Financial Accounting Exam 1

8 October 2022
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a. Information on a company's past performance is provided to external parties by
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financial accounting
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b. systems are chosen by comparing the costs versus the benefits of the system and are not restricted by GAAP (or International Financial Reporting Standards, IFRS, in the case of companies headquartered in many countries outside of the United States).
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Managerial accounting
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c. systems report on various segments or business units of the company.
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Managerial accounting
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d. Financial accounting develops reports for external parties such as ----- and------
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creditors,shareholders
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e. When managers evaluate the company's performance compared to the plan, they are performing the---- role of management.
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controlling
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f. CPAs audit the------ statements of public companies.
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financial accounting
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g. Companies must follow GAAP (or International Financial Reporting Standards, IRFS, in the case of companies headquartered in many countries outside of the United States) in their ---------systems.
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financial accounting
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h. Choosing goals and the means to achieve them is the---- function of management.
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planning
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i. Decision makers inside a company are the
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managers
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US companies must follow GAAP (or International Financial Reporting Standards, IFRS, in the case of companies headquartered in many countries outside of the United States) in their -----systems
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financial accounting
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Financial accounting develops reports for external parties such as---- and-----
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shareholders.creditors
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When managers evaluate the company's performance compared to the plan, they are performing the---- role of management.
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controlling
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are decision makers inside a company.
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Managers
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provides information on a company's past performance to external parties.
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Financial accounting
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systems are not restricted by GAAP (or International Financial Reporting Standards, IFRS, in the case of companies headquartered in many countries outside of the United States) but are chosen by comparing the costs versus the benefits of the system.
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Managerial accounting
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Choosing goals and the means to achieve them is the---- function of management.
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planning
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systems report on various segments or business units of the company.(managerial/financial) accounting information
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Managerial accounting
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statements of public companies are audited annually by CPAs(managerial/financial) accounting information
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Financial accounting
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Reporter from The Wall Street Journal
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Financial accounting information
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Regional division managers
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Managerial accounting information
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Potential investors(managerial/financial) accounting information
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Financial accounting information
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Bookkeeping Department
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Financial accounting information
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Manager of the Service Department
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Managerial accounting information
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Wall Street analyst
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Financial accounting information
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Division controller(managerial/financial) accounting information
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Both financial and managerial accounting information
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State tax agency auditor???
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State tax agency auditor
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External auditor‚Äč (public accounting‚Äč firm)
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Financial accounting information
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Loan officer at the‚Äč company's bank
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Financial accounting information
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Board of directors
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Both financial and managerial accounting information
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Internal auditor(managerial/financial) accounting information
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Both financial and managerial accounting information
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SEC examiner(financial/managerial)
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Financial accounting information
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Current stockholders
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Financial accounting information
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Keep information confidential except when disclosure is authorized or legally required
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Confidentiality
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Disclose all relevant information that could reasonably be expected to influence an intended user's understanding of the reports, analyses, or recommendations.
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Credibility
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Disclose delays or deficiencies in information, timeliness, processing, or internal controls in conformance with organization policy and/or applicable law.(integrity/competence/credibility/confidentiality)
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Credibility
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Communicate information fairly and objectively.(integrity/competence/credibility/confidentiality)
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Credibility
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Refrain from using confidential information for unethical or illegal advantage
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Confidentiality
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Inform all relevant parties regarding the appropriate use of confidential information. Monitor subordinates' activities to ensure compliance.(integrity/competence/credibility/confidentiality)
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Confidentiality
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Mitigate actual conflicts of interest. Regularly communicate with business associates to avoid apparent conflicts of interest. Advise all parties of any potential conflicts.((integrity/competence/credibility/confidentiality) )
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Integrity
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Maintain an appropriate level of professional expertise by continually developing knowledge and skills.(integrity/competence/credibility/confidentiality)
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Competence
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Recognize and communicate professional limitations that would preclude responsible judgment or successful performance of an activity.(integrity/competence/credibility/confidentiality)
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Competence
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Perform professional duties in accordance with relevant laws, regulations, and technical standards.(integrity/competence/credibility/confidentiality)
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Competence
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Abstain from engaging in or supporting any activity that might discredit the profession.
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Integrity
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Refrain from engaging in any conduct that would prejudice carrying out duties ethically.
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Integrity
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Provide decision support information and recommendations that are accurate, clear, concise, and timely.
