Exam 19: Value-Based Systems- Abm and Lean

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 a line of automobiles sold throughout the world.

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

A change to just-in-time manufacturing expands mainly the role of the

Full product cost includes

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

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

Activity-based costing applies only to production-related activities.

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

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 built-to-order city and county emergency vehicles (orders are usually placed for 10 to 12 identical vehicles).

For a company offering services,which of the following is a value-adding activity?

Nonproduction costs are not included in full product cost.

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

Traditional environments emphasize functional departments that tend to group similar activities together.

Activity costs per unit equal total activity costs divided by total volume.

Listed below are a number of common manufacturing costs.For each cost,state whether the cost would be considered a direct (D)or indirect (I)cost in a traditional manufacturing environment and in a JIT manufacturing environment.

Nonvalue-adding activity costs do not increase a product's cost because they do not add value to the product.

A framework for classifying value-adding and nonvalue-adding activities according to the level at which their costs are incurred is called a

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

Shifting to a just-in-time approach in a manufacturing environment usually requires a new approach in evaluating costs.

For work done during August,Printing Press Company incurred direct materials costs of $130,000 and conversion costs of $248,000.The company employs a just-in-time operating philosophy and backflush costing.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.What is the Cost of Goods Sold account's ending balance for August?