Question 1

When using a just-in-time system,what qualities should be a supplier posses?

Accepted Answer

The qualities a JIT supplier should posses are the capabilities of (1)supplying high-quality goods and (2)on-time delivery,neither too early nor too late.

Question 2

Which of the following is reduced by a just-in-time operations?

Accepted Answer

A) Inspection time and moving time 
B) Only storage time 
C) Moving time and processing time 
D) Inspection time and processing time 
A) Inspection time and moving time 
B) Only storage time 
C) Moving time and processing time 
D) Inspection time and processing time A

Question 3

Define activity-based costing.Explain why this approach to cost assignments is superior to the traditional method of using a plantwide overhead cost rate.Will activity-based costing always result in lower product costs? Justify your answer.

Accepted Answer

Activity-based costing is an approach to cost assignment that identifies all major operating activities,categorizes costs by activity,reduces or eliminates nonvalue-adding activities,and assigns costs using a basis that causes the costs to be incurred.ABC assigns costs using many different activities and cost drivers (allocation bases)and,in turn,significantly improves the traceability of costs to products.Using one overhead rate assumes that all costs are caused by one basis,which is not true.By tracing costs to the activities that cause the costs and then by determining the amount of each activity used by a product or batch of products,costs can be traced more accurately.
No,ABC will not always result in lower product costs,at least in the short run.Improving cost traceability may result in lowering some product costs while increasing others.But over the long run,if all nonvalue-adding activities are reduced or eliminated,all product costs will benefit.

Question 4

The ending balance of the Cost of Goods Sold account will differ in traditional and backflush costing.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

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 always goes through two or more processes. 
D) Products produced are always identical. 
A) Products are made in anticipation of customer demand. 
B) Products are made only when customer orders are received. 
C) Products always goes through two or more processes. 
D) Products produced are always identical.

Question 7

Shifting to a just-in-time approach in a manufacturing environment usually will not require a new approach in evaluating costs.

Accepted Answer

A) True 
 B)False

Question 8

Which of the four levels of the cost hierarchy would be used by a dress manufacturer using an activity-based management to design a pattern for a new dress style?

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 9

A manufacturing chain is a path that leads from the suppliers of the materials from which a product is made to the final customer.

Accepted Answer

A) True 
 B)False

Question 10

A just-in-time environment has smaller inventories than the traditional manufacturing environment.As a result,

Accepted Answer

A) larger production lot sizes are the rule,in order to realize the cost-effectiveness of long production runs. 
B) the amount of working capital required for inventory typically increases. 
C) the just-in-time environment experiences a lower inventory turnover than the traditional environment. 
D) the just-in-time environment typically experiences a higher inventory turnover than the traditional environment. 
A) larger production lot sizes are the rule,in order to realize the cost-effectiveness of long production runs. 
B) the amount of working capital required for inventory typically increases. 
C) the just-in-time environment experiences a lower inventory turnover than the traditional environment. 
D) the just-in-time environment typically experiences a higher inventory turnover than the traditional environment.

Question 11

To minimize costs,managers continuously seek to improve processes and activities.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is a facility-level cost?

Accepted Answer

A) Testing products 
B) Redesigning the process 
C) Maintaining the factory 
D) Materials handling 
A) Testing products 
B) Redesigning the process 
C) Maintaining the factory 
D) Materials handling

Question 13

In a just-in-time setting,the time spent reworking defective units is called __________ time.

Accepted Answer

A) storage 
B) inspection 
C) queue 
D) throughput 
A) storage 
B) inspection 
C) queue 
D) throughput

Question 14

Value -based systems are information systems that provide customer- related,activity -based information.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following creates a flexible work cell in a just-in-time manufacturing environment?

Accepted Answer

A) Grouping similar machines together 
B) Bringing people with differing work skills together into one work area 
C) Placing together a complete set of machines that produce a complete product 
D) Grouping people with similar skills together 
A) Grouping similar machines together 
B) Bringing people with differing work skills together into one work area 
C) Placing together a complete set of machines that produce a complete product 
D) Grouping people with similar skills together

Question 16

Which of the following is a product-level activity cost?