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Competence
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The ----is geared toward producing periodic financial statements that will be used by investors and creditors to make investment and lending decisions.
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financial accounting system
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improves the quality of thought by skillfully analyzing, assessing, and reconstructing initial thoughts.
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Critical thinking
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The goal of producing near perfection with less than 3.4 defects per one million opportunities is called
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Six Sigma
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The----- is the person responsible for raising the firm's capital and investing its funds.
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treasurer
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The three pillars of sustainability are:---- ,------ , and-----
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social/environmental/economic
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The -----is the person responsible for general financial accounting, managerial accounting, and tax reporting.
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controller
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The role of the -----function is to ensure that the company's internal controls and risk management policies are functioning properly.
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internal audit
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The -----------was enacted to restore trust in publicly traded corporations, their management, their financial statements, and their auditors.
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Sarbanes-Oxley Act of 2002
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is a broad holistic report that describes all material elements of value creation, not just the financial elements.
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Integrated report
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is the management process of evaluating the results of business operations against the plan and making adjustments to keep the company pressing toward its goals.
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Controlling
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is the management process of overseeing the company's day-to-day operations.
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Directing
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serves the information needs of people in accounting as well as people in marketing and in the warehouse.
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ERP
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is the ability to meet the needs of the present without compromising the ability of future generations to meet their own needs.
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Sustainability
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The ------ manages the company on a daily basis.
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CEO
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-------- is the management process of setting goals and objectives for the company and determining how to achieve them
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Planning
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typically, the treasurer and the controller report directly to the -----
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CFO
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Which of the following management responsibilities often involves evaluating the results of operations against the‚Äč budget? A. Directing B. Controlling C. Planning D. None of the above
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B. Controlling
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This course is dealing with managerial accounting versus financial accounting. One of the biggest differences between the two is A. managerial accounting is not as important as financial accounting. B. managerial accounting has strict deadlines when it provides information to managers and in financial accounting organiazation issue reports to‚Äč investors, shareholders and creditors when it thinks it is needed. C. managers and other internal organization users will receive various reports to help them achieve their goals and‚Äč objectives, whereas financial accounting deals with a set of financial statements that are provided to external users. D. financial accounting deals with internal reports and managerial accounting deals with making information available to third parties‚Äč (investors, creditors,‚Äč shareholders).
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C. managers and other internal organization users will receive various reports to help them achieve their goals and‚Äč objectives, whereas financial accounting deals with a set of financial statements that are provided to external users.
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Which of the following corporate positions is responsible for general financial‚Äč accounting, managerial‚Äč accounting, and tax‚Äč reporting? A. Chief Operating Officer‚Äč (COO) B. Internal audit C. Controller D. Treasurer
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C. Controller
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Management accountants work with many different groups within a company. This concept is best described‚Äč as? A. Audit Committee B. ‚ÄčCross-functional teams C. Integrity D. Extensible business reporting
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B. ‚ÄčCross-functional teams
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Ethical Standards are critical for management accountants. Which one best relates to‚Äč Competance? A. Inform all relevant parties regarding appropriate use of confidentail information. B. Mitigate actual conflicts of interest. C. Perform professional duties in accordance with‚Äč laws, regulations and technical standards. D. Communicate information fairly and objectively.
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C. Perform professional duties in accordance with‚Äč laws, regulations and technical standards.
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Of the following‚Äč skills, which are needed by‚Äč today's management‚Äč accountants? A. Cost management B. Decision analysis C. Strategic thinking D. All of the above
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D. All of the above
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Due to many organizations reporting fraudulent financial‚Äč statements, companies on certain stock exchanges are required to form an audit committee. An audit committee‚Äč is/does all of the following‚Äč except: A. internal audit reports to the audit committee B. are employees of the company C. ‚Äčsub-set of the Board of Directors D. hire the external auditors
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B. are employees of the company
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Ethical Standards are critical for management accountants. Which one best relates to‚Äč Integrity? A. Communicate information fairly and objectively. B. Inform all relevant parties regarding appropriate use of confidentail information. C. Abstain from engaging in or supporting any activity that might discredit the profession. D. Monitoring‚Äč subordinates' activities to ensure compliance with confidential information.
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C. Abstain from engaging in or supporting any activity that might discredit the profession.
