Question 1

A company is most likely to use value engineering ________.

Accepted Answer

A) to allocate manufacturing overhead to departments 
B) to reduce costs in order to achieve target costs 
C) to determine accurate product costs for pricing 
D) to make product mix decisions 
A) to allocate manufacturing overhead to departments 
B) to reduce costs in order to achieve target costs 
C) to determine accurate product costs for pricing 
D) to make product mix decisions

Question 2

The steps of an activity-based costing for a service firm are significantly different from that used for a manufacturing firm.

Accepted Answer

A) True 
 B)False

Question 3

Internal failure costs are costs incurred ________.

Accepted Answer

A) to detect poor-quality materials,goods,or services 
B) when the company detects and corrects poor-quality goods or services before delivery to customers 
C) after the company delivers poor-quality goods or services to customers and then has to make things right with the customer 
D) to avoid poor-quality goods or services 
A) to detect poor-quality materials,goods,or services 
B) when the company detects and corrects poor-quality goods or services before delivery to customers 
C) after the company delivers poor-quality goods or services to customers and then has to make things right with the customer 
D) to avoid poor-quality goods or services

Question 4

The activity-based costing system improves the allocation of ________.

Accepted Answer

A) indirect manufacturing costs 
B) direct labor 
C) direct materials 
D) sales commissions 
A) indirect manufacturing costs 
B) direct labor 
C) direct materials 
D) sales commissions

Question 5

Just-in-time management systems typically help reduce direct labor costs of a company.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is a disadvantage of just-in-time management system?

Accepted Answer

A) It results in a decrease in production space. 
B) It increases the inventory cost. 
C) The risk of the inventory becoming obsolete is very high. 
D) The users of this system often lose sales because of little or no inventory buffers. 
A) It results in a decrease in production space. 
B) It increases the inventory cost. 
C) The risk of the inventory becoming obsolete is very high. 
D) The users of this system often lose sales because of little or no inventory buffers.

Question 7

Pitt Jones Company,a manufacturer of small appliances,had the following activities,allocated costs,and allocation bases:   The above activities are carried out at two of its regional offices.
  
-How much of the account inquiry cost will be assigned to the Midwest Office?

Accepted Answer

A) $2,000 
B) $6,500 
C) $3,000 
D) $6,000 
A) $2,000 
B) $6,500 
C) $3,000 
D) $6,000

Question 8

Under a just-in-time costing system,the journal entry that is recorded when the goods are completed and moved to Finished Goods Inventory is ________.

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 9

Caprice Inc.has adopted a JIT management system and has the following transactions in December:
   Record the journal entries for Caprice Inc.for December.

Accepted Answer

The answer of Caprice Inc.has adopted a JIT management system...

Question 10

Cost incurred in training employees is an example of a(n)________.

Accepted Answer

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

Question 11

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.Additional information is as follows:   What is the cost of assembling per ceiling fan?

Accepted Answer

A) $87.50 
B) $7.00 
C) $7.50 
D) $35.00 
A) $87.50 
B) $7.00 
C) $7.50 
D) $35.00

Question 12

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 amount of overhead to be allocated to Totes.

Accepted Answer

A) $36,000 
B) $25,740 
C) $10,500 
D) $13,750 
A) $36,000 
B) $25,740 
C) $10,500 
D) $13,750

Question 13

Ace Plastics produces different kinds of products,all in one manufacturing facility.They have identified four activities for their costing system:
Materials management-allocated by number of purchase orders
Chemical processing-allocated on metric tons
Molding-allocated on direct labor hours
Packaging-allocated by number of units produced
The activity rates are as follows:
   Engineering design shows that the order will require direct material worth $540,direct labor cost being $90.The order will also require four purchase orders to be placed,use 2 metric tons of chemical base,and need 8 direct labor hours.The size of the order is to produce 3,000 units of product.Calculate total cost of production of the order.

Accepted Answer

Calculation of total

Question 14

Pitt Jones Company,a manufacturer of small appliances,had the following activities,allocated costs,and allocation bases:   The above activities are carried out at two of its regional offices.
  
-What is the cost per account for the account verification activity?

Accepted Answer

A) $30.00 
B) $0.50 
C) $2.25 
D) $0.75 
A) $30.00 
B) $0.50 
C) $2.25 
D) $0.75

Question 15

An inventory management system in which a company produces just in time to satisfy customer needs is known as just-in-time management.

Accepted Answer

A) True 
 B)False

Question 16

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 $31,000 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 17

Which of the following triggers manufacturing under the just-in-time management system?

Accepted Answer

A) increased purchase 
B) consumer demand 
C) government pressure 
D) budgeted profit 
A) increased purchase 
B) consumer demand 
C) government pressure 
D) budgeted profit

Question 18

Costs incurred in customer service are categorized as ________.

Accepted Answer

A) prevention costs 
B) appraisal costs 
C) internal failure costs 
D) external failure costs 
A) prevention costs 
B) appraisal costs 
C) internal failure costs 
D) external failure costs

Question 19

A company is considering spending the following on a new quality improvement program:
   The company expects this quality program to reduce costs by the following amounts:
   Group each cost under the four categories of quality management systems.Comment whether the company should undertake the quality improvement program.

Accepted Answer

@#IMG-DLM& @#IMG-DLM& @#IMG-DLM& @#IMG-DLM& @#IMG-DLM& @#IMG-DLM& These estimates suggest

Question 20

Activity-based costing uses a common allocation base for all activities.

Accepted Answer

A) True 
 B)False

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

A company is most likely to use value engineering ________.

The steps of an activity-based costing for a service firm are significantly different from that used for a manufacturing firm.

Internal failure costs are costs incurred ________.

The activity-based costing system improves the allocation of ________.

Just-in-time management systems typically help reduce direct labor costs of a company.

Which of the following is a disadvantage of just-in-time management system?

Pitt Jones Company,a manufacturer of small appliances,had the following activities,allocated costs,and allocation bases: The above activities are carried out at two of its regional offices. -How much of the account inquiry cost will be assigned to the Midwest Office?

Under a just-in-time costing system,the journal entry that is recorded when the goods are completed and moved to Finished Goods Inventory is ________.

Caprice Inc.has adopted a JIT management system and has the following transactions in December: Record the journal entries for Caprice Inc.for December.

Cost incurred in training employees is an example of a(n)________.

Pitt Jones Company,a manufacturer of small appliances,had the following activities,allocated costs,and allocation bases: The above activities are carried out at two of its regional offices. -What is the cost per account for the account verification activity?

An inventory management system in which a company produces just in time to satisfy customer needs is known as just-in-time management.

Which of the following triggers manufacturing under the just-in-time management system?

Costs incurred in customer service are categorized as ________.

Activity-based costing uses a common allocation base for all activities.

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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