Accepted Answer

A) Securing the factory 
B) Testing the speakers 
C) Redesigning the installation process 
D) Materials handling 
A) Securing the factory 
B) Testing the speakers 
C) Redesigning the installation process 
D) Materials handling

Question 17

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 18

In a just-in-time environment using backflush costing,the entry to record the use of materials for the month's production is debit __________ and credit __________.

Accepted Answer

A) Work in Process Inventory;Materials Inventory 
B) Cost of Goods Sold;Finished Goods Inventory 
C) Conversion Costs;Accounts Payable 
D) No entry 
A) Work in Process Inventory;Materials Inventory 
B) Cost of Goods Sold;Finished Goods Inventory 
C) Conversion Costs;Accounts Payable 
D) No entry

Question 19

From the four selections below,identify which are necessary to develop the value chain of a product or service. 
1.Processes $\quad$$\quad$ $\quad$3.Nonvalue-adding activities
2.Departments$\quad$$\quad$  4.Value-adding activities

Accepted Answer

A) 1 and 3 
B) 2 and 4 
C) 1 and 4 
D) 1 and 2 
A) 1 and 3 
B) 2 and 4 
C) 1 and 4 
D) 1 and 2

Question 20

Customer relations are usually part of

Accepted Answer

A) the supply chain. 
B) the value chain. 
C) both the value chain and the supply chain. 
D) neither the value chain nor the supply chain. 
A) the supply chain. 
B) the value chain. 
C) both the value chain and the supply chain. 
D) neither the value chain nor the supply chain.

Exam 18: Value-Based Systems: Activity-Based Costing and Lean Accounting

When using a just-in-time system,what qualities should be a supplier posses?

Which of the following is reduced by a just-in-time operations?

Define activity-based costing.Explain why this approach to cost assignments is superior to the traditional method of using a plantwide overhead cost rate.Will activity-based costing always result in lower product costs? Justify your answer.

The ending balance of the Cost of Goods Sold account will differ in traditional and backflush costing.

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

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

Shifting to a just-in-time approach in a manufacturing environment usually will not require a new approach in evaluating costs.

Which of the four levels of the cost hierarchy would be used by a dress manufacturer using an activity-based management to design a pattern for a new dress style?

A manufacturing chain is a path that leads from the suppliers of the materials from which a product is made to the final customer.

A just-in-time environment has smaller inventories than the traditional manufacturing environment.As a result,

To minimize costs,managers continuously seek to improve processes and activities.

Which of the following is a facility-level cost?

In a just-in-time setting,the time spent reworking defective units is called __________ time.

Value -based systems are information systems that provide customer- related,activity -based information.

Which of the following creates a flexible work cell in a just-in-time manufacturing environment?

Which of the following is a product-level activity cost?

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

In a just-in-time environment using backflush costing,the entry to record the use of materials for the month's production is debit __________ and credit __________.

From the four selections below,identify which are necessary to develop the value chain of a product or service. 1.Processes \quad\quad \quad 3.Nonvalue-adding activities 2.Departments \quad\quad 4.Value-adding activities

Customer relations are usually part of

Uses of Accounting Information and the Financial Statements

Measurement Concepts: Recording Business Transactions

Measuring Business Income: Adjusting the Accounts

Foundations of Financial Reporting and the Classified Balance Sheet

Accounting for Merchandising Operations

Inventories

Cash and Internal Control

Receivables

Long-Term Assets

Current Liabilities and Fair Value Accounting

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting and Cost Concepts

Costing Systems: Job Order Costing

Costing Systems: Process Costing

Cost-Volume-Profit Analysis

The Budgeting Process

Flexible Budgets and Performance Analysis

Standard Costing and Variance Analysis

Short-Run Decision Analysis

Capital Investment Analysis

Pricing Decisions, including Target Costing and Transfer Pricing

Quality Management and Measurement

Accounting for Unincorporated Businesses

Accounting for Investments

Filters

In a just-in-time environment using backflush costing,the entry to record the use of materials for the month's production is debit and credit .

From the four selections below,identify which are necessary to develop the value chain of a product or service. 1.Processes $\quad$ $\quad$ $\quad$ 3.Nonvalue-adding activities 2.Departments $\quad$ $\quad$ 4.Value-adding activities