Question 1

Examples of value-added activities include all of the following except:

Accepted Answer

A)  Product design. 
B)  Assembly activities. 
C)  Machinery set-up activities. 
D)  Establishing efficient distribution channels. 
A)  Product design. 
B)  Assembly activities. 
C)  Machinery set-up activities. 
D)  Establishing efficient distribution channels.

Question 2

At a price of $80, Summit's market research indicates that it can sell 60,000 units per year. Assuming Summit can reach its new target cost, how will Summit's profit at the $80 price compare to what it would have earned in the absence of the competitor's product?

Accepted Answer

A)  Profit will be $75,000 higher. 
B)  Profit will be $75,000 lower. 
C)  Profit will be unaffected if Summit can reach the revised target cost. 
D)  None of the above. 
A)  Profit will be $75,000 higher. 
B)  Profit will be $75,000 lower. 
C)  Profit will be unaffected if Summit can reach the revised target cost. 
D)  None of the above.

Question 3

The manufacturing efficiency ratio equals:

Accepted Answer

A)  Value-added time divided by cycle time. 
B)  Value-added time multiplied by cycle time. 
C)  Cycle time divided by value-added time. 
D)  (Cycle time divided by value-added time) divided by 2. 
A)  Value-added time divided by cycle time. 
B)  Value-added time multiplied by cycle time. 
C)  Cycle time divided by value-added time. 
D)  (Cycle time divided by value-added time) divided by 2.

Question 4

What are the total internal failure costs for the Abrams Corporation?

Accepted Answer

A)  $38,300. 
B)  $34,500. 
C)  $19,700. 
D)  $35,250. 
A)  $38,300. 
B)  $34,500. 
C)  $19,700. 
D)  $35,250.

Question 5

The basic approach of just-in-time costing is to try to eliminate inefficiency and to improve product quality.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following activities performed by a manufacturer of roller blades is not a value-added activity?

Accepted Answer

A)  Inspection of direct materials upon receipt from suppliers. 
B)  Storage of direct materials until needed for production. 
C)  Transfer of direct materials to appropriate points on the assembly line. 
D)  Estimated lost sales due to poor quality. 
A)  Inspection of direct materials upon receipt from suppliers. 
B)  Storage of direct materials until needed for production. 
C)  Transfer of direct materials to appropriate points on the assembly line. 
D)  Estimated lost sales due to poor quality.

Question 7

A just-in-time manufacturing system is also known as a supply push system.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following would be considered non-value-added activities by a bakery's bread customers?

Accepted Answer

A)  The mixing of flour, eggs, milk and other ingredients. 
B)  Baking the bread. 
C)  Shipping the loaves to a warehouse to await distribution to local stores. 
D)  Delivering loaves to local stores. 
E)  Rotating bread stock in the stores so that older loaves are sold first. 
A)  The mixing of flour, eggs, milk and other ingredients. 
B)  Baking the bread. 
C)  Shipping the loaves to a warehouse to await distribution to local stores. 
D)  Delivering loaves to local stores. 
E)  Rotating bread stock in the stores so that older loaves are sold first.

Question 9

JIT inventory systems strive to:

Accepted Answer

A)  Cultivate long-term relationships with a select group of reliable suppliers. 
B)  Keep inventories at minimal levels. 
C)  Improve overall product quality. 
D)  All of the above. 
A)  Cultivate long-term relationships with a select group of reliable suppliers. 
B)  Keep inventories at minimal levels. 
C)  Improve overall product quality. 
D)  All of the above.

Question 10

Non-value-added activities do not directly increase the worth of a product to a customer.

Accepted Answer

A) True 
 B)False

Question 11

Just-in-time manufacturing systems are also known as:

Accepted Answer

A)  Supply push systems. 
B)  Supply pull systems. 
C)  Demand push systems. 
D)  Demand pull systems. 
A)  Supply push systems. 
B)  Supply pull systems. 
C)  Demand push systems. 
D)  Demand pull systems.

Question 12

Which one of the following is not one of the basic procedures related to activity-based costing?

