Question 1

Just-in-time costing is also known as ________.

Accepted Answer

A) job costing 
B) batch costing 
C) backflush costing 
D) process costing 
A) job costing 
B) batch costing 
C) backflush costing 
D) process costing

Question 2

Which of the following is an example of internal failure costs?

Accepted Answer

A) costs incurred for the evaluation of the quality of suppliers' processes 
B) costs incurred in the inspection at various stages of production 
C) cost incurred for the reworking of substandard products 
D) cost incurred as warranty expenses 
A) costs incurred for the evaluation of the quality of suppliers' processes 
B) costs incurred in the inspection at various stages of production 
C) cost incurred for the reworking of substandard products 
D) cost incurred as warranty expenses

Question 3

A just-in-time costing system does not use the Finished Goods Inventory account; instead,it combines the Finished Goods Inventory account with the Work-in-Process Inventory account.

Accepted Answer

A) True 
 B)False

Question 4

The first step in developing an activity-based costing system is to identify the activities that will be used to allocate the manufacturing overhead costs.

Accepted Answer

A) True 
 B)False

Question 5

Mendburg,Inc.is a consulting firm that offers optimal legal solutions.It allocates indirect costs using a single predetermined overhead allocation rate with direct labor hours as the allocation base.The estimated indirect costs for this year amount to $100,000.The company is expected to work 5000 direct labor hours during the year.The direct labor rate is $250 per hour.Clients are billed at 130% of direct labor cost.Last month,Mendburg's consultants spent 175 hours on Curelli,Inc.Calculate the operating income from Curelli.

Accepted Answer

A) $43,945 
B) $43,750 
C) $113,750 
D) $9625 
A) $43,945 
B) $43,750 
C) $113,750 
D) $9625

Question 6

Just-in-time costing does not track the cost of products from Raw Materials Inventory to Work-in-Process Inventory to Finished Goods Inventory.

Accepted Answer

A) True 
 B)False

Question 7

Under the just-in-time management system,________.

Accepted Answer

A) a company's storage costs increase 
B) a company's inventory insurance costs increase 
C) the floor space available for production increases 
D) the risk of the inventory becoming obsolete increases 
A) a company's storage costs increase 
B) a company's inventory insurance costs increase 
C) the floor space available for production increases 
D) the risk of the inventory becoming obsolete increases

Question 8

Borsetta,Inc.manufactures two kinds of bags-totes and satchels.The company allocates manufacturing overhead using a single plantwide rate with direct labor cost as the allocation base.Estimated overhead costs for the year are $25,000.Additional estimated information is given below. $$\begin{array} { | l | r | r | } 
\hline & \text { Totes } & \text { Satchels } \
\hline \text { Direct materials cost per unit } & \$ 33 & \$ 44 \
\hline \text { Direct labor cost per unit } & \$ 54 & \$ 62 \
\hline \text { Number of units } & 540 & 370 \
\hline
\end{array}$$ Calculate the amount of overhead to be allocated to Satchels,if the actual units produced and direct labor costs equal the estimated amounts.(Round any percentages to two decimal places and your final answer to the nearest dollar.)

Accepted Answer

A) $463 
B) $13,991 
C) $11,007 
D) $22,940 
A) $463 
B) $13,991 
C) $11,007 
D) $22,940

Question 9

When a manufacturer changes from using a single plantwide predetermined overhead rate to multiple predetermined overhead allocation rates,the product unit cost may be more accurate.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is the correct formula to calculate the target cost?

Accepted Answer

A) Target Cost = Target Sales Price + Desired Net Profit 
B) Target Cost = Target Sales Price - Desired Net Profit 
C) Target Cost = Target Sales Price 
D) Target Cost = Desired Net Profit + Research and Development Expenses 
A) Target Cost = Target Sales Price + Desired Net Profit 
B) Target Cost = Target Sales Price - Desired Net Profit 
C) Target Cost = Target Sales Price 
D) Target Cost = Desired Net Profit + Research and Development Expenses

Question 11

Provide answers to the following just-in-time costing questions.
 $$\begin{array} { | l | l | } 
\hline  { \text { Just-in-Time Costing Question } } & \text { Just-in-Time Costing Answer } \
\hline \text { When are the costs of products recorded? } & \
\hline \text { Which inventory accounts are used? } & \
\hline \text { Which accounts are used to record } & \
\text { manufacturing costs? } & \
\hline
\end{array}$$

Accepted Answer

\[\begin{array} { | l | l | } 
\hline  {

Question 12

Management compares the costs of undertaking a quality improvement program to the costs of continuing without the quality improvement program.

Accepted Answer

A) True 
 B)False

Question 13

Since quality improvement programs are always needed,there is no reason to compare the costs of undertaking a quality improvement program to the costs of continuing without the quality improvement program.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following statements is true of target pricing?

Accepted Answer

A) It starts with the price that customers are willing to pay. 
B) The full product cost is added to the desired net profit to arrive at a sales price. 
C) It does not consider the nonmanufacturing costs when calculating the target cost. 
D) It is the same as cost-based pricing. 
A) It starts with the price that customers are willing to pay. 
B) The full product cost is added to the desired net profit to arrive at a sales price. 
C) It does not consider the nonmanufacturing costs when calculating the target cost. 
D) It is the same as cost-based pricing.

