Question 1

What role does the AIS play in the production cycle?

Accepted Answer

A company's AIS plays a vital role in the production cycle.Accurate and timely cost accounting information is essential input to decisions about the following: Product mix (what to produce),Product pricing,Resource allocation and planning (e.g.,whether to make or buy a product,relative profitability of different products),Cost management (planning and controlling manufacturing costs,evaluating performance).These decisions require much more detailed information about costs than the data needed to prepare financial statements in accordance with generally accepted accounting principles (GAAP).Thus,the design of a company's production cycle AIS must go beyond merely meeting external financial reporting requirements.

Question 2

What types of data are accumulated by cost accounting? What is the accountant's role in cost accounting?

Accepted Answer

There are four types of cost data accumulated in a cost accounting system: raw materials; direct labor; machinery and equipment; and,manufacturing overhead.The role of the accountant is to control costs by assessing how product mix changes affect total manufacturing overhead and by identifying factors that drive changes in costs.

Question 3

"Push manufacturing" is also known as

Accepted Answer

A) manufacturing resource planning (MRP). 
B) just-in-time manufacturing system (JIT). 
C) the economic order quantity (EOQ)system. 
D) ahead-of-time production implementation (ATPI). 
A) manufacturing resource planning (MRP). 
B) just-in-time manufacturing system (JIT). 
C) the economic order quantity (EOQ)system. 
D) ahead-of-time production implementation (ATPI). A

Question 4

The cost of a product liability claim can be classified as a(n)

Accepted Answer

A) prevention cost. 
B) inspection cost. 
C) internal failure cost. 
D) external failure cost. 
A) prevention cost. 
B) inspection cost. 
C) internal failure cost. 
D) external failure cost.

Question 5

What are the two major types of cost accounting systems and what are the differences between the two?

Accepted Answer

Most companies will use either job-order

Question 6

Why might an organization find it most beneficial to involve accountants in product design?

Accepted Answer

A) because generally at least 65% of product costs are determined in the design stage and accountants can help minimize product costs 
B) because accountants are generally able to improve the quality of new products 
C) because involving accountants in product design boosts firm morale 
D) because accountants are generally able to identify what consumers want in a new product 
A) because generally at least 65% of product costs are determined in the design stage and accountants can help minimize product costs 
B) because accountants are generally able to improve the quality of new products 
C) because involving accountants in product design boosts firm morale 
D) because accountants are generally able to identify what consumers want in a new product

Question 7

In addition to identifying and dealing with defective products before they reach customers,quality management is concerned with initiating process changes that will reduce the number of defective units produced.All other things held constant,a decrease in the number of defective units will increase throughput by

Accepted Answer

A) increasing productive capacity. 
B) increasing productive processing time. 
C) increasing yield. 
D) increasing all components of throughput. 
A) increasing productive capacity. 
B) increasing productive processing time. 
C) increasing yield. 
D) increasing all components of throughput.

Question 8

In activity-based costing,expenses associated with the purchase of health care insurance for employees are ________ overhead.

Accepted Answer

A) batch-related 
B) product-related 
C) company wide 
D) expenditure-based 
A) batch-related 
B) product-related 
C) company wide 
D) expenditure-based

Question 9

"Pull manufacturing" is also known as

Accepted Answer

A) manufacturing resource planning (MRP). 
B) just-in-time manufacturing system (JIT). 
C) the economic order quantity (EOQ)system. 
D) ahead-of-time production implementation (ATPI). 
A) manufacturing resource planning (MRP). 
B) just-in-time manufacturing system (JIT). 
C) the economic order quantity (EOQ)system. 
D) ahead-of-time production implementation (ATPI).

Question 10

How does an MRP inventory system reduces inventory levels?

Accepted Answer

A) by reducing the uncertainty regarding when materials are needed 
B) by receiving materials exactly when needed and in exact quantities 
C) by computing the exact costs of purchasing and carrying inventory 
D) none of the above 
A) by reducing the uncertainty regarding when materials are needed 
B) by receiving materials exactly when needed and in exact quantities 
C) by computing the exact costs of purchasing and carrying inventory 
D) none of the above

Question 11

In an Activity-Based Costing (ABC)system,a cause-and-effect relationship is known as a

Accepted Answer

A) cost stimulator. 
B) overhead stimulator. 
C) cost driver. 
D) cost catalyst. 
A) cost stimulator. 
B) overhead stimulator. 
C) cost driver. 
D) cost catalyst.

Question 12

Which process or activity relates to overproduction?

Accepted Answer

A) product design 
B) planning and scheduling 
C) production operations 
D) cost accounting 
A) product design 
B) planning and scheduling 
C) production operations 
D) cost accounting

Question 13

What issue did Airbus encounter when using CAD software to help design the A380 Superjumbo airliner?

Accepted Answer

A) The actual A380 was heavier than the CAD model. 
B) The actual A380 was not able to carry as much weight as the CAD model. 
C) Design teams used different versions of the same CAD software,resulting in key information loss. 
D) The CAD software was not advanced enough to help design the A380. 
A) The actual A380 was heavier than the CAD model. 
B) The actual A380 was not able to carry as much weight as the CAD model. 
C) Design teams used different versions of the same CAD software,resulting in key information loss. 
D) The CAD software was not advanced enough to help design the A380.

