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

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

Which of the four levels of the cost hierarchy would be used by a ice cream producer using an activity-based management for a production run of a certain quantity of ice cream of vanilla flavor?

A framework for classifying activities according to the level at which their costs are incurred is called a

Full product cost includes both nonproduction costs and production costs required to satisfy customers.

One element of a just-in-time operating environment is pull-through production,which means that a firm starts production of a product only after an order is received.

In a traditional manufacturing environment,both push-through and pull-through methods trigger scheduling of production.

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

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

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

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

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).

The time a product spends waiting to be worked on is called storage time.

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

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

The three inventory accounts used in traditional costing are replaced by two inventory accounts in backflush costing.

Unit level,batch level,and service level are examples of cost drivers.

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.

When using backflush costing,product costs are first accumulated in the __________ account.

Activity-based management and lean operations can be used either together or separately to eliminate waste and manage activities.

Which of the four levels of the cost hierarchy would be used by a dress manufacturer using an activity-based management for the routine maintenance of sewing machines?