Question 1

For a manufacturer,materials storage is a value-adding activity.

Accepted Answer

A) True 
 B)False

Question 2

In a just-in-time environment,

Accepted Answer

A)  production runs are interrupted each day at setup time to perform routine maintenance. 
B)  scheduled and preventive maintenance is extremely important. 
C)  cost savings are realized by performing maintenance whenever it is needed. 
D)  routine minor maintenance is always performed by the repair department. 
A)  production runs are interrupted each day at setup time to perform routine maintenance. 
B)  scheduled and preventive maintenance is extremely important. 
C)  cost savings are realized by performing maintenance whenever it is needed. 
D)  routine minor maintenance is always performed by the repair department.

Question 3

Process value analysis (PVA)identifies all activities of a production and/or assembly operation for the purpose of

Accepted Answer

A)  preparing budgets based on activity centers. 
B)  determining the value of the process. 
C)  replacing cost drivers used in cost assignment analyses with activities. 
D)  relating cost assignment to the activities that caused the cost to be incurred. 
A)  preparing budgets based on activity centers. 
B)  determining the value of the process. 
C)  replacing cost drivers used in cost assignment analyses with activities. 
D)  relating cost assignment to the activities that caused the cost to be incurred.

Question 4

The Cost of Goods Sold account will have the same ending balance whether using traditional or backflush costing.

Accepted Answer

A) True 
 B)False

Question 5

A non-value-adding activity is one that adds cost to a product or service and also increases its market value.

Accepted Answer

A) True 
 B)False

Question 6

Typically,there are seven levels in the cost hierarchy.

Accepted Answer

A) True 
 B)False

Question 7

Push-through method is used in traditional manufacturing operations.

Accepted Answer

A) True 
 B)False

Question 8

When using a just-in-time system,what qualities should be used to evaluate a supplier?

Accepted Answer

The qualities to be sought in

Question 9

A manufacturer of audio equipment employing an activity-based cost hierarchy uses the unit,batch,product,and facility levels to classify its activities. A batch-level activity is

Accepted Answer

A)  testing products. 
B)  inspection. 
C)  implementation of engineering changes. 
D)  maintenance of the building. 
A)  testing products. 
B)  inspection. 
C)  implementation of engineering changes. 
D)  maintenance of the building.

Question 10

In a just-in-time operating environment,the key measure of cost incurred is

Accepted Answer

A)  direct labor hours. 
B)  push-through time. 
C)  throughput time. 
D)  indirect costs. 
A)  direct labor hours. 
B)  push-through time. 
C)  throughput time. 
D)  indirect costs.

Question 11

Which of the following statements about a just-in-time operating environment is true?

Accepted Answer

A)  Simplicity and quality are good, but inventories and nonvalue-adding activities are not. 
B)  Inventories are necessary to support the production function. 
C)  Just-in-time is based on push-through production concepts. 
D)  Just-in-time is based on the scientific management principles established by F.W. Taylor. 
A)  Simplicity and quality are good, but inventories and nonvalue-adding activities are not. 
B)  Inventories are necessary to support the production function. 
C)  Just-in-time is based on push-through production concepts. 
D)  Just-in-time is based on the scientific management principles established by F.W. Taylor.

Question 12

Lean's primary goal is to eliminate waste in business processes.

Accepted Answer

A) True 
 B)False

Question 13

A bill of activities may be used to calculate the product unit costs only for manufacturing concerns but not for service units.

Accepted Answer

A) True 
 B)False

Question 14

A value chain involves a sequence of value-creating activities within an organization.

Accepted Answer

A) True 
 B)False

Question 15

President/CEO to her Controller:
"On the golf course yesterday I overheard John Jeffers,the CEO for Octal,say that the problem with many manufacturing companies today is their antiquated manufacturing cost accounting systems.It appears to me that our cost accounting system has served us well as our company has grown and should continue to serve us well as we move into JIT production with our new flexible manufacturing system."
As the Controller,respond to the President/CEO.

Accepted Answer

As Controller,I would respond that the e

Question 16

Hugley Corp.recently installed three just-in-time work areas in its blank key-making division.The work areas will make large quantities of identical key blanks for door lock manufacturers.Select the best answer for how Hugley should run its business and account for product costs.

