Question 1

Value-added and non-value-added activities
Explain the distinction between value-added and non-value added activities. Provide an example of each.

Accepted Answer

Value added activities enhance a product's or a service's desirability from the point of view of the consumer, while non-value added activities do nothing to increase the desirability in the consumer's view. Storage, handling, and inspection all represent non-value-added activities, while assembly and finishing a product are value-added activities.

Question 2

During which element of manufacturing cycle time is value added to products?

Accepted Answer

A)  Storage and waiting time. 
B)  Processing time. 
C)  Movement time. 
D)  Inspection time. 
A)  Storage and waiting time. 
B)  Processing time. 
C)  Movement time. 
D)  Inspection time. B

Question 3

Productivity is often measured by comparing inputs and outputs.

Accepted Answer

A) True 
 B)False  True

Question 4

Four categories of costs associated with product quality are:

Accepted Answer

A)  External failure, internal failure, prevention, and carrying. 
B)  External failure, internal failure, prevention, and appraisal. 
C)  External failure, internal failure, training, and appraisal. 
D)  Warranty, product liability, prevention, and training. 
A)  External failure, internal failure, prevention, and carrying. 
B)  External failure, internal failure, prevention, and appraisal. 
C)  External failure, internal failure, training, and appraisal. 
D)  Warranty, product liability, prevention, and training.

Question 5

JIT manufacturing
Briefly explain the nature and goals of a JIT manufacturing system.

Accepted Answer

In a JIT system, materials are acquired

Question 6

Cycle time is the length of time required for a product to pass completely though inspection.

Accepted Answer

A) True 
 B)False

Question 7

Target costing
Ray-Dee, Inc. is considering the introduction of a new deluxe quality stereo tabletop radio. This radio will produce exceptional sound quality through new speaker technology. Market research indicates that customers would be willing to pay $400 for a radio of the quality considered. Ray-Dee requires a 30% return on sales for all its products.
Required: Compute Ray-Dee's target cost for the radio under consideration.

Accepted Answer

The answer of Target costing
Ray-Dee, Inc. is considering the introduction...

Question 8

The just-in-time manufacturing system:

Accepted Answer

A)  Contrasts with the supply push system. 
B)  Complements the supply push systems. 
C)  Neither complements nor contrasts with the supply push system. 
D)  Contrasts the demand pull system. 
A)  Contrasts with the supply push system. 
B)  Complements the supply push systems. 
C)  Neither complements nor contrasts with the supply push system. 
D)  Contrasts the demand pull system.

Question 9

Which of the following would not be classified as an external failure cost?

Accepted Answer

A)  Extra shipping charges incurred to rush a customer an order that was delayed for rework. 
B)  Costs incurred for a product recall. 
C)  The cost of product liability insurance. 
D)  The cost of maintaining a customer complaint hotline. 
A)  Extra shipping charges incurred to rush a customer an order that was delayed for rework. 
B)  Costs incurred for a product recall. 
C)  The cost of product liability insurance. 
D)  The cost of maintaining a customer complaint hotline.

Question 10

Which of the following is not commonly used to measure product quality in a just-in-time system?

Accepted Answer

A)  Defects per million. 
B)  Merchandise returns. 
C)  Manufacturing efficiency ratio. 
D)  Warranty claims. 
A)  Defects per million. 
B)  Merchandise returns. 
C)  Manufacturing efficiency ratio. 
D)  Warranty claims.

Question 11

Total quality management centers on new product and service development as opposed to managing the value chain for existing products.

Accepted Answer

A) True 
 B)False

Question 12

Which activities might be reduced or eliminated should Efficient implement a JIT system?

Accepted Answer

Receiving materials,

Question 13

The cost borne by the customer of disposing of nickel-cadmium batteries is a component of the batteries':

Accepted Answer

A)  Life-cycle cost. 
B)  Overhead cost. 
C)  Cost of quality. 
D)  Direct production cost. 
A)  Life-cycle cost. 
B)  Overhead cost. 
C)  Cost of quality. 
D)  Direct production cost.

