Question 1

Activity-based management is an extension of activity-based costing.

Accepted Answer

A) True 
 B)False

Question 2

Both traditional and backflush costing have an account for __________ Inventory.

Accepted Answer

A)  Materials 
B)  Raw in Process 
C)  Finished Goods 
D)  Conversion Costs 
A)  Materials 
B)  Raw in Process 
C)  Finished Goods 
D)  Conversion Costs

Question 3

Backflush costing aims at reducing waste in the

Accepted Answer

A)  accounting system. 
B)  cost of goods sold. 
C)  storage of raw materials. 
D)  production process. 
A)  accounting system. 
B)  cost of goods sold. 
C)  storage of raw materials. 
D)  production process.

Question 4

Full product cost includes

Accepted Answer

A)  all direct labor and direct material costs and all production and nonproduction costs. 
B)  only nonproduction costs. 
C)  only the costs of direct material. 
D)  only the costs of direct labor. 
A)  all direct labor and direct material costs and all production and nonproduction costs. 
B)  only nonproduction costs. 
C)  only the costs of direct material. 
D)  only the costs of direct labor.

Question 5

In a traditional environment, costs are tracked through the various production departments as products or services move through the production process.

Accepted Answer

A) True 
 B)False

Question 6

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 7

The customer's perspective governs whether an activity adds value to a product or service.

Accepted Answer

A) True 
 B)False

Question 8

A work cell is an autonomous production line that can perform only one required operation efficiently at a time.

Accepted Answer

A) True 
 B)False

Question 9

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 10

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 11

In just-in-time manufacturing, the basic cost classifications used in product costing are materials and conversion costs.

Accepted Answer

A) True 
 B)False

Question 12

A cost hierarchy and a bill of activities are tools for the implementation of activity-based costing.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

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.

Accepted Answer

Yeva produces a large quantity of simila

Question 17

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

Accepted Answer

Activity-based systems are information s

Question 18

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.

Accepted Answer

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

Question 19

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

Accepted Answer

A)  redesigning the process. 
B)  setting up the production process. 
C)  testing the product. 
D)  insuring the factory. 
A)  redesigning the process. 
B)  setting up the production process. 
C)  testing the product. 
D)  insuring the factory.

Question 20

The just-in-time operating environment typically is characterized by the positioning of all similar machines together on the factory floor.

Accepted Answer

A) True 
 B)False

Exam 22: Activity-Based Systems-Abm and Lean

Activity-based management is an extension of activity-based costing.

Both traditional and backflush costing have an account for __________ Inventory.

Backflush costing aims at reducing waste in the

Full product cost includes

In a traditional environment, costs are tracked through the various production departments as products or services move through the production process.

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

The customer's perspective governs whether an activity adds value to a product or service.

A work cell is an autonomous production line that can perform only one required operation efficiently at a time.

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.

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

In just-in-time manufacturing, the basic cost classifications used in product costing are materials and conversion costs.

A cost hierarchy and a bill of activities are tools for the implementation of activity-based costing.

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

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

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

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

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

The just-in-time operating environment typically is characterized by the positioning of all similar machines together on the factory floor.

Uses of Accounting Information and the Financial Statements

Analyzing Business Transactions

Measuring Business Income

Completing the Accounting Cycle

Financial Reporting and Analysis

The Operating Cycle and Merchandising Operations

Internal Control

Inventories

Cash and Receivables

Current Liabilities and Fair Value Accounting

Long Term Assets

Contributed Capital

Long Term Liabilities

The Corporate Income Statement and the Statement of Stockholders Equity

The Statement of Cash Flows

Financial Performance Measurement

Partnerships

The Changing Business Environment-A Managers Pers

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

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