Exam 19: Value-Based Systems- Abm and Lean

Backflush costing aims at decreasing waste in the production process.

Both the number of entries and the number of ledger accounts decrease when you change to a backflush costing system.

How can activity-based systems help managers in a global marketplace?

Nonproduction costs are not included in full product cost.

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

In activity-based costing,the first step in assigning costs is to

Which one of the four levels of the cost hierarchy would be used by a dress manufacturer that uses activity-based management for the routine maintenance of sewing machines?

In a just-in-time environment,more quality control inspectors are needed because of the high speed of production.

Which of the following statements contradicts the philosophy underlying the just-in-time operating environment?

Many indirect costs in a traditional system become direct costs in a JIT system.

Unit level,batch level,and service level are examples of cost drivers.

In a just-in-time environment,costs associated with product movement and storage typically decrease,whereas costs of inspection and queue time typically increase.

The value chain is the sequence of business activities in which usefulness is added to the products or the services within an organization.

Many of the reports and analyses prepared in traditional management settings need to be changed to satisfy managers' needs in the new manufacturing environment.

Which one of the four levels of the cost hierarchy would be used by a dress manufacturer that uses activity-based management for a production run of a certain style of dress in blue?

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

The Yeva Company produces children's automobile car seats.The company recently changed from a traditional production environment to just-in-time work cells.The company's car seats are widely distributed in popular retail stores.Would you recommend the use of backflush costing or ABM/ABC for tracking product costs? Explain your choice of system.

Value-based systems are information systems that provide only customer-related information but not activity-based information.

Distinguish between push-through and pull-through production methods.How does pull-through production meet the requirements of a just-in-time operating environment?

For work done during August,Printing Press Company incurred direct materials costs of $151,000 and conversion costs of $250,000.The company employs a traditional operating philosophy.At the end of August,it was determined that the Work in Process Inventory account had been assigned $1,000 of costs,and the ending balance of the Finished Goods Inventory account was $3,000.There were no beginning inventory balances.How much was charged to the Cost of Goods Sold account during August?