Question 1

Dolly Salem owns and operates a bakery in Charleston,South Carolina.Each afternoon,she prepares a shopping list that describes the quantity and variety of ingredients that she will purchase in the evening from a local food wholesaler.The shopping list is an example of a(an)

Accepted Answer

A materials requisition is a document used to request the purchase or withdrawal of materials needed for production, which aligns with Dolly's shopping list for ingredients.

Question 2

For replacement of inventories and assets destroyed by fire or other disasters,an organization needs

Accepted Answer

Adequate insurance coverage is the most important factor for an organization to replace inventories and assets destroyed by fire or other disasters. While stand-by facilities and source data automation can be helpful, they do not provide the same level of protection as insurance coverage.

Question 3

In an Activity-Based Costing (ABC)system,a cause-and-effect relationship is known as a

Accepted Answer

A cause-and-effect relationship in an Activity-Based Costing system is known as a cost driver. It is an activity or factor that causes costs to be incurred in a particular cost object. By identifying cost drivers, ABC can provide more accurate and detailed information about the costs of products or services. A and B are not correct terms in ABC, and D is not a commonly used term in ABC methodology.

Question 4

The cost of a product liability claim can be classified as a(n)

Accepted Answer

Product liability claims are the result of external failure, meaning that the product has already failed in the market and a claim has been made against the company. The cost of the claim is therefore an external failure cost.

Question 5

________ are associated with testing to ensure that products meet quality standards.

Accepted Answer

Inspection costs are associated with testing to ensure that products meet quality standards. External failure costs occur after the product has been shipped and result in a loss of customers, while internal failure costs occur within the production process and result in rework or scrap. Prevention costs are associated with preventing defects from occurring in the first place.

Question 6

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

Accepted Answer

The list Dolly prepares each morning is a production order, which outlines the quantity and type of products to be produced during the day. A bill of materials is a detailed list of materials required for a specific product, and a materials requisition is a request for those materials. An operations list typically refers to a list of tasks required to complete a specific project or process.

Question 7

What specific control can help restrict the rights of authorized users to only the portion of a database needed to complete their specific job duties?

Accepted Answer

An access control matrix is a specific control that can help restrict the rights of authorized users to only the portion of a database needed to complete their specific job duties. It allows for a detailed determination of which users have access to which data, ensuring that access is restricted to those who need it. Passwords and user IDs, closed-loop verification, and specific authorization are all important controls as well, but they do not provide the same level of granularity as an access control matrix.

Question 8

Wee Bee Trucking determines the cost per delivery by summing the average cost of loading,unloading,transporting,and maintenance.This is an example of ________ costing.

Accepted Answer

The answer of Wee Bee Trucking determines the cost per...

Question 9

Wee Bee Trucking determines the cost per delivery by averaging total cost over number of deliveries.This is an example of ________ costing.

Accepted Answer

The answer of Wee Bee Trucking determines the cost per...

Question 10

The best control procedure for accurate data entry is

Accepted Answer

Automation of data collection is the best control procedure for accurate data entry because it minimizes human error by directly capturing data from its source or through devices designed for specific data collection tasks, leading to more accurate and reliable data entry.

Question 11

________ identifies costs with the corporation's strategy for production of goods and services.

Accepted Answer

Activity-based costing is a costing method that identifies costs with the corporation's strategy for the production of goods and services. It does this by identifying activities that consume resources and assigning costs to those activities based on their use of resources. This allows for more accurate costing of products and services based on the activities they require. Job-order costing and process costing are not specifically designed to identify costs with the corporation's strategy for production of goods and services. Manufacturing costing is a broad term that can refer to any of these costing methods, but it does not provide a specific answer to the question.

Question 12

Dolly Salem owns and operates a bakery in Charleston,South Carolina.She maintains a file that lists the sequence of procedures required to make each of her famous cakes and cookies.These instructions are examples of a(an)

Accepted Answer

The sequence of procedures required to make Dolly Salem's cakes and cookies would be an example of an operations list, which outlines the specific steps and tasks needed to complete a production process. A bill of materials would list the raw materials and quantities needed for each recipe, a production order is a document that authorizes the production process to begin, and a materials requisition is a request for the necessary raw materials to be brought to the production area.

Question 13

Dolly Salem owns and operates a bakery in Charleston,South Carolina.She maintains a file of recipes that list the ingredients used to make her famous cakes and cookies.These recipes are examples of a(an)

Accepted Answer

A bill of materials is a list of all the raw materials, components, and sub-assemblies needed to manufacture a finished product. In this case, Dolly Salem's recipe file lists all the ingredients needed to make her famous cakes and cookies, which is a type of bill of materials. The other options, such as operations list and production order, are more related to the manufacturing process and may not be applicable in this context. A materials requisition is a document used to request materials from the inventory, so it's also not applicable in this situation.

Question 14

What is the primary drawback to using a volume-driven base,such as direct labor or machine hours,to apply overhead to products in a traditional cost accounting system?

Accepted Answer

The primary drawback to using a volume-driven base, such as direct labor or machine hours, is that many overhead costs are incorrectly allocated to products since they do not vary with production volume. This can lead to inaccurate product costs and ultimately affect profitability analysis and decision making.

Question 15

What does the first term in the throughput formula,productive capacity,represent?

Accepted Answer

Productive capacity represents the maximum number of units that can be produced given current technology. It is the theoretical maximum output of a production process, without taking into account factors such as downtime, maintenance, or quality control.

Question 16

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

Accepted Answer

Prevention costs are incurred to prevent or reduce defects from occurring in the first place. These costs include activities such as employee training, process improvements, and quality planning.

Question 17

The threat of loss of data exposes the company to

Accepted Answer

The loss of data can result in the loss of assets, such as financial information, customer data, and intellectual property. Without this data, the company may also make ineffective decisions and have inefficient manufacturing processes. Therefore, all of the above options are correct.

Question 18

Which of the following organization controls should be implemented and maintained to counteract the general threat that the loss of production data will greatly slow or halt production activity?

Accepted Answer

Access controls should be implemented to ensure that only authorized personnel can access and modify production data. This will help prevent accidental or intentional deletion or alteration of data, which could cause a significant loss of productivity. Storing data on-site only or backing up data files after production runs are completed are not effective controls for preventing data loss, as they do not address the risks of theft, accidental deletion, or system failure. Allowing access to inventory records from any terminal could increase the risk of unauthorized access or data entry errors.

Question 19

Overproduction or underproduction can be a threat to an organization.To which process or activity does this threat relate?

Accepted Answer

Overproduction or underproduction can both be a threat to an organization's planning and scheduling processes. Overproduction can lead to excess inventory and storage costs, while underproduction can result in missed sales opportunities and dissatisfied customers. By accurately forecasting demand and carefully planning production schedules, organizations can avoid these threats and ensure efficient use of resources.

Question 20

To reduce the threat of theft or destruction of inventories and other fixed assets,the organization may wish to implement which of the following controls?

Accepted Answer

Documenting all movement of inventory through the production process helps track and monitor inventory, reducing the risk of theft or loss.

Quiz 14: The Production Cycle