Question 1

________ 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 2

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 3

Which of the following decisions will most likely involve the use of activity-based management?

Accepted Answer

A) decisions related to the financing of an investment using equity or debt 
B) decisions related to the expansion operations in a particular geographic location 
C) decisions related to the pricing of a product 
D) decisions related to the payment of dividends 
A) decisions related to the financing of an investment using equity or debt 
B) decisions related to the expansion operations in a particular geographic location 
C) decisions related to the pricing of a product 
D) decisions related to the payment of dividends

Question 4

For each of the following activities,indicate an appropriate allocation base:
 $\begin{array}{|l|l|}
\hline\text { Activity } & \text { Allocation Base } \
\hline \text { Warranty Services - Providing service } & \
\text { for defective products } & \
\hline \text { Setup - Setting up machines for } & \
\text { production } & \
\hline \text { Shipping - Shipping finished } & \
\text { products to customers } & \
\hline \text { Machining - Machine usage } & \
\hline \text { Purchasing - Purchasing raw } & \
\text { materials } &\\hline
\end{array}$

Accepted Answer

Students answers will vary.Suggest answe

Question 5

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

None

Question 6

Florian Plant Services completed a special landscaping job for Pierre Designs Company.Florian uses ABC and has the following predetermined overhead allocation rates:
 $\begin{array}{llc}&& \text { Predetermined Overhead } \
\text { Activity } & \text { Allocation Base } &\text { Allocation Rate }\
\hline \text { Designing } & \text { Number of designs } & \$ 275 \text { per design } \
\text { Planting } & \text { Number of plants } & \$ 15 \text { per plant }
\end{array}$ The Pierre Designs project required $1,200 in landscape materials,$700 in direct labor,one design,and 35 plants.
Requirements:
1.What is the total cost of the work done for Pierre Designs?
2.If Pierre Designs paid $3,900 for the job,what is the operating income or loss?
3.If Florian desires an operating income of 50% of cost,how much should the company charge for the Pierre Designs project?

Accepted Answer

The answer of Florian Plant Services completed a special landscaping...

Question 7

A modification of the overhead allocation method which uses a single plantwide rate,is to use multiple predetermined overhead allocation rates that have a single allocation base.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is an attribute of traditional costing systems?

Accepted Answer

A) raw materials are ordered in large quantities 
B) production is completed in self-contained work cells 
C) suppliers make frequent deliveries of small quantities of raw materials 
D) management works with suppliers to ensure defect-free raw materials 
A) raw materials are ordered in large quantities 
B) production is completed in self-contained work cells 
C) suppliers make frequent deliveries of small quantities of raw materials 
D) management works with suppliers to ensure defect-free raw materials

Question 9

What is activity-based management? How is it different from activity-based costing?

Accepted Answer

Activity-based management uses activity-

Question 10

Just-in-time costing systems use a combined account for Raw Materials Inventory and Work-in-Process Inventory known as the ________.

Accepted Answer

A) Raw Materials Inventory account 
B) Work-in-Process Inventory account 
C) Raw and In-Process Inventory account 
D) Process account 
A) Raw Materials Inventory account 
B) Work-in-Process Inventory account 
C) Raw and In-Process Inventory account 
D) Process account

Question 11

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 12

Jennings Company manufactures ceiling fans and uses an activity-based costing system.Each ceiling fan has 20 separate parts.The direct materials cost is $85 and each ceiling fan requires 2.50 hours of machine time to manufacture.Additional information is as follows: $\begin{array}{|l|c|c|} 
\hline&&\text { Predetermined Overhead } \
\text { Activity } & \text { Allocation Base } & \text { Allocation Rate }\ 
\hline \text { Materials handling } & \text { Number of parts } & \$ 0.08 \
\hline \text { Machining } & \text { Machine hours } &6.20 \
\hline \text { Assembling } & \text { Number of parts } &0.30 \
\hline \text { Sackaging } & \text { Number of finished units } &2.30 \
\hline
\end{array}$
 What is the total manufacturing cost per ceiling fan? (Round any intermediate calculations and your final answer to the nearest cent. )

Accepted Answer

A) $97.70 
B) $104.80 
C) $112.80 
D) $116.70 
A) $97.70 
B) $104.80 
C) $112.80 
D) $116.70

Question 13

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 14

For a pharmaceutical company,the most suitable base for allocating research and development costs to the finished products would be the ________.

Accepted Answer

A) direct labor hours 
B) cost of raw materials purchased 
C) number of new patents filed 
D) number of set ups 
A) direct labor hours 
B) cost of raw materials purchased 
C) number of new patents filed 
D) number of set ups

Question 15

Fill in the blanks:
-
Direct materials cost and direct labor cost can be ________ ________ to products.Manufacturing overhead costs are ________ in cost pools and then ________ to products.

Accepted Answer

easily tra

Question 16

Under the just-in-time costing system,a credit purchase of raw materials is recorded by ________.

Accepted Answer

A) debiting the Raw Materials Inventory account 
B) crediting the Conversion Costs account 
C) debiting the Raw and In-Process Inventory account 
D) crediting the Cash account 
A) debiting the Raw Materials Inventory account 
B) crediting the Conversion Costs account 
C) debiting the Raw and In-Process Inventory account 
D) crediting the Cash account

Question 17

Quality costs can be hard to measure.

Accepted Answer

A) True 
 B)False

Question 18

Jetz,Inc.manufactures water bottles for children.Similar water bottles are available in the market for $8.00.Jetz desires a 24% net profit margin.Jetz's target cost is ________.(Round your answer to the nearest cent. )

Accepted Answer

A) $6.08 
B) $9.92 
C) $8.00 
D) $1.92 
A) $6.08 
B) $9.92 
C) $8.00 
D) $1.92

Question 19

Alfeo Corporations has adopted a JIT management system and has the following transactions in February:
 Feb 2 Incurred labor and overhead costs, $89,000
Feb 18 Completed 750 units with standard costs of $\$ 93$ for direct materials and $\$ 146$ for conversion costs Open a T-account for Conversion Costs.Post appropriate entries to determine the amount of underallocated or overallocated overhead.Record the adjusting entry.

Accepted Answer

\[\begin{array}{c}
\text { Conversion Ca

Question 20

List and briefly discuss three major differences between just-in-time costing (JIT)and traditional costing.

Accepted Answer

JIT costing does not track the cost of p

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

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

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 decisions will most likely involve the use of activity-based management?

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?

A modification of the overhead allocation method which uses a single plantwide rate,is to use multiple predetermined overhead allocation rates that have a single allocation base.

Which of the following is an attribute of traditional costing systems?

What is activity-based management? How is it different from activity-based costing?

Just-in-time costing systems use a combined account for Raw Materials Inventory and Work-in-Process Inventory known as the ________.

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.

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

For a pharmaceutical company,the most suitable base for allocating research and development costs to the finished products would be the ________.

Fill in the blanks: - Direct materials cost and direct labor cost can be ________ ________ to products.Manufacturing overhead costs are ________ in cost pools and then ________ to products.

Under the just-in-time costing system,a credit purchase of raw materials is recorded by ________.

Quality costs can be hard to measure.

Jetz,Inc.manufactures water bottles for children.Similar water bottles are available in the market for $8.00.Jetz desires a 24% net profit margin.Jetz's target cost is ________.(Round your answer to the nearest cent. )

List and briefly discuss three major differences between just-in-time costing (JIT)and traditional costing.

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

Filters

Fill in the blanks: - Direct materials cost and direct labor cost can be to products.Manufacturing overhead costs are in cost pools and then to products.