Exam 20: Value-Based Systems: Activity-Based Costing and Lean Accounting

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?

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

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 __________.

Which of the following statements is true?

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

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

A just-in-time philosophy seeks to maximize inventories.

Which of the following statements is true of a traditional operating environment?

Which of the following is a facility-level cost?

A just-in-time operating environment requires maintenance of large material and finished goods inventories in order to meet customer demand for products.

Distinguish between push-through and pull-through production methods.How does pull-through production meet the requirements of a just-in-time operating environment?

When managing the production process in a just-in-time environment,the manager's focus is on the quantity of raw material used to produce a product.

Many indirect costs in a traditional system become direct costs in a JIT system.

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

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

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

Maintaining consistent high product quality

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

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

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.