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Communicate information fairly and objectively.(integrity/competence/credibility/confidentiality)
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Credibility
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Recognize and communicate professional limitations that would preclude responsible judgment or successful performance of an activity.(integrity/competence/credibility/confidentiality)
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Competence
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Mitigate actual conflicts of interest. Regularly communicate with business----- associates to avoid apparent conflicts of interest. Advise all parties of any potential conflicts.
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Integrity
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Provide decision support information and recommendations that are accurate, clear, concise, and timely.(integrity/competence/credibility/confidentiality)
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Competence
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Abstain from engaging in or supporting any activity that might discredit the profession.
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Integrity
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Disclose all relevant information that could reasonably be expected to influence an intended user's understanding of the reports, analyses, or recommendations.(integrity/competence/credibility/confidentiality)
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Credibility
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Inform all relevant parties regarding the appropriate use of confidential information. Monitor subordinates' activities to ensure compliance.(integrity/competence/credibility/confidentiality)
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Confidentiality
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Perform professional duties in accordance with relevant laws, regulations, and----- technical standards.
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Competence
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Refrain from engaging in any conduct that would prejudice carrying out duties ethically.
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Integrity
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Keep information confidential except when disclosure is authorized or legally required.
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Confidentiality
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Disclose delays or deficiencies in information, timeliness, processing, or internal controls in conformance with organization policy and/or applicable law.(integrity/competence/credibility/confidentiality)
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Credibility
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Refrain from using confidential information for unethical or illegal advantage.
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Confidentiality
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Maintain an appropriate level of professional expertise by continually developing knowledge and skills.
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-Competence
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‚ÄčManagers' responsibilities in an organization include decision making and continuous feedback. Of the three direct responsibilities of a‚Äč manager, which one covered comparing the actual results to the budget the manger is responsible‚Äč for? A. Planning B. Controlling C. Directing D. Decision making
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B. Controlling
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This course is dealing with managerial accounting versus financial accounting. One of the biggest differences between the two is A. managers and other internal organization users will receive various reports to help them achieve their goals and‚Äč objectives, whereas financial accounting deals with a set of financial statements that are provided to external users. B. financial accounting deals with internal reports and managerial accounting deals with making information available to third parties‚Äč (investors, creditors,‚Äč shareholders). C. managerial accounting is not as important as financial accounting. D. managerial accounting has strict deadlines when it provides information to managers and in financial accounting organiazation issue reports to‚Äč investors, shareholders and creditors when it thinks it is needed
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managers and other internal organization users will receive various reports to help them achieve their goals and‚Äč objectives, whereas financial accounting deals with a set of financial statements that are provided to external users.
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In the‚Äč future, after‚Äč graduation, you will end up working with various individuals accross the‚Äč organization, not just employees in your own department. What term is best associated with‚Äč this? A. Board of directors B. groups C. accounting department D. ‚Äčcross-functional teams
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D. ‚Äčcross-functional teams
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Which of the following is false‚Äč? A. Globalization has increased the necessity for more detailed and accurate cost information. B. The triple bottom line focuses on three‚Äč items: net‚Äč income, net‚Äč assets, and return on investment. C. ERP systems integrate information from all company functions into a centralized data warehouse. D. Lean operations is a philosophy and business strategy of operating without waste.
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B. The triple bottom line focuses on three‚Äč items: net‚Äč income, net‚Äč assets, and return on investment.
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report three types of inventory on the balance sheet
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Manufacturing companies
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for a company such as Best Buy‚Äč (consumer electronics) includes all of the costs necessary to purchase products and get them onto the store shelves.
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Inventory (merchandise)
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Most‚Äč for-profit organizations can be described as being in one‚Äč (or more) of three‚Äč categories:
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service companies, merchandising companies, and manufacturing companies
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is composed of goods partially through the manufacturing process‚Äč (not finished‚Äč yet).
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Work in process inventory
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Forever‚Äč 21, Target, and‚Äč Kohl's are all examples of .
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merchandising companies
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typically do not have an inventory account.
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Service companies
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Johnson‚Äč & Johnson, a personal care products‚Äč manufacturer, converts ----- into finished products.
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raw materials inventory
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A law‚Äč office, an advertising‚Äč agency, and a hospital are all examples of
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service companies
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buy products in bulk from‚Äč producers, marks them‚Äč up, and resell to retailers.
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Wholesalers
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are the costs of transforming direct materials into finished goods.
