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

A plantwide overhead rate is calculated by dividing the estimated total manufacturing overhead costs for the year by estimated total amount of the allocation base for the year.

Lean companies typically emphasize quality.

Kepple Manufacturing currently uses a traditional costing system.The company allocates overhead to its two products,Zips and Dees,using a predetermined manufacturing overhead rate based on direct labor hours.Here is data related to the company's two products: The amount of manufacturing overhead that would be allocated to one unit of Zips using the traditional costing system would be closest to

The manager at Cyber Merchandising provided the following Cost of Quality Report to the managers at the quarterly meeting. The manager at Cyber Merchandising reported that the percentage of total costs to quality incurred in each cost category.Which cost of quality in the Costs of Quality Report are the highest expenditures at the firm? Rank the cost of quality in order from the lowest percentage cost of quality to the highest percentage cost of quality category.What can the manager at Cyber Manufacturing do to reduce the costs spent on the total internal failure costs?

Using factory utilities would most likely be classified as a ________ cost.

If a company were to increase its appraisal costs by inspecting more units as the units are completed,the company's external failure costs would most likely

Appraisal costs are incurred to detect poor-quality goods or services.

Machine set-up would be considered a batch-level cost.

Value-engineering is accomplished by eliminating,reducing,or simplifying all non-value added activities,and examining whether value-added activities could be improved.

Which of the following does activity-based costing consider to be the fundamental cost object?

Molding and sanding each unit of product would most likely be classified as a ________ cost.

Machine set-up would most likely be classified as a ________ cost.

What will the use of departmental overhead rates generally result in?

Which of the following can be used in conjunction with activity-based costing?

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

The goal of value-engineering is to eliminate all waste in the system by making the company's processes as effective and efficient as possible.

Which of the following cost of quality categories represent the cost incurred to provide "warranty repair on a juicer?"

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 correspondence cost will be assigned to Department P?

Cooper's Bags Company manufactures cloth grocery bags to be sold to grocery stores and other retailers.Cooper's Bags Company sells the bags in cases of 1,000 bags.The bags come in three sizes: Large,Medium,and Small.Currently,Cooper's Bags Company uses a single plant-wide overhead rate to allocate its $8,088,000 of annual manufacturing overhead.Of this amount,$2,210,000 is associated with the Large Bag line,$3,418,800 is associated with the Medium Bag line,and $2,459,200 is associated with the Small Bag line.Cooper's Bags Company is currently running a total of 40,000 machine hours: 13,000 in the Large Bag line,15,400 in the Medium Bag line,and 11,600 in the Small Bag line.Cooper's Bags Company uses machine hours as the cost driver for manufacturing overhead costs. The plant-wide manufacturing overhead rate would be closest to

Non-value added activities are activities that neither enhance the customer's image of the product or service nor provide a competitive advantage.