Question 1

__________ represent testing to identify defective units before they are ready for sale.

Accepted Answer

The answer of __________ represent testing to identify defective units...

Question 2

Quality control problems and inefficiencies in production operations will most likely result in increased expenses.The AIS can produce a measure of throughput to quantify and measure the number of "good" units produced in a time period.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.

Question 3

__________ links costs to the corporation's strategy for production of goods and services.

Accepted Answer

Activity-based costing is a costing method that links costs to the corporation's strategy for production of goods and services. It identifies activities that consume resources and assigns costs to those activities based on their use of resources. This method provides more accurate and detailed information, enabling better decision-making for effective strategy implementation. Job-order costing is used for the production of custom-made products, while process costing is used for mass-produced products. Manufacturing costing is a generic term that encompasses various costing methods used in the manufacturing process.

Question 4

Throughput is a measure of

Accepted Answer

The answer of Throughput is a measure of
...

Question 5

Wee Bee Trucking determines the cost per delivery by identifying variables as cost drivers and allocating overhead accordingly.This is an example of _______ costing.

Accepted Answer

Activity-based costing identifies cost drivers and allocates overhead based on activities rather than simply dividing it among units or jobs. This approach allows for more accurate and detailed cost attribution to specific activities, which can help companies make more precise pricing decisions and improve efficiency.

Question 6

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

Accepted Answer

The list that Dolly prepares is a materials requisition, which is a document or form used to request materials or inventory needed for production or operation.

Question 7

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.One difference between the two systems is how clearly the results of management activities are measured on overall profitability.This benefit is better known as

Accepted Answer

ABC differs from traditional cost accounting approaches by providing improved cost management, which means that the results of management activities are measured on overall profitability in a clearer manner. This is because ABC assigns costs to products and services based on their actual consumption of resources, rather than relying on arbitrary allocation methods. The other options listed are not the best choice because they do not adequately describe the difference between ABC and traditional cost accounting.

Question 8

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 9

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 file that lists the sequence of procedures required to make each of Dolly Salem's famous cakes and cookies is an operations list, which outlines the specific steps required to complete each product. A bill of materials would list the specific ingredients needed for each product, a production order is a document used to authorize the manufacture of a specific quantity of a product, a materials requisition form is used to request materials needed for production, and a move ticket is used to authorize the movement of materials or products within a warehouse or factory.

Question 10

There are various costs associated with quality control,or its absence in a production operation.Such information can help a company determine the effects of actions taken to improve production and identify areas of improvement.The cost of a product liability claim can be classified as a(n)

Accepted Answer

Product liability claims occur when a product has a defect or is unsafe, leading to harm or injury to the user. This falls under the category of external failure cost, which refers to costs incurred after a product has been delivered that result from customer complaints or product recalls.

Question 11

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

The cause-and-effect relationship identified by the ABC system is known as a cost driver. A cost driver is any factor that directly impacts the cost of a particular activity or process. It helps to assign costs to products or services more accurately. Options A, B, and D are not correct as they do not accurately describe the relationship between the cost and the factor influencing it.

Question 12

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

Accepted Answer

Inspection costs are directly associated with testing to ensure that products meet quality standards. External failure costs occur when defective products are released and reach customers, internal failure costs occur when defects are detected during production or prior to shipment, and prevention costs are associated with preventing defects from occurring in the first place.

Question 13

What may be perceived as a drawback of using an activity-based costing (ABC)system?

Accepted Answer

The drawback of using an activity-based costing (ABC) system is that it may cost more to run and be more complex in nature compared to traditional costing systems. This is because the ABC system involves identifying and tracking all activities and costs associated with production, which requires more resources and time than other costing methods.

Question 14

There are several criticisms of traditional cost accounting systems.One criticism is that the traditional cost system uses a volume-driven base,such as direct labor or machine hours,to apply overhead to products.What is the drawback to the use of such a measurement in a traditional cost accounting system?

Accepted Answer

Using a volume-driven base to apply overhead to products assumes that overhead costs vary proportionally with production volume. However, many overhead costs do not vary with production volume, leading to incorrect allocation of these costs to products. This can result in distorted product costs and may lead to poor decision-making.

Question 15

In activity-based costing,expenses associated with the purchase of health care insurance for employees are _______ overhead.

Accepted Answer

The expense associated with the purchase of health care insurance for employees is an example of companywide overhead as it is a cost incurred by the organization as a whole and not specifically related to any one product or batch of products.

Question 16

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

The list prepared by Dolly Salem describing the number and variety of cakes and cookies to be prepared during the day is an example of a production order. It specifies what products need to be produced and in what quantities. A bill of materials is a list of all the raw materials needed to produce a product, an operations list specifies the steps and processes required to produce a product, a materials requisition is a document used to request materials for production, and a move ticket is a document used to authorize the movement of goods within a factory or warehouse.

Question 17

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

Accepted Answer

Prevention costs are incurred to ensure that products are created without defects the first time. These costs include activities such as employee training, quality control processes, and design and engineering processes that eliminate potential defects before production.

Question 18

In activity-based costing,the expenses associated with research and development are _______ overhead.

Accepted Answer

The answer of In activity-based costing,the expenses associated with research...

Question 19

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 materials required to produce a product or service. In this case, Dolly Salem's recipes list all the ingredients needed to make her cakes and cookies, which makes them an example of a bill of materials.

Question 20

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