Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

Resser Corporation manufactures serving trays and utensils for use by airlines for meal service.Several airlines order these products in large quantities.Resser had adopted an activity-based management philosophy.Listed below are the principal activities of the company.
   a.Identify activities that are nonvalue-adding.
b.Analyze each of the nonvalue-adding activities and determine which are necessary.Suggest how each of the activities that you classified as unnecessary could be reduced or eliminated.

Accepted Answer

a.The nonvalue-adding activities are pro

Question 3

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 4

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 a line of automobiles sold throughout the world.

Accepted Answer

A) Batch-level activity 
B) Product-level activity 
C) Facility-level activity 
D) Unit-level activity 
A) Batch-level activity 
B) Product-level activity 
C) Facility-level activity 
D) Unit-level activity

Question 5

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 6

Both activity-based management (ABM)and just-in-time (JIT)seek to eliminate or reduce nonvalue-adding activities and to improve the allocation of resources.

Accepted Answer

A) True 
 B)False

Question 7

.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.

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 8

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

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

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 12

The value chain is also called the supply chain.

Accepted Answer

A) True 
 B)False

Question 13

Hugley Corp.recently installed three just-in-time work areas in its blank key-making division.The work areas will make large quantities of identical key blanks for door lock manufacturers.Select the best answer for how Hugley should run its business and account for product costs.

Accepted Answer

A) Backflush costing 
B) ABC 
C) JIT and ABM 
D) ABC and backflush costing 
A) Backflush costing 
B) ABC 
C) JIT and ABM 
D) ABC and backflush costing

Question 14

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 15

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

Accepted Answer

A) True 
 B)False

Question 16

Activity-based management includes all of the following except identifying

Accepted Answer

A) the level of customer satisfaction with a product or service. 
B) the resources that are consumed by each activity. 
C) activities as value-adding. 
D) how resources are consumed by each activity. 
A) the level of customer satisfaction with a product or service. 
B) the resources that are consumed by each activity. 
C) activities as value-adding. 
D) how resources are consumed by each activity.

Question 17

The JIT operating philosophy requires a push-through production system.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

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 20

Which of the following is included in full product cost?

Accepted Answer

A) All direct labor and direct material costs and all production and nonproduction costs. 
B) Only nonproduction costs. 
C) Only the costs of direct material. 
D) Only the costs of direct labor. 
A) All direct labor and direct material costs and all production and nonproduction costs. 
B) Only nonproduction costs. 
C) Only the costs of direct material. 
D) Only the costs of direct labor.

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

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

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

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 a line of automobiles sold throughout the world.

Both activity-based management (ABM)and just-in-time (JIT)seek to eliminate or reduce nonvalue-adding activities and to improve the allocation of resources.

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

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

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

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

The value chain is also called the supply chain.

Hugley Corp.recently installed three just-in-time work areas in its blank key-making division.The work areas will make large quantities of identical key blanks for door lock manufacturers.Select the best answer for how Hugley should run its business and account for product costs.

Which of the following is a unit-level activity?

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

Activity-based management includes all of the following except identifying

The JIT operating philosophy requires a push-through production system.

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

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

Which of the following is included in full product cost?

Accounting Principles and the Financial Statements

Analyzing and Recording Business Transactions

Adjusting the Accounts

Completing the Accounting Cycle

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

Accounting for Partnerships

Accounting for Corporations

Long Term Liabilities

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 and Capital Budgeting

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