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Conversion costs
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include‚Äč R&D, marketing, distribution and customer service costs.
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Period costs
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Direct material plus direct labor equals
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prime costs
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Steel, tires,‚Äč engines, upholstery,‚Äč carpet, and dashboard instruments are used in the assembly of a car. Since the manufacturer can trace the cost of these materials‚Äč (including freight-in and import‚Äč duties) to specific units or batches of‚Äč vehicles, they are considered ------ of the vehicles
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direct costs
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Costs that can be directly traced to‚Äč a(n) ----- are called -----
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cost object/direct costs
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---- are initially treated as ----- on the balance sheet.
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Product costs/assets
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The allocation process results in a less precise cost figure being ---- to the ------
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assigned/cost objects
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------ cannot be directly traced to‚Äč a(n) ------
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Indirect costs/cost object
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------ include the costs of all resources used throughout the value chain.
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Total costs
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U.S. GAAP requires companies to use only ------ for inventory reported on external financial statements.
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product costs
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‚ÄčCompany-paid ----- may include health‚Äč insurance, retirement plan‚Äč contributions, payroll‚Äč taxes, and paid vacations.
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fringe benefits
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When manufacturing companies sell their finished‚Äč products, the costs of those finished products are removed from inventory and expensed as ------
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cost of goods sold
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Property taxes‚ÄĒ30% of building is used for sales, marketing, and administrative offices ???
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period cost/ null
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Property taxes‚ÄĒ70% of building is used for manufacturing
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product cost/ MOH
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Wages and benefits paid to assembly-line workers in the manufacturing plant
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product cost/DL
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Depreciation on automated production equipment
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product cost/MOH
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Salaries paid to quality control inspectors in the plant
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product cost/MOH
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Repairs and maintenance on factory equipment
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product cost/MOH
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Standard packaging materials used to package individual units of product for sale (for example, cereal boxes in which cereal is packaged)
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product cost/DM
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Lease payment on administrative headquarters
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period cost/null
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Telecommunications costs for the customer service call center
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period cost/null
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Newspaper advertisements A.R&D B.Design C.Purchases D.Marketing E.Distribution F.Costumer service
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D.Marketing
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Payment to consultant for advice on location for new store A.R&D B.Design C.Purchases D.Marketing E.Distribution F.Costumer service
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A.R&D
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Purchases of merchandise A.R&D B.Design C.Purchases D.Marketing E.Distribution F.Costumer service
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C.Purchases
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Freight-in A.R&D B.Design C.Purchases D.Marketing E.Distribution F.Costumer service
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C.Purchases
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Salespeople's salaries A.R&D B.Design C.Purchases D.Marketing E.Distribution F.Costumer service
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D.Marketing
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Depreciation expense on delivery trucks A.R&D B.Design C.Purchases D.Marketing E.Distribution F.Costumer service
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E.Distribution
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Research on selling satellite radio service A.R&D B.Design C.Purchases D.Marketing E.Distribution F.Costumer service
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A.R&D
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Customer Complaint Department A.R&D B.Design C.Purchases D.Marketing E.Distribution F.Costumer service
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F.Costumer service
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Rearranging store layout A.R&D B.Design C.Purchases D.Marketing E.Distribution F.Costumer service
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B.Design
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Which of the following types of companies would have work in process‚Äč inventory? A. Service B. Merchandising C. Manufacturing D. All of the above
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C. Manufacturing
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‚ÄčKohl's Department‚Äč Store, a clothing and home goods‚Äč store, is primarily what type of‚Äč company? A. Retailer B. Manufacturer C. Service D. Real estate
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A. Retailer
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Which box on the value chain captures the cost of building a prototype of the‚Äč product? A. Marketing B. Distribution C. Design D. Production or Purchases
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C. Design
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Lucky Cow Dairy provided the following expense information for‚Äč May: Assembly‚ąíline ‚Äčworkers' wages Caps for milk bottles Reconfiguring the assembly line Customer support hotline Delivery expenses to customers Depreciation on factory equipment Plastic milk bottles Salaries of salespeople Salaries of research scientists Customer toll‚ąífree order line What is the total cost for the production category of the value‚Äč chain?
