?

Which of the following is true about lean thinking?

In ABC, how is the activity allocation rate computed?

Introduction to Managerial Accounting

Building Blocks of Managerial Accounting

Job Costing

Process Costing

Cost Behavior

Cost-Volume-Profit Analysis

Relevant Costs for Short-Term Decisions

The Master Budget

Performance Evaluation

Standard Costs and Variances

Capital Investment Decisions and the Time Value of Money

Statement of Cash Flows

Financial Statement Analysis

Sustainability

Filters

Exam 4: Activity-Based Costing, Lean Operations, and the Costs of Quality

Which of the following is one of the four cost categories typically found on a cost of quality report?

Waste activities is another name for non-value-added activities.

Managers who practice total quality management

All of the following describe an ABC system except

The cost to rework a defective product before it is shipped out from the factory would be classified as which cost of quality category?

Which of the following is not a factor in the success of a lean company?

Non-value-added activities can be described as activities for which the customer is willing to pay.

The use of which of the following costing systems is most likely to reduce cost distortion to a minimum?

Lean thinking is a management philosophy that strives to create value by eliminating waste.

Using traditional costing instead of ABC costing might lead to all of the following except

When calculating the total amount of manufacturing overhead to allocate to a particular job, the company would multiply each departmental overhead rate by ________ and then ________ together the allocated amounts from each department.

In using an ABC system, all of the following steps are performed before the company's year begins except

The cost of searching for a supplier of higher quality raw materials (than the current supplier)would be classified as which cost of quality category?

Benjamin Company manufactures a wide variety of products and uses an activity-based costing system. Data from its activity-based costing system for all products follows: What is the engineering cost pool rate per engineering hour?

The goal of total quality management (TQM)is to provide customers with inferior products and services.

Direct labor hours would be the most appropriate cost allocation base for a Machining Department that uses machine robotics extensively.

Potter & Weasley Company had the following activities, estimated indirect activity costs, and allocation bases: Potter & Weasley uses activity based costing. The above activities are used by Departments P and Q as follows: How much of the account verification costs will be assigned to Department P?

Which of the following systems focuses on activities as the fundamental cost objects and uses the costs of those activities as building blocks for compiling the indirect costs of products and other cost objects?

Which of the following is true about lean thinking?

In ABC, how is the activity allocation rate computed?

Introduction to Managerial Accounting

Building Blocks of Managerial Accounting

Job Costing

Process Costing

Cost Behavior

Cost-Volume-Profit Analysis

Relevant Costs for Short-Term Decisions

The Master Budget

Performance Evaluation

Standard Costs and Variances

Capital Investment Decisions and the Time Value of Money

Statement of Cash Flows

Financial Statement Analysis

Sustainability

Filters

When calculating the total amount of manufacturing overhead to allocate to a particular job, the company would multiply each departmental overhead rate by and then together the allocated amounts from each department.