Question 1

Explain process value analysis.

Accepted Answer

Process value analysis provides informat

Question 2

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 above. Sammie's theoretical cycle time for this year would be

Accepted Answer

A)  2.00 hours per unit 
B)  1.80 hours per unit 
C)  0.56 hours per unit 
D)  0.50 hours per unit 
A)  2.00 hours per unit 
B)  1.80 hours per unit 
C)  0.56 hours per unit 
D)  0.50 hours per unit

Question 3

Life-cycle cost management is particularly important for firms that have

Accepted Answer

A)  short life cycles because those firms have less opportunity to take advantage of the time value of money 
B)  long life cycles because those firms have more opportunity to take advantage of the time value of money 
C)  long life cycles because those firms have more opportunity to enhance profit performance through product redesign or cost reduction 
D)  short life cycles because those firms have less opportunity to enhance profit performance through product redesign or cost reduction 
A)  short life cycles because those firms have less opportunity to take advantage of the time value of money 
B)  long life cycles because those firms have more opportunity to take advantage of the time value of money 
C)  long life cycles because those firms have more opportunity to enhance profit performance through product redesign or cost reduction 
D)  short life cycles because those firms have less opportunity to enhance profit performance through product redesign or cost reduction

Question 4

For each following activity, determine the amount of value-added and nonvalue-added costs.
a.
The company keeps 7 days of materials inventory on hand to avoid shutdowns due to materials shortages. Carrying costs are £50,000 per day.
b.
A time-and-motion study revealed that it should take 10 minutes to produce a product that now takes 50 minutes to produce. labour is £18 per hour.
c.
Warranty work costs the firm £500,000 per year. Warranty costs for the industry average £100,000 per year.

Accepted Answer

The answer of For each following activity, determine the amount...

Question 5

Benchmarking

Accepted Answer

A)  is an approach to standard setting that is used to identify opportunities for activity improvement 
B)  uses best practices as the standard for evaluating activity performance 
C)  Both a and b are correct. 
D)  Neither a nor b is correct. 
A)  is an approach to standard setting that is used to identify opportunities for activity improvement 
B)  uses best practices as the standard for evaluating activity performance 
C)  Both a and b are correct. 
D)  Neither a nor b is correct.

Question 6

Which of the following is an example of a value-added activity?

Accepted Answer

A)  supervision of production workers 
B)  inspection of products 
C)  scheduling of production 
D)  all are value-added activities 
A)  supervision of production workers 
B)  inspection of products 
C)  scheduling of production 
D)  all are value-added activities

Question 7

JIT avoids shutdowns due to materials shortages in all of the following ways EXCEPT

Accepted Answer

A)  using total preventive maintenance 
B)  holding inventory 
C)  using total quality control to reduce defective materials 
D)  working with suppliers to ensure the availability of materials 
A)  using total preventive maintenance 
B)  holding inventory 
C)  using total quality control to reduce defective materials 
D)  working with suppliers to ensure the availability of materials

Question 8

Merollis Company instituted a quality program last year. The nonvalue-added actual activity for last year and this year and the standard cost of each activity is as follows:
Required:
Prepare this year's trend report for nonvalue-added costs.

Accepted Answer

The answer of Merollis Company instituted a quality program last...

Question 9

Rollo Company has developed cost formulas for the drivers of the following production activities: If the actual activity was 20 setups and the actual fixed cost for inspections was £28,000 and the variable cost for inspections was £5,000, the total variance for inspections is due to

Accepted Answer

A)  favorable variance on fixed costs. 
B)  unfavorable variance on fixed costs. 
C)  favorable variance on variable costs. 
D)  unfavorable variance on variable costs. 
A)  favorable variance on fixed costs. 
B)  unfavorable variance on fixed costs. 
C)  favorable variance on variable costs. 
D)  unfavorable variance on variable costs.

Question 10

A company keeps 20 days of materials inventory on hand to avoid shutdowns due to materials shortages. Carrying costs average £4,000 per day. A competitor keeps 10 days of inventory on hand, and the competitor's carrying costs average £2,000 per day. The nonvalue-added costs for the company are

Accepted Answer

A)  £80,000. 
B)  £40,000. 
C)  £20,000. 
D)  £-0-. 
A)  £80,000. 
B)  £40,000. 
C)  £20,000. 
D)  £-0-.

