Question 1

Which of the following is not a prevention cost?

Accepted Answer

A) Training costs 
B) Warranty costs 
C) Maintenance costs 
D) Quality planning costs 
A) Training costs 
B) Warranty costs 
C) Maintenance costs 
D) Quality planning costs

Question 2

Which of the following elements in a product's cycle time should be maximized?

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.

Question 3

Pool-Glow,Inc.has developed a new light for lighting swimming pools.After doing market research,it has determined that customers would be willing to pay $140 for this light.Pool-Glow seeks to earn 25% profit on the light.At present,Pool-Glow makes an old style light for $101.25,which sells for $130.
(1. )What must the target cost be in order to earn the 25% profit that the company demands?
(2. )If Pool-Glow can adjust its costs to the target cost,the company estimates that it can sell 50,000 lights.What would Pool-Glow's profit be at this point?
(3. )How many of the old style lights would have to be sold to reach the same profit?

Accepted Answer

(1)$140 × 0.25 = $35 = profit;Target cos

Question 4

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

Question 5

Accounting terminology
Listed below are eight technical accounting terms introduced or emphasized in this chapter:   Each of the following statements may (or may not)describe one of these technical terms.In the space provided below each statement,indicate the accounting term described,or answer "None" if the statement does not correctly describe any of the terms.
________ (a)The process of using activity-based costs to help reduce or eliminate non-value-added activities.
________ (b)Can be eliminated without affecting the desirability of the product from the perspective of the customer
________ (c)The length of time for a product to pass completely through a specific manufacturing process.
________ (d)If eliminated,the desirability of the product to consumers is decreased.
________ (e)Consideration of all potential resources that will be consumed by a product from development through disposal.
________ (f)A method in which a product's cost is determined by subtracting a fixed profit margin from its selling price.
________ (g)An approach that explicitly monitors quality costs and rewards quality enhancing behavior.

Accepted Answer

(a)Activity-based management (

Question 6

External failure costs include:

Accepted Answer

A) Inspections of materials. 
B) Training. 
C) Rework. 
D) Repairs. 
A) Inspections of materials. 
B) Training. 
C) Rework. 
D) Repairs.

Question 7

Activities that increase scrap and rework tend to increase productivity.

Accepted Answer

A) True 
 B)False

Question 8

Quality costs do not include:

Accepted Answer

A) Costs to prevent poor quality from occurring. 
B) Costs of appraising and inspecting the product. 
C) Costs to correct problems before the customer receives the goods. 
D) Advertising costs. 
A) Costs to prevent poor quality from occurring. 
B) Costs of appraising and inspecting the product. 
C) Costs to correct problems before the customer receives the goods. 
D) Advertising costs.

Question 9

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 10

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

Accepted Answer

A) True 
 B)False

Question 11

Internal failure costs happen when an unsatisfactory good or service is delivered to a customer.

Accepted Answer

A) True 
 B)False

Question 12

The following are all characteristics of target costing except:

Accepted Answer

A) Understanding the pricing process in order to increase selling prices. 
B) Driving costs down while satisfying customer needs. 
C) Emphasizing the product's functional characteristics and their importance to the customer. 
D) Reducing development time. 
A) Understanding the pricing process in order to increase selling prices. 
B) Driving costs down while satisfying customer needs. 
C) Emphasizing the product's functional characteristics and their importance to the customer. 
D) Reducing development time.

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

The primary objective of activity-based management is:

Accepted Answer

A) To develop more accurate product costs. 
B) To reduce and eliminate non-value added activities. 
C) To increase product quality. 
D) To identify instances of internal failure. 
A) To develop more accurate product costs. 
B) To reduce and eliminate non-value added activities. 
C) To increase product quality. 
D) To identify instances of internal failure.

Question 15

JIT systems' manufacturing efficiency ratio
Methodical Corporation is considering the implementation of a JIT inventory system.The company recently analyzed its cycle time to determine the average number of days spent in each activity of its production process.A summary of the analysis is shown below:   (a)Methodical's value-added production activities include: ________
(b)Methodical's total cycle time is ________ days.
(c)Methodical's manufacturing efficiency ratio is ________%.
(d)Which activities might be reduced or eliminated should Methodical implement a JIT system?

Accepted Answer

(a)Cutting,Assembling,Painting,and Packa

Question 16

[The following information applies to the questions displayed below.]
The Abrams Corporation incurred the following quality costs for the year ending December 31,2018:
  
-What are the total appraisal 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 17

Techniques to manage costs in the value chain include all of the following except:

Accepted Answer

A) Activity based management. 
B) Target costing. 
C) Process costing. 
D) Total quality management. 
A) Activity based management. 
B) Target costing. 
C) Process costing. 
D) Total quality management.

Question 18

Rather than aiming to produce inventory,just-in-time inventory systems attempt to pull production according to customer demand.

Accepted Answer

A) True 
 B)False

Question 19

Activities related to internal failure such as rework,scrap,and engineering change orders are value-added activities since they cannot be eliminated without increasing costs elsewhere in the value chain.

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

A) True 
 B)False

Exam 19: Costing and the Value Chain

Which of the following is not a prevention cost?

Which of the following elements in a product's cycle time should be maximized?

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

External failure costs include:

Activities that increase scrap and rework tend to increase productivity.

Quality costs do not include:

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

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

Internal failure costs happen when an unsatisfactory good or service is delivered to a customer.

The following are all characteristics of target costing except:

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

The primary objective of activity-based management is:

[The following information applies to the questions displayed below.] The Abrams Corporation incurred the following quality costs for the year ending December 31,2018: -What are the total appraisal costs for the Abrams Corporation?

Techniques to manage costs in the value chain include all of the following except:

Rather than aiming to produce inventory,just-in-time inventory systems attempt to pull production according to customer demand.

Activities related to internal failure such as rework,scrap,and engineering change orders are value-added activities since they cannot be eliminated without increasing costs elsewhere in the value chain.

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

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

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

the Time Value of Money: Future Amounts and Present Values

Forms of Business Organization

Filters