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

Lean uses ABC to assign overhead costs to the product by using appropriate cost drivers.

Which of the following statements is incorrect in comparing activity-based management (ABM)and lean operations?

Why is process value analysis not part of the general ledger accounting system?

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

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

The value chain is the sequence of business activities in which usefulness is added to the products or the services within an organization.

For work done during August,Footprints Company incurred direct materials costs of $104,000 and conversion costs of $260,000.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 $1,080 of costs,and the ending balance of the Finished Goods Inventory account was $1,220.There were no beginning inventory balances. -Using the information provided for Footprints Company,what is the cost of completed units for August?

When managing inventory in a just-in-time environment,the need of controlling workers does not exists.

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

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

In moving toward the just-in-time continuous work flow concept,a key objective is the reduction in the use of raw materials for manufacturing a product.

The value chain analysis allows a company to focus on its core competencies.

Backflush costing aims at reducing waste in the

In order for a manager to reduce throughput time,it is necessary for the accounting system to focus on calculating units produced per direct labor hour.

.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 unique luxury automobiles.

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

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

For work done during August,Footprints Company incurred direct materials costs of $104,000 and conversion costs of $260,000.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 $1,080 of costs,and the ending balance of the Finished Goods Inventory account was $1,220.There were no beginning inventory balances. -Using the information provided for Footprints Company,what was the ending balance of the Cost of Goods Sold account for August?

A just-in-time operation would attempt to eliminate inspection time.

In a just-in-time environment,managing the production process focuses on