Question 1

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 2

Research and development would most likely be classified as a ________ cost.

Accepted Answer

A) unit-level 
B) batch-level 
C) facility-level 
D) product-level 
A) unit-level 
B) batch-level 
C) facility-level 
D) product-level

Question 3

Activity-based management refers to using activity-based cost information to make decisions that may increase profits while satisfying customers' needs.

Accepted Answer

A) True 
 B)False

Question 4

Back Porch Company manufactures lawn chairs using an activity-based costing system to allocate all manufacturing conversion costs. The following information is provided for the month of June:   Each lawn chair consists of 6 parts; the total direct materials cost per lawn chair is $15.
What is the total manufacturing cost per lawn chair?

Accepted Answer

A) $73.67 
B) $50.00 
C) $58.67 
D) $65.00 
A) $73.67 
B) $50.00 
C) $58.67 
D) $65.00

Question 5

Refined costing systems can be used to allocate any indirect costs to any cost objects.

Accepted Answer

A) True 
 B)False

Question 6

OP Technologies Manufacturing manufactures small parts and uses an activity-based costing system.   The following parts were produced in October with the following information:
  Total unit costs for Part A is closest to (round to two decimal points)

Accepted Answer

A) $7.05 
B) $20.64 
C) $8.66 
D) $12.40 
A) $7.05 
B) $20.64 
C) $8.66 
D) $12.40

Question 7

The cost of fixing defective units found during the quality inspections would be classified as what type of cost?

Accepted Answer

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

Question 8

Costs incurred to avoid providing poor quality services would be considered to be

Accepted Answer

A) appraisal costs. 
B) activity-based costing. 
C) prevention costs. 
D) value engineering. 
A) appraisal costs. 
B) activity-based costing. 
C) prevention costs. 
D) value engineering.

Question 9

Howard, Fine, & Howard is an advertising agency. The firm uses an activity-based costing system to allocate overhead costs to its services. Information about the firm's activity cost pool rates follows:   Stooge Company was a client of Howard, Fine, & Howard. Recently, 9 administrative assistant hours, 3 new ad campaigns, and 10 meeting hours were incurred for the Stooge Company account.
Using the activity-based costing system, how much overhead cost would be allocated to the Stooge Company account?

Accepted Answer

A) $939 
B) $459 
C) $169 
D) $3718 
A) $939 
B) $459 
C) $169 
D) $3718

Question 10

A lean company typically strives to lengthen the manufacturing cycle time.

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

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

Question 12

As compared to traditional volume-based costing using a single plantwide overhead rate, activity-based costing (ABC)is a more refined costing system that reduces cost distortion.

Accepted Answer

A) True 
 B)False

Question 13

The cost of inspection at various stages of production is an example of a(n)

Accepted Answer

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

Question 14

Beartowne Enterprises uses an activity-based costing system to assign costs in its auto-parts division.   The following units were produced in December with the following information:
  Total unit costs for Part 001 is closest to (round to two decimal points)

Accepted Answer

A) $6.26 
B) $19.07 
C) $8.24 
D) $3.21 
A) $6.26 
B) $19.07 
C) $8.24 
D) $3.21

Question 15

Trailers R Us Company, which uses an activity-based costing system, produces travel trailers and boat trailers. The company allocates batch setup costs to the two products using the following basic data:   Total budgeted setup costs for the year are $161,400.
If the setup costs are allocated using direct labor hours, how much of the total setup costs would be allocated to boat trailers?

Accepted Answer

A) $161,400 
B) $114,861 
C) $226,795 
D) $398,349 
A) $161,400 
B) $114,861 
C) $226,795 
D) $398,349

Question 16

Customer response time is the time that lapses between the receipt of a customer order and delivery of the product or service.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is not an activity in an ABC system that determines the cost of a manufactured product?

Accepted Answer

A) Machining 
B) Inspecting 
C) Accounting 
D) Materials handling 
A) Machining 
B) Inspecting 
C) Accounting 
D) Materials handling

Question 18

External failure costs occur when the company detects and corrects poor-quality goods or services before delivery to customers.

Accepted Answer

A) True 
 B)False

Question 19

Waste can be reduced by implementing shorter setup times.

Accepted Answer

A) True 
 B)False

Question 20

ABC can be used in routine planning and control decisions as well as pricing, product mix and cost cutting decisions.

Accepted Answer

A) True 
 B)False

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

Research and development would most likely be classified as a ________ cost.

Activity-based management refers to using activity-based cost information to make decisions that may increase profits while satisfying customers' needs.

Refined costing systems can be used to allocate any indirect costs to any cost objects.

OP Technologies Manufacturing manufactures small parts and uses an activity-based costing system. The following parts were produced in October with the following information: Total unit costs for Part A is closest to (round to two decimal points)

The cost of fixing defective units found during the quality inspections would be classified as what type of cost?

Costs incurred to avoid providing poor quality services would be considered to be

A lean company typically strives to lengthen the manufacturing cycle time.

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

As compared to traditional volume-based costing using a single plantwide overhead rate, activity-based costing (ABC)is a more refined costing system that reduces cost distortion.

The cost of inspection at various stages of production is an example of a(n)

Beartowne Enterprises uses an activity-based costing system to assign costs in its auto-parts division. The following units were produced in December with the following information: Total unit costs for Part 001 is closest to (round to two decimal points)

Customer response time is the time that lapses between the receipt of a customer order and delivery of the product or service.

Which of the following is not an activity in an ABC system that determines the cost of a manufactured product?

External failure costs occur when the company detects and corrects poor-quality goods or services before delivery to customers.

Waste can be reduced by implementing shorter setup times.

ABC can be used in routine planning and control decisions as well as pricing, product mix and cost cutting decisions.

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 Evalulation

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 not a factor in the success of a lean company?

Research and development would most likely be classified as a ________ cost.

Activity-based management refers to using activity-based cost information to make decisions that may increase profits while satisfying customers' needs.

Refined costing systems can be used to allocate any indirect costs to any cost objects.

OP Technologies Manufacturing manufactures small parts and uses an activity-based costing system. The following parts were produced in October with the following information: Total unit costs for Part A is closest to (round to two decimal points)

The cost of fixing defective units found during the quality inspections would be classified as what type of cost?

Costs incurred to avoid providing poor quality services would be considered to be

A lean company typically strives to lengthen the manufacturing cycle time.

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

As compared to traditional volume-based costing using a single plantwide overhead rate, activity-based costing (ABC)is a more refined costing system that reduces cost distortion.

The cost of inspection at various stages of production is an example of a(n)

Beartowne Enterprises uses an activity-based costing system to assign costs in its auto-parts division. The following units were produced in December with the following information: Total unit costs for Part 001 is closest to (round to two decimal points)

Customer response time is the time that lapses between the receipt of a customer order and delivery of the product or service.

Which of the following is not an activity in an ABC system that determines the cost of a manufactured product?

External failure costs occur when the company detects and corrects poor-quality goods or services before delivery to customers.

Waste can be reduced by implementing shorter setup times.

ABC can be used in routine planning and control decisions as well as pricing, product mix and cost cutting decisions.

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 Evalulation

Standard Costs and Variances

Capital Investment Decisions and the Time Value of Money

Statement of Cash Flows

Financial Statement Analysis

Sustainability

Filters