Question 15

Creative Chronometer,Inc.is planning to launch a new brand of watches for kids.Similar watches are available in the market for $56.In order to penetrate the market,the company plans to use target pricing and desires a 28% net profit markup on total cost.Calculate the target cost.(Round your answer to the nearest cent.)

Accepted Answer

A) $71.68 
B) $15.68 
C) $43.75 
D) $40.32 
A) $71.68 
B) $15.68 
C) $43.75 
D) $40.32

Question 16

When preparing the report to analyze a proposed quality improvement program,which of the following costs are included in the total costs of not undertaking the quality improvement program?

Accepted Answer

A) preventive maintenance 
B) sales returns 
C) inspection of finished goods 
D) total appraisal costs 
A) preventive maintenance 
B) sales returns 
C) inspection of finished goods 
D) total appraisal costs

Question 17

Activity-based management (ABM)can be used to make pricing and product mix decisions.

Accepted Answer

A) True 
 B)False

Question 18

Why is using multiple predetermined overhead allocation rates more accurate than using a single plantwide allocation rate?

Accepted Answer

The allocation process is the same,excep

Question 19

The just-in-time costing system waits until the units are completed to record the cost of production.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following accounts would NOT be used with just-in-time costing?

Accepted Answer

A) Finished Goods Inventory 
B) Raw Materials Inventory 
C) Conversion Costs 
D) Cost of Goods Sold 
A) Finished Goods Inventory 
B) Raw Materials Inventory 
C) Conversion Costs 
D) Cost of Goods Sold

Just-in-time costing is also known as ________.

Which of the following is an example of internal failure costs?

A just-in-time costing system does not use the Finished Goods Inventory account; instead,it combines the Finished Goods Inventory account with the Work-in-Process Inventory account.

The first step in developing an activity-based costing system is to identify the activities that will be used to allocate the manufacturing overhead costs.

Just-in-time costing does not track the cost of products from Raw Materials Inventory to Work-in-Process Inventory to Finished Goods Inventory.

Under the just-in-time management system,________.

When a manufacturer changes from using a single plantwide predetermined overhead rate to multiple predetermined overhead allocation rates,the product unit cost may be more accurate.

Which of the following is the correct formula to calculate the target cost?

Provide answers to the following just-in-time costing questions. Just-in-Time Costing Question Just-in-Time Costing Answer When are the costs of products recorded? Which inventory accounts are used? Which accounts are used to record manufacturing costs?

Management compares the costs of undertaking a quality improvement program to the costs of continuing without the quality improvement program.

Since quality improvement programs are always needed,there is no reason to compare the costs of undertaking a quality improvement program to the costs of continuing without the quality improvement program.

Which of the following statements is true of target pricing?

When preparing the report to analyze a proposed quality improvement program,which of the following costs are included in the total costs of not undertaking the quality improvement program?

Activity-based management (ABM)can be used to make pricing and product mix decisions.

Why is using multiple predetermined overhead allocation rates more accurate than using a single plantwide allocation rate?

The just-in-time costing system waits until the units are completed to record the cost of production.

Which of the following accounts would NOT be used with just-in-time costing?

Accounting Information Systems

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Variable Costing

Master Budgets

Flexible Budgets and Standard Cost Systems

Responsibility Accounting and Performance Evaluation

Short-Term Business Decisions

Capital Investment Decisions

Filters

Exam 19: Cost Management Systems: Activity-Based, just-In-Time, and Quality Management Systems

Just-in-time costing is also known as ________.

Which of the following is an example of internal failure costs?

A just-in-time costing system does not use the Finished Goods Inventory account; instead,it combines the Finished Goods Inventory account with the Work-in-Process Inventory account.

The first step in developing an activity-based costing system is to identify the activities that will be used to allocate the manufacturing overhead costs.

Just-in-time costing does not track the cost of products from Raw Materials Inventory to Work-in-Process Inventory to Finished Goods Inventory.

Under the just-in-time management system,________.

When a manufacturer changes from using a single plantwide predetermined overhead rate to multiple predetermined overhead allocation rates,the product unit cost may be more accurate.

Which of the following is the correct formula to calculate the target cost?

Provide answers to the following just-in-time costing questions. Just-in-Time Costing Question Just-in-Time Costing Answer When are the costs of products recorded? Which inventory accounts are used? Which accounts are used to record manufacturing costs?

Management compares the costs of undertaking a quality improvement program to the costs of continuing without the quality improvement program.

Since quality improvement programs are always needed,there is no reason to compare the costs of undertaking a quality improvement program to the costs of continuing without the quality improvement program.

Which of the following statements is true of target pricing?

When preparing the report to analyze a proposed quality improvement program,which of the following costs are included in the total costs of not undertaking the quality improvement program?

Activity-based management (ABM)can be used to make pricing and product mix decisions.

Why is using multiple predetermined overhead allocation rates more accurate than using a single plantwide allocation rate?

The just-in-time costing system waits until the units are completed to record the cost of production.

Which of the following accounts would NOT be used with just-in-time costing?

Accounting Information Systems

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Variable Costing

Master Budgets

Flexible Budgets and Standard Cost Systems

Responsibility Accounting and Performance Evaluation

Short-Term Business Decisions

Capital Investment Decisions

Filters