Question 1

Which of the following can have a negative impact on a sale's profitability?

Accepted Answer

All of these factors can have a negative impact on a sale's profitability. A longer sales cycle with more required sales contacts increases the cost of sales. Special shipping instructions can result in extra expenses for the seller. Longer accounts receivable collection time affects cash flow and may require extra resources to manage. Purchase-order changes can cause delays and additional costs for the seller.

Question 2

Factory Oak produces various wooden bookcases,tables,storage units,and chairs.Which of the following would be included in a listing of the company's non-value-added activities?

Accepted Answer

Non-value-added activities are the activities that do not add value to the final product or service. Assembly of tables (choice A) and staining of storage units (choice B) are value-added activities as they add value to the products. However, the transfer of chairs from the assembly line to the staining facility (choice C) and storage of completed bookcases in inventory (choice D) are non-value-added activities as they do not add value to the products. Therefore, choice E, which includes both non-value-added activities, is the correct answer.

Question 3

Customer profitability analysis is tied closely to:

Accepted Answer

The answer of Customer profitability analysis is tied closely to:
...

Question 4

Hilton Corporation's customers differ greatly with respect to number of required sales contacts (e.g. ,phone calls and sales visits),account payment patterns,and design/engineering change orders.Which of the following choices likely denotes an ideal customer from Hilton's perspective?

Accepted Answer

The answer of Hilton Corporation's customers differ greatly with respect...

Question 5

Which of the following statements regarding quality is (are)true for a company that has implemented a JIT system?
I.JIT requires quality production facilities,methods,and employees.
II.JIT requires the acquisition of quality raw materials.
III.JIT requires that long-term contracts be negotiated with quality suppliers.

Accepted Answer

JIT (Just-In-Time) systems emphasize minimizing inventory and rely on high-quality production processes, materials, and supplier relationships to ensure smooth operations without delays.

Question 6

A hospital administrator is in the process of implementing an activity-based-costing system.Which of the following tasks would not be part of this process?

Accepted Answer

All of the listed tasks would be part of the activity-based-costing system implementation process.

Question 7

A company that adopts a just-in-time production system would attempt to reduce and/or eliminate:

Accepted Answer

A just-in-time production system aims to minimize inventory levels throughout the production process, from raw materials to finished goods. Therefore, the best choice is C as this option includes reduction/elimination of all inventory types, including raw materials, work-in-process, and finished goods.

Question 8

The adoption of a 24-7 employee hotline for workplace complaints is an example of a:

Accepted Answer

The adoption of a 24-7 employee hotline for workplace complaints is a business-value-added activity because it adds value to the company by improving employee morale, reducing turnover, and minimizing lawsuits.

Question 9

When determining customer profitability,activity-based costing can be used to analyze:

Accepted Answer

Activity-based costing involves identifying specific activities that contribute to the cost of serving a customer, and then assigning those costs to individual customers. All of the options listed - orders processed, sales visits, special packaging and handling, and billing and collections - are examples of activities that can be included in a customer profitability analysis using activity-based costing. Therefore, option E is the best choice.

Question 10

Which of the following inventories would a company try to reduce and/or eliminate under a just-in-time system?

Accepted Answer

The answer of Which of the following inventories would a...

Question 11

Which of the following statements regarding the pull method is (are)true?
I.Goods are produced in each manufacturing stage only as they are needed at the next stage.
II.The pull method greatly reduces work-in-process inventory.
III.The pull method reduces waiting time and the associated non-value-added cost.

Accepted Answer

The pull method involves producing goods only as needed, which reduces work-in-process inventory and waiting time, thus minimizing non-value-added costs.

Question 12

A Kanban:

Accepted Answer

A Kanban is a signaling system used to trigger or initiate production in a particular work center, often used in just-in-time manufacturing processes to control the logistical chain from a production point of view.

Question 13

Airstream builds recreational motor homes.All of the following activities add value to the finished product except:

Accepted Answer

The storage of the vehicle in the sales area does not add any value to the finished product. It is merely a step in the distribution process. All of the other activities listed involve adding or improving features of the motor home, thereby increasing its value.

Question 14

Generally speaking,companies prefer doing business with customers who:

Accepted Answer

Companies prefer doing business with customers who request normal delivery times because it allows for easier planning and scheduling of production and delivery. Ordering small quantities may not be as profitable for the company, changing orders frequently can create logistical

Question 15

Which of the following is not a key feature of a JIT system?

Accepted Answer

JIT systems aim to minimize inventory and waste by purchasing materials in small amounts as needed. Therefore, purchasing in relatively large amounts (i.e., lot sizes) is not a key feature of a JIT system.

Question 16

Which of the following is not an example of a business-value-added activity?

Accepted Answer

Final painting and polishing of the product is not a business-value-added activity, as it is a necessary step in the production process and does not directly add value to the business. The other options all involve implementing technology or systems that can improve efficiency, reduce costs, or enhance customer satisfaction, all of which are value-added activities.

Question 17

An example of a customer-value-added activity is:

Accepted Answer

Final painting and polishing of the product adds value to the customer by improving the quality and appearance of the product, which can increase customer satisfaction and willingness to pay. Installation of a computerized human resource management module, shortening billing cycles, and adding an employee hotline are important activities, but they primarily add value to the company's internal processes and operations, rather than directly benefiting the customer. Maintenance of an adequate safety stock is also important, but it is a basic requirement for ensuring timely and reliable delivery to customers, rather than a value-added activity.

Question 18

Marion Corporation,which produces unique office furniture,recently installed a just-in-time production system.The various steps in the company's manufacturing process are coordinated by using a philosophy known as:

Accepted Answer

The just-in-time production system is based on the demand pull philosophy, which means that the production process is driven by customer demand. This ensures that the company only produces what is needed when it is needed, reducing waste and increasing efficiency.

Question 19

Of the following organizations,activity-based costing (ABC)cannot be used by:

Accepted Answer

Activity-based costing (ABC) can be used by all organizations mentioned in the options, including manufacturers, financial-services firms, book publishers, and hotels. ABC is a method used to identify and assign costs to specific activities, which is beneficial for any organization regardless of its industry.

Question 20

The adoption of a 24-7 customer service help line is an example of a:

Accepted Answer

The adoption of a 24-7 customer service help line is an example of a customer-value-added activity because it directly benefits the customer by providing them with support whenever they need it.

Quiz 5: Activity-Based Costing and Management