Question 11

Inspection labour costs are

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 12

_____ involves choosing among various sets of activities that are caused by competing strategies.

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 13

_____ focuses on nonvalue-added 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 14

The Kanban system controls inventory through the use of

Accepted Answer

A)  electronic data interchange 
B)  markers or cards 
C)  rigid control of safety stock 
D)  reengineering the production process 
A)  electronic data interchange 
B)  markers or cards 
C)  rigid control of safety stock 
D)  reengineering the production process

Question 15

Activity-based management attempts to

Accepted Answer

A)  identify and eliminate all unnecessary activities 
B)  increase the efficiency of necessary activities 
C)  add new activities that increase value 
D)  do all of the above 
A)  identify and eliminate all unnecessary activities 
B)  increase the efficiency of necessary activities 
C)  add new activities that increase value 
D)  do all of the above

Question 16

Describe activity-based performance measurement.

Accepted Answer

Activity performance is evaluated on thr

Question 17

_____ are the results or products of an activity.

Accepted Answer

A)  Activity inputs 
B)  Activity outputs 
C)  Cost driver analysis 
D)  Value-added activities 
A)  Activity inputs 
B)  Activity outputs 
C)  Cost driver analysis 
D)  Value-added activities

Question 18

What is responsibility accounting? Compare and contrast financial-based responsibility accounting with activity-based responsibility accounting.

Accepted Answer

Responsibility accounting is a fundament

Question 19

A technique for improving performance of activities and processes that searches for best practices is called

Accepted Answer

A)  value-added reporting. 
B)  kaizen costing. 
C)  trend reporting. 
D)  benchmarking. 
A)  value-added reporting. 
B)  kaizen costing. 
C)  trend reporting. 
D)  benchmarking.

Question 20

_____ are costs of activities performed because contaminants and waste have been produced but not discharged into the environment.

Accepted Answer

A)  Environmental prevention costs 
B)  Environmental detection costs 
C)  Environmental internal failure costs 
D)  Environmental external costs 
A)  Environmental prevention costs 
B)  Environmental detection costs 
C)  Environmental internal failure costs 
D)  Environmental external costs

Explain process value analysis.

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 above. Sammie's theoretical cycle time for this year would be

Life-cycle cost management is particularly important for firms that have

Benchmarking

Which of the following is an example of a value-added activity?

JIT avoids shutdowns due to materials shortages in all of the following ways EXCEPT

Merollis Company instituted a quality program last year. The nonvalue-added actual activity for last year and this year and the standard cost of each activity is as follows: Required: Prepare this year's trend report for nonvalue-added costs.

Rollo Company has developed cost formulas for the drivers of the following production activities: If the actual activity was 20 setups and the actual fixed cost for inspections was £28,000 and the variable cost for inspections was £5,000, the total variance for inspections is due to

A company keeps 20 days of materials inventory on hand to avoid shutdowns due to materials shortages. Carrying costs average £4,000 per day. A competitor keeps 10 days of inventory on hand, and the competitor's carrying costs average £2,000 per day. The nonvalue-added costs for the company are

Inspection labour costs are

_____ involves choosing among various sets of activities that are caused by competing strategies.

_____ focuses on nonvalue-added activities.

The Kanban system controls inventory through the use of

Activity-based management attempts to

Describe activity-based performance measurement.

_____ are the results or products of an activity.

What is responsibility accounting? Compare and contrast financial-based responsibility accounting with activity-based responsibility accounting.

A technique for improving performance of activities and processes that searches for best practices is called

_____ are costs of activities performed because contaminants and waste have been produced but not discharged into the environment.

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

Explain process value analysis.

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 above. Sammie's theoretical cycle time for this year would be

Life-cycle cost management is particularly important for firms that have

Benchmarking

Which of the following is an example of a value-added activity?

JIT avoids shutdowns due to materials shortages in all of the following ways EXCEPT

Merollis Company instituted a quality program last year. The nonvalue-added actual activity for last year and this year and the standard cost of each activity is as follows: Required: Prepare this year's trend report for nonvalue-added costs.

Rollo Company has developed cost formulas for the drivers of the following production activities: If the actual activity was 20 setups and the actual fixed cost for inspections was £28,000 and the variable cost for inspections was £5,000, the total variance for inspections is due to

A company keeps 20 days of materials inventory on hand to avoid shutdowns due to materials shortages. Carrying costs average £4,000 per day. A competitor keeps 10 days of inventory on hand, and the competitor's carrying costs average £2,000 per day. The nonvalue-added costs for the company are

Inspection labour costs are

_____ involves choosing among various sets of activities that are caused by competing strategies.

_____ focuses on nonvalue-added activities.

The Kanban system controls inventory through the use of

Activity-based management attempts to

Describe activity-based performance measurement.

_____ are the results or products of an activity.

What is responsibility accounting? Compare and contrast financial-based responsibility accounting with activity-based responsibility accounting.

A technique for improving performance of activities and processes that searches for best practices is called

_____ are costs of activities performed because contaminants and waste have been produced but not discharged into the environment.

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