Question 1

A nonvalue-adding activity is defined as a(n)

Accepted Answer

A)  administrative or support activity that adds overhead cost to the product and increases its market value. 
B)  activity that adds cost to a product but does not increase its market value. 
C)  activity that adds no cost to the product but increases its market value. 
D)  wasteful but unavoidable production activity. 
A)  administrative or support activity that adds overhead cost to the product and increases its market value. 
B)  activity that adds cost to a product but does not increase its market value. 
C)  activity that adds no cost to the product but increases its market value. 
D)  wasteful but unavoidable production activity.

Question 2

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 3

Only value-adding activities are included in the cost hierarchy.

Accepted Answer

A) True 
 B)False

Question 4

Cost traceability is decreased in a just-in-time operating environment.

Accepted Answer

A) True 
 B)False

Question 5

Product unit costs computed using activity-based costing compared to product unit costs computed using a traditional costing approach will

Accepted Answer

A)  sometimes be the same. 
B)  always be higher. 
C)  always be the same. 
D)  always be lower. 
A)  sometimes be the same. 
B)  always be higher. 
C)  always be the same. 
D)  always be lower.

Question 6

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 7

Push-through method is used in traditional manufacturing operations.

Accepted Answer

A) True 
 B)False

Question 8

When managing the production process in a just-in-time environment,the manager's focus is on throughput time.

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

Using traditional operating procedures a

Question 10

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 11

One element of a just-in-time operating environment is pull-through production,which means that a firm starts production of a product only after an order is received.

Accepted Answer

A) True 
 B)False

Question 12

Identify the following activities,performed on a manufactured product,as value-adding (V)or nonvalue-adding (NV).
_____
_____a. Receiving
_____b. Storing raw materials
_____c. Moving materials
_____d. Working on product
_____e. Painting product
_____ f. Packing and shipping
_____ g. Engineering design of product
_____ h. Storing finished goods

Accepted Answer

a.NV 
b.NV

Question 13

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 14

In a just-in-time manufacturing environment,both push-through and pull-through methods trigger scheduling of production.

Accepted Answer

A) True 
 B)False

Question 15

A bill of activities is used to compute both the costs assigned to activities and the product unit cost.

Accepted Answer

A) True 
 B)False

Question 16

Under new methods of management,attempts to continuously improve the work environment come from

Accepted Answer

A)  top management. 
B)  each department manager. 
C)  the board of directors. 
D)  everyone in the company. 
A)  top management. 
B)  each department manager. 
C)  the board of directors. 
D)  everyone in the company.

Question 17

Engineering design for mass-produced automobiles is classified as a(n)__________-level activity in an activity-based costing system.

Accepted Answer

A)  operations 
B)  batch 
C)  unit 
D)  product 
A)  operations 
B)  batch 
C)  unit 
D)  product

Question 18

Full product cost is relevant for companies providing services as well as those providing products.

Accepted Answer

A) True 
 B)False

Question 19

Just-in-time operating environments encourage continuous improvement of the work environment.

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

A) True 
 B)False

Exam 19: Value-Based Systems- Abm and Lean

A nonvalue-adding activity is defined as a(n)

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

Only value-adding activities are included in the cost hierarchy.

Cost traceability is decreased in a just-in-time operating environment.

Product unit costs computed using activity-based costing compared to product unit costs computed using a traditional costing approach will

In a just-in-time environment,

Push-through method is used in traditional manufacturing operations.

When managing the production process in a just-in-time environment,the manager's focus is on throughput time.

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

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

One element of a just-in-time operating environment is pull-through production,which means that a firm starts production of a product only after an order is received.

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

In a just-in-time manufacturing environment,both push-through and pull-through methods trigger scheduling of production.

A bill of activities is used to compute both the costs assigned to activities and the product unit cost.

Under new methods of management,attempts to continuously improve the work environment come from

Engineering design for mass-produced automobiles is classified as a(n)__________-level activity in an activity-based costing system.

Full product cost is relevant for companies providing services as well as those providing products.

Just-in-time operating environments encourage continuous improvement of the work environment.

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

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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