Question 1

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

Accepted Answer

A)  Unit-level activity 
B)  Batch-level activity 
C)  Product-level activity 
D)  Facility-level activity 
A)  Unit-level activity 
B)  Batch-level activity 
C)  Product-level activity 
D)  Facility-level activity

Question 2

Activity-based management is useful for both strategic planning and operational decision making.

Accepted Answer

A) True 
 B)False

Question 3

A nonvalue-adding activity is one that increases the cost of a product but does not add to the product's market value.

Accepted Answer

A) True 
 B)False

Question 4

Activity-based costing is useful for profit planning.

Accepted Answer

A) True 
 B)False

Question 5

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 6

According to the just-in-time philosophy,

Accepted Answer

A)  maintaining inventories wastes resources and frequently covers up poor work or other problems. 
B)  push-through manufacturing flows are the most efficient. 
C)  inventories of finished goods should always be available to meet customer demand. 
D)  long production runs and large production lot sizes take advantage of economies of scale. 
A)  maintaining inventories wastes resources and frequently covers up poor work or other problems. 
B)  push-through manufacturing flows are the most efficient. 
C)  inventories of finished goods should always be available to meet customer demand. 
D)  long production runs and large production lot sizes take advantage of economies of scale.

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

Match between columns
                        Premises:  Machine operator's hourly wages
 City operating license
 Machine helper's wages
 Wiring used in radios
 Indirect materials
 Property insurance
 Gasoline for delivery truck
 Real estate taxes

Accepted Answer

The Answer of variable and fixed is...

Question 9

For a manufacturer,the final customer is part of the supply chain and customer service is part of the value chain.

Accepted Answer

A) True 
 B)False

Question 10

Backflush costing eliminates the need to make journal entries during the period to track cost flows through the production process as the product is made.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following activities would be part of the supply chain of a manufacturer?

Accepted Answer

A)  Shipping 
B)  Customer service 
C)  Parts manufacturing 
D)  Research and development 
A)  Shipping 
B)  Customer service 
C)  Parts manufacturing 
D)  Research and development

Question 12

Engineering design is an activity vital to the success of any motor vehicle manufacturer.Identify the level at which engineering design would be classified in the cost hierarchy used with ABC for a maker of unique luxury automobiles.

Accepted Answer

A)  Unit-level activity 
B)  Batch-level activity 
C)  Product-level activity 
D)  Facility-level activity 
A)  Unit-level activity 
B)  Batch-level activity 
C)  Product-level activity 
D)  Facility-level activity

Question 13

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 14

Which of the following activities would be part of the value chain of a manufacturer?

Accepted Answer

A)  Inventory control 
B)  Product engineering 
C)  Cost accounting 
D)  Materials storage 
A)  Inventory control 
B)  Product engineering 
C)  Cost accounting 
D)  Materials storage

Question 15

The major objective of the just-in-time operating environment is to

Accepted Answer

A)  create pull-through production. 
B)  develop a multiskilled work force. 
C)  substitute automation for manual operations. 
D)  reduce waste and improve quality and productivity. 
A)  create pull-through production. 
B)  develop a multiskilled work force. 
C)  substitute automation for manual operations. 
D)  reduce waste and improve quality and productivity.

Question 16

Comparing activity-based management (ABM)and lean operations,all of the following are correct except

Accepted Answer

A)  both identify value-adding and nonvalue-adding activities. 
B)  ABM uses a more complex accounting system. 
C)  both are activity-based systems. 
D)  JIT focuses on the accuracy of cost assignment. 
A)  both identify value-adding and nonvalue-adding activities. 
B)  ABM uses a more complex accounting system. 
C)  both are activity-based systems. 
D)  JIT focuses on the accuracy of cost assignment.

Question 17

The repair of machines is an example of a nonvalue-adding activity.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

Activity-based management focuses on identifying product costs as either value-adding or nonvalue-adding activities.

Accepted Answer

A) True 
 B)False

Question 20

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

Exam 19: Value-Based Systems- Abm and Lean

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

Activity-based management is useful for both strategic planning and operational decision making.

A nonvalue-adding activity is one that increases the cost of a product but does not add to the product's market value.

Activity-based costing is useful for profit planning.

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

According to the just-in-time philosophy,

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

For a manufacturer,the final customer is part of the supply chain and customer service is part of the value chain.

Backflush costing eliminates the need to make journal entries during the period to track cost flows through the production process as the product is made.

Which of the following activities would be part of the supply chain of a manufacturer?

Engineering design is an activity vital to the success of any motor vehicle manufacturer.Identify the level at which engineering design would be classified in the cost hierarchy used with ABC for a maker of unique luxury automobiles.

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

Which of the following activities would be part of the value chain of a manufacturer?

The major objective of the just-in-time operating environment is to

Comparing activity-based management (ABM)and lean operations,all of the following are correct except

The repair of machines is an example of a nonvalue-adding activity.

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

Activity-based management focuses on identifying product costs as either value-adding or nonvalue-adding activities.

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

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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