Question 14

Cost of quality
Name four components of the cost of quality and list three examples of each.

Accepted Answer

The answer of Cost of quality
Name four components of the...

Question 15

If Summit Products requires a 25% return on sales to undertake production, what is the target cost for the new widget?

Accepted Answer

A)  $65.00. 
B)  $67.50. 
C)  $80. 
D)  Some other amount. 
A)  $65.00. 
B)  $67.50. 
C)  $80. 
D)  Some other amount.

Question 16

Cycle time includes:

Accepted Answer

A)  Processing time, storage and waiting time, movement time, and inspection time. 
B)  Processing time, inspection time, and inventory time. 
C)  Processing time, storage and waiting time, finishing time, and selling time. 
D)  Processing time, storage and waiting time, movement time, and finishing time. 
A)  Processing time, storage and waiting time, movement time, and inspection time. 
B)  Processing time, inspection time, and inventory time. 
C)  Processing time, storage and waiting time, finishing time, and selling time. 
D)  Processing time, storage and waiting time, movement time, and finishing time.

Question 17

Of the following components of total quality cost, which is most damaging to a company attempting to achieve a reputation as a world-class manufacturer?

Accepted Answer

A)  Prevention costs. 
B)  Appraisal costs. 
C)  Internal failure costs. 
D)  External failure costs. 
A)  Prevention costs. 
B)  Appraisal costs. 
C)  Internal failure costs. 
D)  External failure costs.

Question 18

External failure costs include:

Accepted Answer

A)  Inspections of materials. 
B)  Training. 
C)  Rework. 
D)  Warranty costs. 
A)  Inspections of materials. 
B)  Training. 
C)  Rework. 
D)  Warranty costs.

Question 19

Resourceful's value-adding production activities include:

Accepted Answer

Cutting materials, A

Question 20

Non-value-added activities do not add to a product's desirability from the customer's perspective.

Accepted Answer

A) True 
 B)False

Exam 19: Costing and the Value Chain

Value-added and non-value-added activities Explain the distinction between value-added and non-value added activities. Provide an example of each.

During which element of manufacturing cycle time is value added to products?

Productivity is often measured by comparing inputs and outputs.

Four categories of costs associated with product quality are:

JIT manufacturing Briefly explain the nature and goals of a JIT manufacturing system.

Cycle time is the length of time required for a product to pass completely though inspection.

The just-in-time manufacturing system:

Which of the following would not be classified as an external failure cost?

Which of the following is not commonly used to measure product quality in a just-in-time system?

Total quality management centers on new product and service development as opposed to managing the value chain for existing products.

Which activities might be reduced or eliminated should Efficient implement a JIT system?

The cost borne by the customer of disposing of nickel-cadmium batteries is a component of the batteries':

Cost of quality Name four components of the cost of quality and list three examples of each.

If Summit Products requires a 25% return on sales to undertake production, what is the target cost for the new widget?

Cycle time includes:

Of the following components of total quality cost, which is most damaging to a company attempting to achieve a reputation as a world-class manufacturer?

External failure costs include:

Resourceful's value-adding production activities include:

Non-value-added activities do not add to a product's desirability from the customer's perspective.

Accounting: Information for Decision Making

Basic Financial Statements

The Accounting Cycle: Capturing Economic Events

The Accounting Cycle: Accruals and Deferrals

The Accounting Cycle: Reporting Financial Results

Merchandising Activities

Financial Assets

Inventories and the Cost of Goods Sold

Plant and Intangible Assets

Liabilities

Stockholders Equity: Paid-In Capital

Income and Changes in Retained Earnings

Statement of Cash Flows

Financial Statement Analysis

Global Business and Accounting

Management Accounting: a Business Partner

Job Order Cost Systems and Overhead Allocations

Process Costing

Cost-Volume-Profit Analysis

Incremental Analysis

Responsibility Accounting and Transfer Pricing

Operational Budgeting

Standard Cost Systems

Rewarding Business Performance

Capital Budgeting

Forms of Business Organization

The Time Value of Money: Future Amounts and Present Values Answer Key

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