Question 1

The just-in-time management system results in an increase in the inventory carrying costs of a company.

Accepted Answer

A) True 
 B)False

Question 2

Musings Inc.completed the production of 500 units with standard costs of $520 for direct materials and $75 for conversion costs.During the current year,it incurred $260,000 for direct materials and $44,000 for conversion costs.Record the adjusting entry for the amount of underallocated or overallocated overhead.

Accepted Answer

The answer of Musings Inc.completed the production of 500 units...

Question 3

Modiste 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 $24,250.Additional information is given below.   
-Calculate the predetermined overhead allocation rate.

Accepted Answer

A) 45% 
B) 50% 
C) 60% 
D) 30% 
A) 45% 
B) 50% 
C) 60% 
D) 30%

Question 4

Indirect costs allocated to products using activity-based costing are more accurate than traditional allocation systems.

Accepted Answer

A) True 
 B)False

Question 5

________ is a costing system that starts with output that has been completed and then assigns manufacturing costs to units sold and to inventories.

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 6

________ is the maximum cost to develop,produce,and deliver a product or service and earn the desired profit.

Accepted Answer

A) Marginal cost 
B) Target cost 
C) Variable cost 
D) Sunk cost 
A) Marginal cost 
B) Target cost 
C) Variable cost 
D) Sunk cost

Question 7

A furniture corporation manufactures two models of furniture-Standard and Deluxe.The total manufacturing overhead is $64,350.   The company uses direct labor costs as the base to allocate manufacturing overhead.Calculate the predetermined overhead rate.

Accepted Answer

A) 28% 
B) 35% 
C) 63% 
D) 60% 
A) 28% 
B) 35% 
C) 63% 
D) 60%

Question 8

Activity-based management uses activity-based costs to make decisions that increase profits while meeting customer needs.

Accepted Answer

A) True 
 B)False

Question 9

Traditional costing systems employ multiple allocation rates,but an activity-based costing system uses only one rate for allocating manufacturing overhead.

Accepted Answer

A) True 
 B)False

Question 10

Distinguish the following costs as prevention,appraisal,internal failure,or external failure:
a)Rework labor and overhead
b)Technical support provided to suppliers
c)Warranty repairs and replacements
d)Depreciation of test equipment
e)Liability arising from defective products
f)Field testing and appraisal at customer site
g)Disposal of defective products

Accepted Answer

The answer of Distinguish the following costs as prevention,appraisal,internal failure,or...

Question 11

Activity-based costing focuses on a single predetermined overhead rate for cost analysis.

Accepted Answer

A) True 
 B)False

Question 12

Archid Inc.,a manufacturer of spare parts,has two production departments-Assembling and Packaging.The Assembling department is mechanized,while the Packaging department is labor-oriented.Estimated manufacturing overheads for the year 2015 were $15,000,000 for Assembling and $10,000,000 for Packaging.Calculate the department-wide allocation rates if the total estimated machine hours were 30,000 and labor hours were 20,000 for the year.

Accepted Answer

A) $250,$300 
B) $500,$500 
C) $300,$300 
D) $450,$540 
A) $250,$300 
B) $500,$500 
C) $300,$300 
D) $450,$540

Question 13

Companies with diverse products can obtain better costing information by using a single plantwide rate.

Accepted Answer

A) True 
 B)False

Question 14

Brannon Company manufactures ceiling fans and uses an activity-based costing system.Each ceiling fan consists of twenty separate parts.The direct material cost is $95 and each ceiling fan requires 2.5 hours of machine time to manufacture.There is no direct labor cost.Additional information is as follows:   What is the total manufacturing cost per ceiling fan?

Accepted Answer

A) $125.75 
B) $121.13 
C) $115.32 
D) $124.30 
A) $125.75 
B) $121.13 
C) $115.32 
D) $124.30

Question 15

Which of the following statements is true of the just-in-time costing system?

Accepted Answer

A) It increases the need for suppliers to deliver raw materials on time. 
B) It records summary journal entries before the units are purchased. 
C) It results in increased inventory storage costs. 
D) It increases the risk of the inventory becoming obsolete or unsalable. 
A) It increases the need for suppliers to deliver raw materials on time. 
B) It records summary journal entries before the units are purchased. 
C) It results in increased inventory storage costs. 
D) It increases the risk of the inventory becoming obsolete or unsalable.

Question 16

Ferrero Corp.manufactures gourmet dips along with potato chips flavored with Cajun spices.The market price for similar chips is $7.The management of the company desires a 30% net profit margin.
The current costing data relating to this product are as follows.
   Determine if Ferrero's current full-product costs meet its target cost.

Accepted Answer

@#IMG-DLM& @#IMG-DLM& The target cost is $4.90 and

Question 17

Traditional costing provides more detailed information on costs of activities and the drivers of these costs than activity-based costing.

Accepted Answer

A) True 
 B)False

Question 18

Value engineering means reevaluating activities to reduce costs while still meeting customer needs.

Accepted Answer

A) True 
 B)False

Question 19

________ in just-in-time management systems is completed in self-contained work cells.

Accepted Answer

A) Selling 
B) Production 
C) Administration 
D) Purchasing 
A) Selling 
B) Production 
C) Administration 
D) Purchasing

Question 20

While using an activity-based costing in service companies,the allocation of indirect costs to the cost object is the last step of the process.

Accepted Answer

A) True 
 B)False

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

The just-in-time management system results in an increase in the inventory carrying costs of a company.

Indirect costs allocated to products using activity-based costing are more accurate than traditional allocation systems.

________ is a costing system that starts with output that has been completed and then assigns manufacturing costs to units sold and to inventories.

________ is the maximum cost to develop,produce,and deliver a product or service and earn the desired profit.

A furniture corporation manufactures two models of furniture-Standard and Deluxe.The total manufacturing overhead is $64,350. The company uses direct labor costs as the base to allocate manufacturing overhead.Calculate the predetermined overhead rate.

Activity-based management uses activity-based costs to make decisions that increase profits while meeting customer needs.

Traditional costing systems employ multiple allocation rates,but an activity-based costing system uses only one rate for allocating manufacturing overhead.

Activity-based costing focuses on a single predetermined overhead rate for cost analysis.

Companies with diverse products can obtain better costing information by using a single plantwide rate.

Which of the following statements is true of the just-in-time costing system?

Traditional costing provides more detailed information on costs of activities and the drivers of these costs than activity-based costing.

Value engineering means reevaluating activities to reduce costs while still meeting customer needs.

________ in just-in-time management systems is completed in self-contained work cells.

While using an activity-based costing in service companies,the allocation of indirect costs to the cost object is the last step of the process.

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandise Inventory

Internal Control and Cash

Receivables

Plant Assets, natural Resources, and Intangibles

Investments

Current Liabilities and Payroll

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

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

Accounting Information Systems

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