Accepted Answer

A)  Identify the activity. 
B)  Create an associated activity cost pool. 
C)  Compute internal failure costs. 
D)  Calculate the cost per unit of activity. 
A)  Identify the activity. 
B)  Create an associated activity cost pool. 
C)  Compute internal failure costs. 
D)  Calculate the cost per unit of activity.

Question 13

The suppliers and production component of the value chain would include all of the following costs except:

Accepted Answer

A)  Direct production labor. 
B)  Production set-up. 
C)  Salaries for sales personnel. 
D)  Receipt of direct materials from suppliers. 
A)  Direct production labor. 
B)  Production set-up. 
C)  Salaries for sales personnel. 
D)  Receipt of direct materials from suppliers.

Question 14

Just-in-time inventory systems are characterized by extremely large inventories of materials, work in process, and finished goods.

Accepted Answer

A) True 
 B)False

Question 15

If eliminated, the desirability of the product to consumers is decreased. ________________________________

Accepted Answer

Value-adde

Question 16

The length of time for a product to pass completely through a specific manufacturing process. ________________________________

Accepted Answer

The answer of The length of time for a product...

Question 17

Just-in-time manufacturing
Candycane Co. is trying to determine how long it takes for one of its products to pass through the production process. The following information was assembled regarding how many days the product spends in various production activities:
$$\begin{array} { | l | c | } 
\hline \text { Activity } & \text { Number of days } \
\hline \text { Inspection } & 12 \
\hline \text { Storage } & 14 \
\hline \text { Assembly } & 8 \
\hline \text { Handling } & 6 \
\hline \text { Painting } & 8 \
\hline \text { Packaging } & 4 \
\hline
\end{array}$$
(a) Which of the above activities are value-added activities?
(b) What is Candycane's total cycle time?
(c) Determine Candycane's manufacturing efficiency ratio.

Accepted Answer

(a) Value added activities include: Asse

Question 18

Which of the following is a value-added activity by a manufacturer of chocolate candies?

Accepted Answer

A)  The addition of chocolate syrup into the candy mix. 
B)  Hiring production workers. 
C)  Storing the candy bars until they are distributed to stores. 
D)  Managing the cost of electricity by the production department. 
A)  The addition of chocolate syrup into the candy mix. 
B)  Hiring production workers. 
C)  Storing the candy bars until they are distributed to stores. 
D)  Managing the cost of electricity by the production department.

Question 19

Examples of value-added activities include all of the following except:

Accepted Answer

A)  Product design. 
B)  Material movement. 
C)  Assembly activities. 
D)  Establish an effective distribution network. 
A)  Product design. 
B)  Material movement. 
C)  Assembly activities. 
D)  Establish an effective distribution network.

Question 20

Components of the total cost of quality
Explain how it is possible to reduce the total cost of quality by increasing the amount spent on prevention and appraisal activities.

Accepted Answer

Investments in appraisal and prevention

Exam 19: Costing and the Value Chain

Examples of value-added activities include all of the following except:

At a price of $80, Summit's market research indicates that it can sell 60,000 units per year. Assuming Summit can reach its new target cost, how will Summit's profit at the $80 price compare to what it would have earned in the absence of the competitor's product?

The manufacturing efficiency ratio equals:

What are the total internal failure costs for the Abrams Corporation?

The basic approach of just-in-time costing is to try to eliminate inefficiency and to improve product quality.

Which of the following activities performed by a manufacturer of roller blades is not a value-added activity?

A just-in-time manufacturing system is also known as a supply push system.

Which of the following would be considered non-value-added activities by a bakery's bread customers?

JIT inventory systems strive to:

Non-value-added activities do not directly increase the worth of a product to a customer.

Just-in-time manufacturing systems are also known as:

Which one of the following is not one of the basic procedures related to activity-based costing?

The suppliers and production component of the value chain would include all of the following costs except:

Just-in-time inventory systems are characterized by extremely large inventories of materials, work in process, and finished goods.

If eliminated, the desirability of the product to consumers is decreased. ________________________________

The length of time for a product to pass completely through a specific manufacturing process. ________________________________

Which of the following is a value-added activity by a manufacturer of chocolate candies?

Examples of value-added activities include all of the following except:

Components of the total cost of quality Explain how it is possible to reduce the total cost of quality by increasing the amount spent on prevention and appraisal activities.

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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