Question 1

Activity-based costing (ABC)can refine and improve cost allocations using either job-order or process cost systems.There are three significant differences between ABC and traditional cost accounting approaches.An ABC system attempts to identify anything that has a cause-and-effect relationship on costs.This cause-and-effect relationship is known as a

Accepted Answer

A) cost stimulator. 
B) overhead stimulator. 
C) cost driver. 
D) cost catalyst.

Question 2

Dolly Salem owns and operates a bakery in Charleston,South Carolina.Each morning she prepares a list that describes the number and variety of cakes and cookies that will be prepared during the day.This list is an example of a(an)

Accepted Answer

A) bill of materials. 
B) operations list. 
C) production order. 
D) materials requisition. 
E) move ticket.

Question 3

A __________ authorizes the transfer of raw goods needed for production from the storeroom to the production facilities.

Accepted Answer

A) master production schedule 
B) materials requisition 
C) move ticket 
D) production order

Question 4

The expenses associated with the use of clean rooms in the production of computer hard drives are ______ costs.

Accepted Answer

A) prevention 
B) inspection 
C) internal failure 
D) external failure

Question 5

__________ are incurred to ensure that products are created without defects the first time.

Accepted Answer

A) External failure costs 
B) Inspection costs 
C) Internal failure costs 
D) Prevention costs

Question 6

A company's production process may incorporate various forms of information technology such as robots and computer-controlled machinery.One effect of using such a process is a shift from mass production to custom order manufacturing.This process is called

Accepted Answer

A) ERP. 
B) CRM. 
C) AIS. 
D) CIM.

Question 7

There are four basic activities in the production cycle.The step that may incorporate robots and computer-controlled machinery to achieve its goals is

Accepted Answer

A) product design. 
B) planning and scheduling. 
C) production operations. 
D) cost accounting.

Exam 12: The Production Cycle