Chat with AIExam 1: Cost Accounting: Information for Decision Making
The approaches and activities of managers in short-run and long-run planning and control decisions that increase value for customers and lower costs of products and services are known as:
(84) 
VerifiedA
Traditionally, companies in the United States have employed a "push" manufacturing style. Studies in Activity Based Management and Quality Control have indicated that this approach is filled with many nonvalue-added activities, which increase overall costs and reduce profits. The "push" style is being replaced with a "pull" approach.
Briefly describe the major differences between the push and pull approaches. What nonvalue-added activities are eliminated in a pull manufacturing system?
(85) VerifiedA push manufacturer begins by forecasting total orders for a time period. The manufacturer orders materials based on the forecast. Production schedules are produced based on the forecast. Production is then "pushed" through. Because production is based on sales, the company may end up producing units for which there is not as much demand as forecasted or have too few units available of a product for which there is heavy demand. This creates costs of storing excess inventory and opportunity cost of lost sales. In addition, because units are pushed through the system, the timing of receiving materials is not balanced to the production of activities, particularly at production bottlenecks, which results in a wasteful buildup of inventories, either temporary or permanent. Push production can reduce motivation to improve quality and can reinforce motivation to overuse non-bottleneck activities.
A pull manufacturer "pulls" production through the process by customer orders, rather than "pushes" them through with master production schedules. A sales order triggers a production order. The production order triggers orders to suppliers, who ship parts immediately. The Just-in-Time approach is flexible to customer needs and requires lower inventory costs than traditional methods. Because suppliers tend to be preapproved and more reliable, costs of quality are reduced. Nonvalue-added activities such as storage, quality control, downtime, waiting time are avoided in a pull manufacturing system.
Having one or more of the firm's activities performed by another firm or individual in the supply or distribution chain is called:
(65) VerifiedD
All of the following are examples of total quality management (TQM) practices except:
(93) The individual who would most likely use only financial accounting information in making decisions is a:
(86) Morgantown Manufacturing produces electronic storage devices and uses the following three-part classification for its manufacturing costs: materials, labor, and support costs. Total support costs for June were $300 million and were allocated to each product on the basis of labor costs of each line. Summary data (in millions) for June for the most popular electronic storage device, the Giant Watt, was:
Material costs \ 9,000,00 Labor costs \ 3,000,00 Support costs \ 8,500,00 Units produced 40,000
a. Compute the manufacturing cost per unit for each Giant Watt produced in June.
b. Suppose production will be reduced to 30,000 units in July. Speculate as to whether the unit costs in July will most likely be higher or lower than unit costs in June; it is not necessary to calculate the exact July unit cost. Briefly explain your reasoning.
(73) Advertising costs would be associated with which of the following value chain components?
(87) According to the IMA Code of Ethics, what should a management accountant do if a significant ethical situation can't be resolved?
(83) A cost can be considered a differential cost for one particular course of action but not for another course of action.
(79) The costing method that first assigns costs to activities and then assigns them to products based on the products' consumption of activities is called:
(81) Which of the following activities would not be considered a value-added activity?
(95) The field of accounting that reports according to generally accepted accounting principles (GAAP) is called:
(69) Managers are usually responsible for the revenues needed to achieve the targets set during the budgeting process, but not the resources consumed to achieve those targets.
(72) Under the value chain concept, value-added activities are those that firms perform and that customers perceive as adding utility to the goods they purchase.
(79) Place the letter of the appropriate element of an organization's value chain in Column 2 in the blank next to each operation in Column 1.
(77) When comparing activity-based costing (ABC) with conventional costing methods, which of the following is the key benefit of the ABC method?
(73) A restaurant is deciding whether it wants to update its image or not. It currently has a cozy appeal with an outdated décor that is still in good condition, menus and carpet that need to be replaced anyway, and loyal customers. Identify the following for the restaurant management:
a. Costs that are relevant to this decision.
b. Costs that would not be differential to this decision.
c. Any qualitative factors that should be considered.
(67) The value chain is comprised of the activities that take place only during the production process.
(73) Systems that allow firms to target profitable customers by assessing customer revenue and costs are called:
(85) The list of representative cost drivers in the right column below are randomized with respect to the list of functions in the left column. That is, they do not match.
Required:
Match each business function with its representative cost driver.
Function Insert letter d appropriate driver (A through F) 1. Purchasing 2. Billing 3. Shipping 4. Cormputer Support 5. Personnel 6. Customer Service
Required:
Match each business function with its representative cost driver.
Function Insert letter d appropriate driver (A through F) 1. Purchasing 2. Billing 3. Shipping 4. Cormputer Support 5. Personnel 6. Customer Service (81) 
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