Accepted Answer

A)  Backflush costing 
B)  ABC 
C)  JIT and ABM 
D)  ABC and backflush costing 
A)  Backflush costing 
B)  ABC 
C)  JIT and ABM 
D)  ABC and backflush costing

Question 17

Backflush costing eliminates the need for a Cost of Goods Sold account.

Accepted Answer

A) True 
 B)False

Question 18

How does pull-through production help minimize inventories in a just-in-time operating environment?

Accepted Answer

A)  Products are made in anticipation of customer demand. 
B)  Products are made only when customer orders are received. 
C)  Products are made in large production runs. 
D)  Products are made identically. 
A)  Products are made in anticipation of customer demand. 
B)  Products are made only when customer orders are received. 
C)  Products are made in large production runs. 
D)  Products are made identically.

Question 19

You have been invited to address the Students In Free Enterprise (SIFE)team of your alma mater.The topic the team has chosen is the just-in-time philosophy in terms that beginning business students can readily comprehend.The meeting is taking place in the college cafeteria.Reservations and menu choices have been made in advance.It has been suggested that you use that setting as an example of the implementation of a JIT operating system.It will also be beneficial if you indicate in your talk some instances where JIT would be less suitable in the college food services situation.What will you say?

Accepted Answer

Just-in-time is an overall operating phi

Question 20

In a just-in-time environment,managing the production process focuses on

Accepted Answer

A)  total processing time per unit. 
B)  allocating overhead more accurately. 
C)  reducing inventories. 
D)  units produced per direct labor hour. 
A)  total processing time per unit. 
B)  allocating overhead more accurately. 
C)  reducing inventories. 
D)  units produced per direct labor hour.

Exam 19: Value-Based Systems- Abm and Lean

For a manufacturer,materials storage is a value-adding activity.

In a just-in-time environment,

Process value analysis (PVA)identifies all activities of a production and/or assembly operation for the purpose of

The Cost of Goods Sold account will have the same ending balance whether using traditional or backflush costing.

A non-value-adding activity is one that adds cost to a product or service and also increases its market value.

Typically,there are seven levels in the cost hierarchy.

Push-through method is used in traditional manufacturing operations.

When using a just-in-time system,what qualities should be used to evaluate a supplier?

A manufacturer of audio equipment employing an activity-based cost hierarchy uses the unit,batch,product,and facility levels to classify its activities. A batch-level activity is

In a just-in-time operating environment,the key measure of cost incurred is

Which of the following statements about a just-in-time operating environment is true?

Lean's primary goal is to eliminate waste in business processes.

A bill of activities may be used to calculate the product unit costs only for manufacturing concerns but not for service units.

A value chain involves a sequence of value-creating activities within an organization.

Hugley Corp.recently installed three just-in-time work areas in its blank key-making division.The work areas will make large quantities of identical key blanks for door lock manufacturers.Select the best answer for how Hugley should run its business and account for product costs.

Backflush costing eliminates the need for a Cost of Goods Sold account.

How does pull-through production help minimize inventories in a just-in-time operating environment?

In a just-in-time environment,managing the production process focuses on

Uses of Accounting Information and the Financial Statements

Analyzing Business Transactions

Measuring Business Income

Supplement - Closing Entries and the Work Sheet

Financial Reporting and Analysis

The Operating Cycle and Merchandising Operations

Inventories

Cash and Receivables

Current Liabilities and Fair Value Accounting

Long Term Assets

Long-Term Liabilities

Contributed Capital

Investments

The Corporate Income Statement and the Statement of Stockholders Equity

The Statement of Cash Flows

The Changing Business Environment - a Managers Perspective

Cost Concepts and Cost Allocation

Costing Systems- Job Order Costing

Costing Systems- Process Costing

Cost Behavior Analysis

The Budgeting Process

Performance Management and Evaluation

Standard Costing and Variance Analysis

Short Run Decision Analysis

Capital Investment Analysis

Pricing Decisions,incltarget Costing and Transfer Pricing

Quality Management and Measurement

Financial Analysis of Performance

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