Exam 20: Value-Based Systems: Activity-Based Costing and Lean Accounting

Both traditional and backflush costing have an account for __________ Inventory.

Comparing the goals of activity-based management (ABM)and lean operations we can say that __________ aim(s)to simplify activities.

.Product unit costs computed using activity-based costing compared to product unit costs computed using a traditional costing approach will

For work done during June,Prints Company incurred direct materials costs of $150,000 and conversion costs of $225,000.The company employs a traditional operating philosophy.At the end of August,it was determined that the Work in Process Inventory account had been assigned $2,000 of costs,and the ending balance of the Finished Goods Inventory account was $5,000.There were no beginning inventory balances. -Using the information provided for Prints Company,how much was cost of goods manufactured during June?

In order for a manager to reduce throughput time,it is necessary for the accounting system to focus on calculating units produced per direct labor hour.

For service organizations,customer relations are part of the supply chain and customers are part of the value chain.

For work done during June,Prints Company incurred direct materials costs of $150,000 and conversion costs of $225,000.The company employs a traditional operating philosophy.At the end of August,it was determined that the Work in Process Inventory account had been assigned $2,000 of costs,and the ending balance of the Finished Goods Inventory account was $5,000.There were no beginning inventory balances. -Using the information provided for Prints Company,how much was charged to the Cost of Goods Sold account during June?

For a manufacturer,the final customer is part of the supply chain and customer service is part of the value chain.

Customer relations are usually part of

Distinguish between a supply chain and a value chain.How do they relate to each other?

Typically,there are four levels in the cost hierarchy.

Full product cost includes both nonproduction costs and production costs required to satisfy customers.

The time a product spends waiting to be worked on is called storage time.

You have been invited to address the Students In Free Enterprise (SIFE)team of your alma mater.The topic the team has chosen is the just-in-time philosophy in terms that beginning business students can readily comprehend.The meeting is taking place in the college cafeteria.Reservations and menu choices have been made in advance.It has been suggested that you use that setting as an example of the implementation of a JIT operating system.It will also be beneficial if you indicate in your talk some instances where JIT would be less suitable in the college food services situation.What will you say?

Which of the following activities would be part of the supply chain of a manufacturer?

A just-in-time operation seeks to eliminate all product support functions.

Backflush costing eliminates the need to make journal entries during the period to track cost flows through the production process as the product is made.

Activity costs per unit equal total volume divided by total activity costs.

Which of the four levels of the cost hierarchy would be used by a dress manufacturer using an activity-based management for sewing seams on a garment?

Define activity-based costing.Explain why this approach to cost assignments is superior to the traditional method of using a plantwide overhead cost rate.Will activity-based costing always result in lower product costs? Justify your answer.