Question 1

Appraisal costs are costs incurred ________.

Accepted Answer

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

Question 2

In the first step in developing an activity-based costing system,the management team must think about how each activity for a product or service might be improved or whether is it necessary at all.

Accepted Answer

A) True 
 B)False

Question 3

When preparing the report to analyze a proposed quality improvement program,which of the following are included in the costs to continue without the quality improvement program?

Accepted Answer

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

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

Activity-based costing refines the cost allocation process even more than traditional allocation costing systems.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is a nonmanufacturing cost?

Accepted Answer

A) direct labor 
B) direct materials 
C) administrative expenses 
D) indirect labor 
A) direct labor 
B) direct materials 
C) administrative expenses 
D) indirect labor

Question 8

Internal failure costs are costs incurred ________.

Accepted Answer

A) to detect poor-quality materials,goods,or services 
B) when the company 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 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 9

Dunby,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 $160,000.The company is expected to work 6,000 direct labor hours during the year.The direct labor rate is $200 per hour.Clients are billed at 120% of direct labor cost.Last month,Dunby's consultants spent 170 hours on Xyme,Inc.What is the predetermined overhead allocation rate per direct labor hour?

Accepted Answer

A) $800 per hour 
B) $27 per hour 
C) $941 per hour 
D) $30 per hour 
A) $800 per hour 
B) $27 per hour 
C) $941 per hour 
D) $30 per hour

Question 10

Quality management systems (QMS)are systems that help managers improve the business's performance by providing quality products and services.

Accepted Answer

A) True 
 B)False

Question 11

The just-in-time management system is a(n)________.

Accepted Answer

A) labor management system 
B) overhead management system 
C) cost management system 
D) debt management system 
A) labor management system 
B) overhead management system 
C) cost management system 
D) debt management system

Question 12

Vincent Jardine,a CPA,has a firm in the state of New York.Vincent uses ABC to allocate overhead costs and has computed the following predetermined overhead allocation rates:
 $\begin{array}{lll}
\text { Activity } & \text { Allocation Base } & \text { Allocation Rate } \
\hline \text { Photocopy expenses } & \text { Number of pages } & \$ 0.75 \text { per page } \
\text { Cost of maintenance } & \text { Number of labor hours } & \$ 10.00 \text { per hour }
\end{array}$ Vincent has important contacts in the northeastern parts of New York.During the past month,Vincent completed a job for Nurix,Inc.The job required 135 labor hours and 4,000 photocopies.Determine the amount of indirect costs to be allocated to the job.

Accepted Answer

The answer of Vincent Jardine,a CPA,has a firm in the...

Question 13

Activity-based management is not suitable for service companies as it deals with the proper allocation of manufacturing overhead costs.

Accepted Answer

A) True 
 B)False

Question 14

Agostino,Inc.uses a just-in-time costing system.During the month,Agostino incurred $300,000 as direct labor and $9,000 as overhead.Which of the following is the correct journal entry to record the conversion costs?

Accepted Answer

A)  $$\begin{array} { | c | r | r | } 
\hline \text { Conversion Costs } & 309,000 & \
\hline \text { Wages Payable, Accumulated Depreciation, etc. } & & 309,000 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | c | r | r | } 
\hline \text { Conversion Costs } & 309,000 & \
\hline \text { Wages Payable } & & 309,000 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | c | r | r | } 
\hline \text { Manufacturing Overhead } & 309,000 & \
\hline \text { Conversion Costs } & & 309,000 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | c | r | r | } 
\hline \text { Conversion Costs } & 309,000 & \
\hline \text { Accounts Payable } & & 309,000 \
\hline
\end{array}$$ 
A)  $$\begin{array} { | c | r | r | } 
\hline \text { Conversion Costs } & 309,000 & \
\hline \text { Wages Payable, Accumulated Depreciation, etc. } & & 309,000 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | c | r | r | } 
\hline \text { Conversion Costs } & 309,000 & \
\hline \text { Wages Payable } & & 309,000 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | c | r | r | } 
\hline \text { Manufacturing Overhead } & 309,000 & \
\hline \text { Conversion Costs } & & 309,000 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | c | r | r | } 
\hline \text { Conversion Costs } & 309,000 & \
\hline \text { Accounts Payable } & & 309,000 \
\hline
\end{array}$$

Appraisal costs are costs incurred ________.

In the first step in developing an activity-based costing system,the management team must think about how each activity for a product or service might be improved or whether is it necessary at all.

When preparing the report to analyze a proposed quality improvement program,which of the following are included in the costs to continue without the quality improvement program?

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

Activity-based costing refines the cost allocation process even more than traditional allocation costing systems.

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

Which of the following is a nonmanufacturing cost?

Internal failure costs are costs incurred ________.

Quality management systems (QMS)are systems that help managers improve the business's performance by providing quality products and services.

The just-in-time management system is a(n)________.

Activity-based management is not suitable for service companies as it deals with the proper allocation of manufacturing overhead costs.

Agostino,Inc.uses a just-in-time costing system.During the month,Agostino incurred $300,000 as direct labor and $9,000 as overhead.Which of the following is the correct journal entry to record the conversion costs?

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

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

Appraisal costs are costs incurred ________.

In the first step in developing an activity-based costing system,the management team must think about how each activity for a product or service might be improved or whether is it necessary at all.

When preparing the report to analyze a proposed quality improvement program,which of the following are included in the costs to continue without the quality improvement program?

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

Activity-based costing refines the cost allocation process even more than traditional allocation costing systems.

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

Which of the following is a nonmanufacturing cost?

Internal failure costs are costs incurred ________.

Quality management systems (QMS)are systems that help managers improve the business's performance by providing quality products and services.

The just-in-time management system is a(n)________.

Activity-based management is not suitable for service companies as it deals with the proper allocation of manufacturing overhead costs.

Agostino,Inc.uses a just-in-time costing system.During the month,Agostino incurred $300,000 as direct labor and $9,000 as overhead.Which of the following is the correct journal entry to record the conversion costs?

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