Question 1

Costs incurred because products or services fail to meet requirements after delivery to customers are called

Accepted Answer

A)  external failure costs. 
B)  internal failure costs. 
C)  appraisal costs. 
D)  prevention costs. 
A)  external failure costs. 
B)  internal failure costs. 
C)  appraisal costs. 
D)  prevention costs.

Question 2

At the beginning of the year, Bing Company initiated a quality improvement program. The program was successful in reducing scrap and rework costs. To help assess the impact of the quality improvement program, Bing's managers collected the following data for the current and preceding year:
Required:
   
a.
Compute prevention costs, appraisal costs, internal failure costs, and external failure costs as a percentage of sales for the preceding year and the current year.
b.
How much has profit increased as a result of quality improvements?
c.
If quality costs can be reduced even further to 2.5 percent of sales, how much additional profit would result?

Accepted Answer

b. £235,000 £2,495,0

Question 3

Setup time for a product is 12 hours. A firm that uses JIT and produces the same product has reduced setup time to 1 hour. Setup labour is £6 per hour. The nonvalue-added costs are

Accepted Answer

A)  £72. 
B)  £66. 
C)  £12. 
D)  £6. 
A)  £72. 
B)  £66. 
C)  £12. 
D)  £6.

Question 4

_____ is an effort to reduce costs of existing products and processes.

Accepted Answer

A)  Kaizen costing 
B)  Activity elimination 
C)  Activity selection 
D)  Activity reduction 
A)  Kaizen costing 
B)  Activity elimination 
C)  Activity selection 
D)  Activity reduction

Question 5

A time-and-motion study revealed that it should take 2 hours to produce a product that currently takes 6 hours to produce. labour is £8 per hour. The value-added costs are

Accepted Answer

A)  £16. 
B)  £32. 
C)  £48. 
D)  £-0-. 
A)  £16. 
B)  £32. 
C)  £48. 
D)  £-0-.

Question 6

_____ are those activities necessary to remain in business.

Accepted Answer

A)  Activity inputs 
B)  Activity outputs 
C)  Activity drivers 
D)  Value-added activities 
A)  Activity inputs 
B)  Activity outputs 
C)  Activity drivers 
D)  Value-added activities

Question 7

Costs incurred because products or services fail to meet requirements after delivery to customers are called

Accepted Answer

A)  external failure costs 
B)  internal failure costs 
C)  appraisal costs 
D)  prevention costs 
A)  external failure costs 
B)  internal failure costs 
C)  appraisal costs 
D)  prevention costs

Question 8

Compare and contrast functional-based, activity-based, and strategic-based responsibility accounting.

Accepted Answer

Functional-based responsibility accounti

Question 9

Provide an example as to how traditional performance measures of a production manager can produce dysfunctional effects counter to the goals of just-in-time inventory management.

Accepted Answer

To increase utilization rates, a product

Question 10

Which of the following is not an objective of activity-based management?

Accepted Answer

A)  to improve decision making through better cost information 
B)  to increase the activity it takes to perform processes 
C)  to encourage cost reduction through continuous improvement 
D)  to increase profitability 
A)  to improve decision making through better cost information 
B)  to increase the activity it takes to perform processes 
C)  to encourage cost reduction through continuous improvement 
D)  to increase profitability

Question 11

_____ decreases the time and resources required by different activities.

Accepted Answer

A)  Activity sharing 
B)  Activity elimination 
C)  Activity selection 
D)  Activity reduction 
A)  Activity sharing 
B)  Activity elimination 
C)  Activity selection 
D)  Activity reduction

Question 12

Figure 1
At the beginning of this year, Sammie Company installed a JIT purchasing and manufacturing system. The following information has been gathered about one of the company's products:
-Refer to Figure 1. Sammie's actual cycle time for this year would be

Accepted Answer

A)  1.8 hours per unit 
B)  0.90 hours per unit 
C)  0.56 hours per unit 
D)  0.50 hours per unit 
A)  1.8 hours per unit 
B)  0.90 hours per unit 
C)  0.56 hours per unit 
D)  0.50 hours per unit

Question 13

Setup time for a product is 12 hours. A firm that uses JIT and produces the same product has reduced setup time to 1 hour. Setup labour is £6 per hour. The value-added costs are

Accepted Answer

A)  £72. 
B)  £66. 
C)  £12. 
D)  £6. 
A)  £72. 
B)  £66. 
C)  £12. 
D)  £6.

Question 14

How does just-in-time manufacturing affect break-even analysis?

Accepted Answer

A)  Variable costs are reduced with a corresponding increase in fixed costs. 
B)  Direct materials is the major variable cost. 
C)  Direct labour and maintenance are viewed as fixed costs. 
D)  all of the above 
A)  Variable costs are reduced with a corresponding increase in fixed costs. 
B)  Direct materials is the major variable cost. 
C)  Direct labour and maintenance are viewed as fixed costs. 
D)  all of the above

Question 15

Using the abbreviations listed below, indicate for each of the costs whether the cost should be classified as:

Accepted Answer

The answer of Using the abbreviations listed below, indicate for...

Question 16

Sasha Cat Company sells one of its products for £100 each. Sales volume averages 750 units per year. Recently, its main competitor reduced the price of its product to £80. Sasha Cat Company expects sales to drop dramatically unless it matches the competitor's price. In addition, the current profit per unit must be maintained. Information about the product (for production of 750) is as follows: The nonvalue-added cost per unit is

Accepted Answer

A)  £41.67. 
B)  £43.33. 
C)  £40.47. 
D)  £38.33. 
A)  £41.67. 
B)  £43.33. 
C)  £40.47. 
D)  £38.33.

Question 17

Which of the following describes a kaizen cost reduction process?