Question 14

For replacement of inventories and assets destroyed by fire or other disasters,an organization needs

Accepted Answer

A) stand-by facilities. 
B) adequate insurance coverage. 
C) source data automation. 
D) All of the above are correct. 
A) stand-by facilities. 
B) adequate insurance coverage. 
C) source data automation. 
D) All of the above are correct.

Question 15

What does the first term in the throughput formula,productive capacity,represent?

Accepted Answer

A) the maximum number of units that can be produced given current technology 
B) the percentage of total production time used to manufacture a product 
C) the percentage of "good" units produced given current technology 
D) the percentage of "bad" units produced given current technology 
A) the maximum number of units that can be produced given current technology 
B) the percentage of total production time used to manufacture a product 
C) the percentage of "good" units produced given current technology 
D) the percentage of "bad" units produced given current technology

Question 16

Describe five threats in the production cycle and the applicable control procedures used to mitigate each threat.

Accepted Answer

Threat 1: Unauthorized transactions - Co

Question 17

________ is an efficient way to track and process information about raw materials used in production.

Accepted Answer

A) A just-in-time inventory system 
B) Identifying materials with bar codes or RFID tags 
C) A materials resources planning inventory system 
D) Job-order costing 
A) A just-in-time inventory system 
B) Identifying materials with bar codes or RFID tags 
C) A materials resources planning inventory system 
D) Job-order costing

Question 18

Direct labor must be tracked and accounted for as part of the production process.Traditionally,direct labor was tracked using ________ but an AIS enhancement is to use ________ to record and track direct labor costs.

Accepted Answer

A) job-time tickets; coded identification cards 
B) move tickets; coded identification cards 
C) employee earnings records; job-time tickets 
D) time cards; electronic time entry terminals 
A) job-time tickets; coded identification cards 
B) move tickets; coded identification cards 
C) employee earnings records; job-time tickets 
D) time cards; electronic time entry terminals

Question 19

What is the primary drawback to using a volume-driven base,such as direct labor or machine hours,to apply overhead to products in a traditional cost accounting system?

Accepted Answer

A) The cost accountant may not fully understand how to track direct labor or machine hours. 
B) It is difficult for an AIS to incorporate such a measurement into its system. 
C) It is difficult for an ERP to incorporate such a measurement into its integrated system. 
D) Many overhead costs are incorrectly allocated to products since they do not vary with production volume. 
A) The cost accountant may not fully understand how to track direct labor or machine hours. 
B) It is difficult for an AIS to incorporate such a measurement into its system. 
C) It is difficult for an ERP to incorporate such a measurement into its integrated system. 
D) Many overhead costs are incorrectly allocated to products since they do not vary with production volume.

Question 20

A master production schedule is used to develop detailed

Accepted Answer

A) timetables of daily production and determine raw material needs. 
B) reports on daily production and material usage. 
C) daily reports on direct labor needs. 
D) inventory charts. 
A) timetables of daily production and determine raw material needs. 
B) reports on daily production and material usage. 
C) daily reports on direct labor needs. 
D) inventory charts.

Exam 14: The Production Cycle

What role does the AIS play in the production cycle?

What types of data are accumulated by cost accounting? What is the accountant's role in cost accounting?

"Push manufacturing" is also known as

The cost of a product liability claim can be classified as a(n)

What are the two major types of cost accounting systems and what are the differences between the two?

Why might an organization find it most beneficial to involve accountants in product design?

In activity-based costing,expenses associated with the purchase of health care insurance for employees are ________ overhead.

"Pull manufacturing" is also known as

How does an MRP inventory system reduces inventory levels?

In an Activity-Based Costing (ABC)system,a cause-and-effect relationship is known as a

Which process or activity relates to overproduction?

What issue did Airbus encounter when using CAD software to help design the A380 Superjumbo airliner?

For replacement of inventories and assets destroyed by fire or other disasters,an organization needs

What does the first term in the throughput formula,productive capacity,represent?

Describe five threats in the production cycle and the applicable control procedures used to mitigate each threat.

________ is an efficient way to track and process information about raw materials used in production.

Direct labor must be tracked and accounted for as part of the production process.Traditionally,direct labor was tracked using ________ but an AIS enhancement is to use ________ to record and track direct labor costs.

What is the primary drawback to using a volume-driven base,such as direct labor or machine hours,to apply overhead to products in a traditional cost accounting system?

A master production schedule is used to develop detailed

Accounting Information Systems: an Overview

Overview of Transaction Processing and Enterprise Resource Planning Systems

Systems Documentation Techniques

Relational Databases

Computer Fraud

Computer Fraud and Abuse Techniques

Control and Accounting Information Systems

Controls for Information Security

Confidentiality and Privacy Controls

Processing Integrity and Availability Controls

Auditing Computer-Based Information Systems

The Revenue Cycle: Sales to Cash Collections

The Expenditure Cycle: Purchasing to Cash Disbursements

The Human Resources Management and Payroll Cycle

General Ledger and Reporting System

Database Design Using the Rea Data Model

Implementing an Rea Model in a Relational Database

Special Topics in Rea Modeling

Introduction to Systems Development and Systems Analysis

Ais Development Strategies

Systems Design,implementation,and Operation

Filters

Direct labor must be tracked and accounted for as part of the production process.Traditionally,direct labor was tracked using but an AIS enhancement is to use to record and track direct labor costs.