Deck 3: Inventory, Productivity, Principles, and Costing Methodologies

Question 1

Which of the following characteristics is relevant to process costing but not to job order costing?

A)Averaging process
B)Identifiable batches of production
C)Equivalent units
D)Use of standard cost

Answer 1

Equivalent units

Question 2

Which of the following types of spoilage should not affect the recorded cost of inventories

A)Normal spoilage
B)Standard spoilage
C)Abnormal spoilage
D)Seasonal spoilage

Answer 2

Abnormal spoilage

Question 3

A section of the cost of production report which shows the physical flow of units through various producing departments is usually labeled as

A)Schedule of physical flow
B)Quantity schedule
C)Equivalent units of production
D)Cost to be accounted for

Answer 3

Quantity schedule

Question 4

What does FIFO mean?

A)Finished stock In Finished stock out
B)Fabrications Inward Fabrications Outward
C)Final Input Final Output
D)First In First Out

Question 5

Regardless of how long it takes to produce and sell inventory, inventory is always considered to be a?

A)Current asset
B)Current liability
C)Long-term asset
D)Stockholder's equity

Question 6

The latest cost of inventories is changed to production but the old prices are changed to inventories on hand?

A)Average
B)LIFO
C)FIFO
D)Perpetual

Question 7

An increase in inventories indicates that?

A)More merchandise was purchased then the amount sold to customer
B)Less merchandise was purchased then sold to the customer
C)Not all purchases were cash
D)Cash payments were more than purchases on account

Question 8

Which type of inventory system is updated inventory system?

A)Periodic inventory system
B)Contingency inventory system
C)LIFO
D)Perpetual inventory system

Question 9

What is the principal criterion used to distinguish between tangible assets and inventories?

A)The physical substance of the asset
B)The acquisition cost of the asset
C)The nature of the company's activity, which determines the purpose for which the asset is held
D)The moment in the accounting period when the asset is acquired

Question 10

Which of the following method is suitable for calculating the cost of inventory when actual costs of individual units of merchandise can be determined from the accounting records?

A)FIFO Method
B)LIFO Method
C)Specific Identification Method
D)Average Method

Question 11

The inventories are recorded at the latest price but the production cost is changed old cost price?

A)FIFO
B)Average
C)Both A & B
D)None

Question 12

Which one of the following methods for inventory valuation may be misleading when the units are identical?

A)FIFO Method
B)LIFO Method
C)Specific Identification Method
D)None

Question 13

During September, Khan had sales of 148,000, which made a gross profit of 40,000. Purchases amounted to 100,000 and opening inventory was 34,000. The value of closing inventory was?

A)Rs. 24,000
B)Rs. 26,000
C)Rs. 42,000
D)Rs. 54,000

Question 14

Which type of inventory system requires updating the inventory balance at the end of the accounting period?

A)Periodic inventory system
B)LIFO
C)Perpetual inventory system
D)FIFO

Question 15

In LIFO method of inventory valuation?

A)Issue of stocks to production is at latest price
B)Closing stock is at latest price
C)Both (a) & (b)
D)Neither (a) nor (b)

Question 16

In FIFO method of inventory valuation?

A)Closing stock is at latest price
B)Issue of stocks to production is at earliest price
C)Both (a) & (b)
D)Neither (a) nor (b)

Question 17

Which one of the following does not describe a type of transfer pricing?

A)Target based
B)Cost based
C)Negotiated
D)Administered

Question 18

Systematic evaluation of the trade-offs between product functionality and product cost while still satisfying customer needs is the definition of

A)Activity based management
B)Theory of constraints
C)Total quality management
D)Value engineering

Question 19

Productivity is the ratio between input and __________.

A)Product
B)Output
C)Value
D)Cost

Question 20

Labour productivity measures the growth in value added _____ per unit of labour used.

A)Input
B)Output
C)Cost
D)Energy

Question 21

Pareto Principle is ______ rule.

A)80/20
B)50/50
C)60/40
D)10/90

Question 22

The Theory of Constraints is an organizational change method that is focused on ___________ improvement.

A)Profit
B)Cost
C)Product
D)Economics

Question 23

The essential concept of TOC is that every organization must have at least one ____________.

A)Process
B)Function
C)Constraint
D)Cost

Question 24

A _______ is any factor that limits the organization from getting more of whatever it strives for.

A)Constraint
B)Cost
C)Profit
D)Revenue

Question 25

Lean management has been developed with the intention of reducing ________________ and maximizing the value of the product or the service to the customer.

A)Cost
B)Value Cost
C)Process Waste
D)Profit

Question 26

________________ is an important part of lean thinking.

A)Lean Management
B)Cost Management
C)Strategic Cost
D)Cost Reduction

Question 27

A ______________ is the sequence of phases that a project goes through from its initiation to its closure.

A)Product Management
B)Project Management
C)Project Sequencing
D)ProjectLife Cycle

Question 28

____________ describes the activities within and around an organization, and relates them to an analysis of the competitive strength of the organization.

A)Value Chain Analysis
B)Value Management
C)Value Engineering
D)Strategic Cost

Question 29

Porter argues that the ability to perform particularactivities and to manage the linkages between these activities is a source of _______________ advantage.

A)Cost
B)Competitive
C)Functional
D)Profitability

Question 30

_________ is referred to as continuous improvement costing.

A)Kaizen
B)JIT
C)Kanban
D)Cost sensitivity

Question 31

Kaizen is a method aimed at ______ reduction below standard level, but without negative effects on quality, staff, safety, etc.

A)Cost
B)Waste
C)Non - value activities
D)Constraints

Question 32

______________ is introduced as a technique that aims to manage product costs throughout the design stage.

A)Process Costing
B)Product Costing
C)Target Costing
D)Strategic Costing

Question 33

Target costing is a ___________ costing methodology, in which the selling price and the required profit margin are used to determine the allowable cost for manufacturing a new/existing product.

A)Modern
B)Reverse
C)Product
D)Process

Question 34

_________ Costing Also known as delayed costing,

A)Backflush
B)Conventional
C)Modern
D)Competitive

Question 35

Backflush costing is an accounting method that records costs after a good is sold or a service is ___________.

A)Initiated
B)Progressed
C)Completed
D)Planned

Question 36

____________ means change for the better.

A)Kaizen
B)Theory of Constraints
C)Kanban
D)C. JIT

Question 37

TOC stands for _____________________.

A)Theory of Competition
B)Theory of Cost
C)Theory of Constraints
D)Theory of Complexity