Question 1

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's or a service's desirability from the point of view of the consumer,while non-value added activities do nothing to increase the desirability in the consumer's view.Storage,handling,and inspection all represent non-value-added activities,while assembly and finishing a product are value-added activities.

Question 2

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  True

Question 3

The identification of a target price for a newly designed product or service is focused on:

Accepted Answer

A) The expected costs of production. 
B) The required profit margin. 
C) The prices charged by existing and potential competitors. 
D) Customers and their functional requirements. 
A) The expected costs of production. 
B) The required profit margin. 
C) The prices charged by existing and potential competitors. 
D) Customers and their functional requirements. D

Question 4

The suppliers and production component of the value chain would include all of the following costs except:

Accepted Answer

A) Direct production labor. 
B) Production set-up. 
C) Salaries for sales personnel. 
D) Receipt of direct materials from suppliers. 
A) Direct production labor. 
B) Production set-up. 
C) Salaries for sales personnel. 
D) Receipt of direct materials from suppliers.

Question 5

During cycle time,value is added only during:

Accepted Answer

A) Processing time. 
B) Storage and waiting time. 
C) Movement time. 
D) Inspection time. 
A) Processing time. 
B) Storage and waiting time. 
C) Movement time. 
D) Inspection time.

Question 6

The development of activity-based cost information is a necessary prerequisite to activity-based management.

Accepted Answer

A) True 
 B)False

Question 7

Activity-based costing systems

Accepted Answer

A) True 
 B)False

Question 8

Just-in-time manufacturing
Candycane Co.is trying to determine how long it takes for one of its products to pass through the production process.The following information was assembled regarding how many days the product spends in various production activities:   (a)Which of the above activities are value-added activities?
(b)What is Candycane's total cycle time?
(c)Determine Candycane's manufacturing efficiency ratio.

Accepted Answer

(a)Value added activities incl

Question 9

Total quality management centers on new product and service development as opposed to managing the value chain for existing products.

Accepted Answer

A) True 
 B)False

Question 10

The target costing process begins with finding a low cost supplier to reduce the overall cost of production.

Accepted Answer

A) True 
 B)False

Question 11

Four categories of costs associated with product quality are:

Accepted Answer

A) External failure,internal failure,prevention,and carrying. 
B) External failure,internal failure,prevention,and appraisal. 
C) External failure,internal failure,training,and appraisal. 
D) Warranty,product liability,prevention,and training. 
A) External failure,internal failure,prevention,and carrying. 
B) External failure,internal failure,prevention,and appraisal. 
C) External failure,internal failure,training,and appraisal. 
D) Warranty,product liability,prevention,and training.

Question 12

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 13

An effective just-in-time system will include:

Accepted Answer

A) Specialized employees. 
B) An efficient plant layout. 
C) Sizable inventories of raw materials. 
D) Many suppliers. 
A) Specialized employees. 
B) An efficient plant layout. 
C) Sizable inventories of raw materials. 
D) Many suppliers.

Question 14

Just-in-time manufacturing systems are also known as:

Accepted Answer

A) Supply push systems. 
B) Supply pull systems. 
C) Demand push systems. 
D) Demand pull systems. 
A) Supply push systems. 
B) Supply pull systems. 
C) Demand push systems. 
D) Demand pull systems.

Question 15

Value-added activities include:

Accepted Answer

A) Setting up machinery. 
B) Storing direct materials. 
C) Employee idle time. 
D) Product design. 
A) Setting up machinery. 
B) Storing direct materials. 
C) Employee idle time. 
D) Product design.

Question 16

Cycle time is the length of time required for a product to pass completely through a manufacturing process.

Accepted Answer

A) True 
 B)False

Question 17

Non-value-added activities are those that add to a product's desirability.

Accepted Answer

A) True 
 B)False

Question 18

In the target costing process,target price is computed by adding the desired profit margin to the target product cost.

Accepted Answer

A) True 
 B)False

Question 19

A primary objective of target costing is to reduce development time.

Accepted Answer

A) True 
 B)False

Question 20

All of the following are components of the value chain except:

Accepted Answer

A) Research and design activities. 
B) Obtaining raw materials. 
C) Supporting the product after it is sold. 
D) Maintaining large inventories so that orders can be filled promptly. 
A) Research and design activities. 
B) Obtaining raw materials. 
C) Supporting the product after it is sold. 
D) Maintaining large inventories so that orders can be filled promptly.

Exam 19: Costing and the Value Chain

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

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

The identification of a target price for a newly designed product or service is focused on:

The suppliers and production component of the value chain would include all of the following costs except:

During cycle time,value is added only during:

The development of activity-based cost information is a necessary prerequisite to activity-based management.

Activity-based costing systems

Total quality management centers on new product and service development as opposed to managing the value chain for existing products.

The target costing process begins with finding a low cost supplier to reduce the overall cost of production.

Four categories of costs associated with product quality are:

An effective just-in-time system will include:

Just-in-time manufacturing systems are also known as:

Value-added activities include:

Cycle time is the length of time required for a product to pass completely through a manufacturing process.

Non-value-added activities are those that add to a product's desirability.

In the target costing process,target price is computed by adding the desired profit margin to the target product cost.

A primary objective of target costing is to reduce development time.

All of the following are components of the value chain except:

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: a Business Partner

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

Forms of Business Organization

The Time Value of Money: Future Amounts and Present Values

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