Question 1

Backflush costing eliminates the use of a Work in process account.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is a unit-level activity?

Accepted Answer

A) Redesigning the process 
B) Setting up the production process 
C) Purchase of raw materials 
D) Insuring the factory 
A) Redesigning the process 
B) Setting up the production process 
C) Purchase of raw materials 
D) Insuring the factory

Question 3

In the JIT environment,direct materials and conversion costs will vary significantly for each product in a work cell.

Accepted Answer

A) True 
 B)False

Question 4

A non value-adding activity is one that adds cost to a product or service but does not increase its market value.

Accepted Answer

A) True 
 B)False

Question 5

Storage time is the time a product spends waiting to be worked on once it arrives at the next operation.

Accepted Answer

A) True 
 B)False

Question 6

The value chain is also called the supply chain.

Accepted Answer

A) True 
 B)False

Question 7

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 8

What would a company using an activity-based management approach attempt to do in regard to activities that add value to the product and those that do not?

Accepted Answer

Companies employing the activity-based m

Question 9

A bill of activities will complicate the estimation of profits of a company.

Accepted Answer

A) True 
 B)False

Question 10

The JIT operating philosophy must be adopted by everyone in a company before its total benefits can be realized.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is an example of a nonvalue-adding activity?

Accepted Answer

A) Product distribution activity 
B) Customer service activity 
C) Data processing activity 
D) Product design activity 
A) Product distribution activity 
B) Customer service activity 
C) Data processing activity 
D) Product design activity

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is the major objective of the just-in-time operating environment?

Accepted Answer

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

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

One of the drawbacks of full product cost is that it is relevant only for companies providing services.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following statements contradicts the philosophy underlying the just-in-time operating environment?

Accepted Answer

A) The work force must become multiskilled in order to operate different machines and perform other tasks in the work cell. 
B) A customer order triggers the purchase of materials and the activation of the production process. 
C) Large inventories are maintained in order to fulfill customer orders on a timely basis. 
D) Flexible work cells are created to increase productivity. 
A) The work force must become multiskilled in order to operate different machines and perform other tasks in the work cell. 
B) A customer order triggers the purchase of materials and the activation of the production process. 
C) Large inventories are maintained in order to fulfill customer orders on a timely basis. 
D) Flexible work cells are created to increase productivity.

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is not a concern when managing inventory in a just-in-time environment?

Accepted Answer

A) Reduction of space needed to store inventory 
B) Inventory turnover 
C) Labor cost 
D) Inventory size reduction 
A) Reduction of space needed to store inventory 
B) Inventory turnover 
C) Labor cost 
D) Inventory size reduction

Question 19

Product storage time refers to the amount of time that a product spends in a production cell.

Accepted Answer

A) True 
 B)False

Question 20

Insuring a factory is classified as a(n)__________-level activity in an activity-based costing system.

Accepted Answer

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

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

Backflush costing eliminates the use of a Work in process account.

Which of the following is a unit-level activity?

In the JIT environment,direct materials and conversion costs will vary significantly for each product in a work cell.

A non value-adding activity is one that adds cost to a product or service but does not increase its market value.

Storage time is the time a product spends waiting to be worked on once it arrives at the next operation.

The value chain is also called the supply chain.

What would a company using an activity-based management approach attempt to do in regard to activities that add value to the product and those that do not?

A bill of activities will complicate the estimation of profits of a company.

The JIT operating philosophy must be adopted by everyone in a company before its total benefits can be realized.

Which of the following is an example of a nonvalue-adding activity?

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

Which of the following is the major objective of the just-in-time operating environment?

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

One of the drawbacks of full product cost is that it is relevant only for companies providing services.

Which of the following statements contradicts the philosophy underlying the just-in-time operating environment?

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

Which of the following is not a concern when managing inventory in a just-in-time environment?

Product storage time refers to the amount of time that a product spends in a production cell.

Insuring a factory is classified as a(n)__________-level activity in an activity-based costing system.

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

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