Question 1

For a company offering services,which of the following is a value-adding activity?

Accepted Answer

A) Billing the clients 
B) Preparing job order forms 
C) Ordering,receiving,and inspecting supplies 
D) Designing advertisements 
A) Billing the clients 
B) Preparing job order forms 
C) Ordering,receiving,and inspecting supplies 
D) Designing advertisements

Question 2

.Johnson Products Company is in the process of adopting the just-in-time operating philosophy for its idol-making operations.Indicate which of the following overhead costs is a nonvalue-adding cost (NVA).

Accepted Answer

A) Machine electricity 
B) Machine repairs 
C) Depreciation of the machine used 
D) Machine setup labor 
A) Machine electricity 
B) Machine repairs 
C) Depreciation of the machine used 
D) Machine setup labor

Question 3

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

Accepted Answer

A) machine hours. 
B) push-through time. 
C) throughput time. 
D) indirect costs. 
A) machine hours. 
B) push-through time. 
C) throughput time. 
D) indirect costs.

Question 4

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

Accepted Answer

A) bill of activities. 
B) full product cost. 
C) value chain. 
D) cost hierarchy. 
A) bill of activities. 
B) full product cost. 
C) value chain. 
D) cost hierarchy.

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

Last year,Amanda Jones opened an ice cream parlor in a busy shopping center.She spent a lot on advertising and attracted many customers into the store,but a few customers made turned up and sales were declining.Amanda paid attention to questions and requests made by customers and determined that they often requested items that were within the scope of her business but that she did not carry.When she offered to order items for her customers,delivery was usually too late and,yet again,sales were lost.What measures should Amanda take to improve her business?

Accepted Answer

Amanda has learned that valuing customer

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

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 10

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

Accepted Answer

A) True 
 B)False

Question 11

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.

Accepted Answer

A) True 
 B)False

Question 12

For a bank,a credit check of a loan applicant is an example of a batch-level activity.

Accepted Answer

A) True 
 B)False

Question 13

Explain how a just-in-time operating philosophy reduces the time it takes to complete the production of a product.Include in your answer the classifications of time that are affected.How does such a change help to reduce product costs?

Accepted Answer

The basic ingredient in the just-in-time

Question 14

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

Accepted Answer

Activity-based systems are information s

Question 15

The just-in-time operating environment typically is characterized by a large number of non-value-adding activities.

Accepted Answer

A) True 
 B)False

Question 16

A goal of the process value analysis (PVA)is to reduce nonvalue-adding activities.Outline a procedure a company could use to accomplish this goal.

Accepted Answer

PVA details each step in the process fro

Question 17

A just-in-time environment has smaller inventories than the traditional manufacturing environment.As a result,

Accepted Answer

A) larger production lot sizes are the rule,in order to realize the cost-effectiveness of long production runs. 
B) the amount of working capital required for inventory typically increases. 
C) the just-in-time environment experiences a lower inventory turnover than the traditional environment. 
D) the just-in-time environment typically experiences a higher inventory turnover than the traditional environment. 
A) larger production lot sizes are the rule,in order to realize the cost-effectiveness of long production runs. 
B) the amount of working capital required for inventory typically increases. 
C) the just-in-time environment experiences a lower inventory turnover than the traditional environment. 
D) the just-in-time environment typically experiences a higher inventory turnover than the traditional environment.

Question 18

Which of the following statements is true of nonvalue-adding activities?

Accepted Answer

A) They are unnecessary activities. 
B) They are included in the value chain of activities. 
C) They are wasteful and targeted for elimination. 
D) They add cost to a product or service but does not increase its market value. 
A) They are unnecessary activities. 
B) They are included in the value chain of activities. 
C) They are wasteful and targeted for elimination. 
D) They add cost to a product or service but does not increase its market value.

Question 19

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

Accepted Answer

A) total processing time per unit. 
B) allocating overhead more accurately. 
C) reducing inventories. 
D) units produced per direct labor hour. 
A) total processing time per unit. 
B) allocating overhead more accurately. 
C) reducing inventories. 
D) units produced per direct labor hour.

Question 20

Traditional costing and backflush costing provide the same ending balances only when there is little or no ending inventory.

Accepted Answer

A) True 
 B)False

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

For a company offering services,which of the following is a value-adding activity?

.Johnson Products Company is in the process of adopting the just-in-time operating philosophy for its idol-making operations.Indicate which of the following overhead costs is a nonvalue-adding cost (NVA).

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

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

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

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

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

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

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

For a bank,a credit check of a loan applicant is an example of a batch-level activity.

Explain how a just-in-time operating philosophy reduces the time it takes to complete the production of a product.Include in your answer the classifications of time that are affected.How does such a change help to reduce product costs?

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

The just-in-time operating environment typically is characterized by a large number of non-value-adding activities.

A goal of the process value analysis (PVA)is to reduce nonvalue-adding activities.Outline a procedure a company could use to accomplish this goal.

A just-in-time environment has smaller inventories than the traditional manufacturing environment.As a result,

Which of the following statements is true of nonvalue-adding activities?

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

Traditional costing and backflush costing provide the same ending balances only when there is little or no ending inventory.

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

Filters