Accepted Answer

A)  It has two process cycles, namely, continuous improvement and maintenance. 
B)  It includes a kaizen standard, which is an ideal standard. 
C)  A maximum standard is set for future performance based on the current kaizen standard attained. 
D)  both a and c 
A)  It has two process cycles, namely, continuous improvement and maintenance. 
B)  It includes a kaizen standard, which is an ideal standard. 
C)  A maximum standard is set for future performance based on the current kaizen standard attained. 
D)  both a and c

Question 18

Provide an example as to how traditional performance measures of a purchasing manager can produce dysfunctional effects counter to the goals of just-in-time inventory management.

Accepted Answer

To achieve quantity discounts, a purchas

Question 19

A company has 20 days of finished goods inventory on hand to avoid stockouts. The carrying costs of the inventory average £5,000 per day. The value-added costs would be

Accepted Answer

A)  £100,000. 
B)  £10,000. 
C)  £5,000. 
D)  £-0-. 
A)  £100,000. 
B)  £10,000. 
C)  £5,000. 
D)  £-0-.

Question 20

Reengineering is another name for

Accepted Answer

A)  product innovation 
B)  process innovation 
C)  process improvement 
D)  product improvement 
A)  product innovation 
B)  process innovation 
C)  process improvement 
D)  product improvement

Costs incurred because products or services fail to meet requirements after delivery to customers are called

Setup time for a product is 12 hours. A firm that uses JIT and produces the same product has reduced setup time to 1 hour. Setup labour is £6 per hour. The nonvalue-added costs are

_____ is an effort to reduce costs of existing products and processes.

A time-and-motion study revealed that it should take 2 hours to produce a product that currently takes 6 hours to produce. labour is £8 per hour. The value-added costs are

_____ are those activities necessary to remain in business.

Costs incurred because products or services fail to meet requirements after delivery to customers are called

Compare and contrast functional-based, activity-based, and strategic-based responsibility accounting.

Provide an example as to how traditional performance measures of a production manager can produce dysfunctional effects counter to the goals of just-in-time inventory management.

Which of the following is not an objective of activity-based management?

_____ decreases the time and resources required by different activities.

Figure 1 At the beginning of this year, Sammie Company installed a JIT purchasing and manufacturing system. The following information has been gathered about one of the company's products: -Refer to Figure 1. Sammie's actual cycle time for this year would be

Setup time for a product is 12 hours. A firm that uses JIT and produces the same product has reduced setup time to 1 hour. Setup labour is £6 per hour. The value-added costs are

How does just-in-time manufacturing affect break-even analysis?

Using the abbreviations listed below, indicate for each of the costs whether the cost should be classified as:

Which of the following describes a kaizen cost reduction process?

Provide an example as to how traditional performance measures of a purchasing manager can produce dysfunctional effects counter to the goals of just-in-time inventory management.

A company has 20 days of finished goods inventory on hand to avoid stockouts. The carrying costs of the inventory average £5,000 per day. The value-added costs would be

Reengineering is another name for

Introduction to Management Accounting

An Introduction to Cost Terms and Concepts

Cost-Volume-Profit Analysis

Measuring Relevant Costs and Revenues for Decision-Making

Pricing Decisions and Profitability Analysis

Capital Investment Decisions

Cost Assignment

Activity-Based Costing

The Budgeting Process

Management Control Systems

Standard Costing and Variance Analysis

Divisional Financial Performance Measurement

Transfer Pricing in Divisionalized Companies

Strategic Performance Management

Filters

Exam 14: Cost Management

Costs incurred because products or services fail to meet requirements after delivery to customers are called

Setup time for a product is 12 hours. A firm that uses JIT and produces the same product has reduced setup time to 1 hour. Setup labour is £6 per hour. The nonvalue-added costs are

_____ is an effort to reduce costs of existing products and processes.

A time-and-motion study revealed that it should take 2 hours to produce a product that currently takes 6 hours to produce. labour is £8 per hour. The value-added costs are

_____ are those activities necessary to remain in business.

Costs incurred because products or services fail to meet requirements after delivery to customers are called

Compare and contrast functional-based, activity-based, and strategic-based responsibility accounting.

Provide an example as to how traditional performance measures of a production manager can produce dysfunctional effects counter to the goals of just-in-time inventory management.

Which of the following is not an objective of activity-based management?

_____ decreases the time and resources required by different activities.

Figure 1 At the beginning of this year, Sammie Company installed a JIT purchasing and manufacturing system. The following information has been gathered about one of the company's products: -Refer to Figure 1. Sammie's actual cycle time for this year would be

Setup time for a product is 12 hours. A firm that uses JIT and produces the same product has reduced setup time to 1 hour. Setup labour is £6 per hour. The value-added costs are

How does just-in-time manufacturing affect break-even analysis?

Using the abbreviations listed below, indicate for each of the costs whether the cost should be classified as:

Which of the following describes a kaizen cost reduction process?

Provide an example as to how traditional performance measures of a purchasing manager can produce dysfunctional effects counter to the goals of just-in-time inventory management.

A company has 20 days of finished goods inventory on hand to avoid stockouts. The carrying costs of the inventory average £5,000 per day. The value-added costs would be

Reengineering is another name for

Introduction to Management Accounting

An Introduction to Cost Terms and Concepts

Cost-Volume-Profit Analysis

Measuring Relevant Costs and Revenues for Decision-Making

Pricing Decisions and Profitability Analysis

Capital Investment Decisions

Cost Assignment

Activity-Based Costing

The Budgeting Process

Management Control Systems

Standard Costing and Variance Analysis

Divisional Financial Performance Measurement

Transfer Pricing in Divisionalized Companies

Strategic Performance Management

Filters