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= assembly line workers wages + caps for milk bottle + depreciation on factory equipments + plastic milk bottles
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Which of the following is not an example of an indirect cost incurred in manufacturing‚Äč automobiles? A. Machinery depreciation in the factory B. Cost of the automobile engines C. Plant utilities D. Plant supervisor salary
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B. Cost of the automobile engines
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The value chain describes the costs associated with making a product. What box captures the costs to build the‚Äč product; the inventory related costs‚Äč ("inventoriable product‚Äč costs") that is used for reporting inventory on the balance sheet until it is sold and then is reported as Costs of Goods Sold on the income‚Äč statement? A. Production or Purchases B. Marketing C. All of them D. Reserach‚Äč & Development
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A. Production or Purchases
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An assembly line worker in the factory would be‚Äč considered? A. direct materials. B. period costs. C. direct labor. D. indirect labor and manufacturing overhead.
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C. direct labor.
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Utilites and propert taxes for the plant factory would be‚Äč considered? A. manufacturing overhead. B. direct materials. C. direct labor. D. indirect labor and manufacturing overhead.
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A. manufacturing overhead.
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Country Furniture Company manufactures furniture at its‚Äč Akron, Ohio, factory. Some of its costs from the past year‚Äč include: Depreciation on sales office Depreciation on factory equipment Factory supervisor salary Sales commissions Lubricants used in factory equipment Insurance costs for factory Wages paid to maintenance workers Fabric used to upholster furniture Freight‚ąíin ‚Äč(on raw‚Äč materials) Costs of delivery to customers Wages paid to assembly‚ąíline workers Lumber used to build product Utilities in factory Utilities in sales office Manufacturing overhead costs for Country Furniture Company totaled
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Factory supervisor salary+Lubricants used in factory equipment+insurance+ages paid to maintenance workers+Utilities in factory+Depreciation on factory equipment =
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Progressive Insurance Company sells insurance polices and related products. Profressive Insurance Company is primarily what type of‚Äč company? A. Manufacturer B. Retailer C. Service D. Real estate
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C. Service
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Which element of the value chain would a technical support hotline for customers be‚Äč considered? A. Marketing B. Distribution C. Design D. Customer service
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D. Customer service
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A cost that can be traced to a cost object is known as‚Äč a(n) A. period cost. B. indirect cost. C. product cost. D. direct cost.
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D. direct cost.
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The value chain describes the costs associated with making a product. What‚Äč box(es) are expensed immediately when incurred on the income statement as operating‚Äč expenses/SGA ("period‚Äč costs")? A. Production or Purchases B. All of them C. Marketing D. All of‚Äč them, except production or purchases
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D. All of‚Äč them, except production or purchases
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An assembly line worker in the factory would be‚Äč considered? A. direct materials. B. period costs. C. indirect labor and manufacturing overhead. D. direct labor.
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D. direct labor.
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Rent paid for the plant factory would be‚Äč considered? A. manufacturing overhead. B. direct labor. C. direct materials. D. indirect labor and manufacturing overhead.
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A. manufacturing overhead.
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Costs of Goods Sold of a manufacturing represents the costs related to building a product that are expensed when it is sold. To determine Costs of Goods‚Äč Sold, three formulas where used representing the three different categories of inventory. Which schedule is based on work in process‚Äč inventory? A. Cost of Goods Sold B. Costs of Goods Manufactured C. Income Statement D. Direct Materials Used
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B. Costs of Goods Manufactured
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Janitorial services company Job costing/process costing
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Job costing
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Soup manufacturer Job costing/process costing
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Process costing
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Commercial plumbing contractor Job costing/process costing
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Job costing
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Toothpaste manufacturer Job costing/process costing
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Process costing
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Catering service Job costing/process costing
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Job costing
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Shipbuilder Job costing/process costing
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Job costing
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Company providing Web design services (Job costing/process costing)
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Job costing
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Medical practice of six doctors and four physician assistants Job costing/process costing
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Job costing
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Soft drink bottler Job costing/process costing
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Process costing
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Movie studio Job costing/process costing
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Job costing
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Plastic bottle manufacturer Job costing/process costing
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Process costing
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Architect Job costing/process costing
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Job costing
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Temporary staffing agency Job costing/process costing
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Job costing
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Oil refinery Job costing/process costing
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Process costing
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A(n) ----- is used to accumulate all of the costs affiliated with each job.
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job cost record
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All direct laborers in the factory fill out‚Äč a(n) ------.
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labor time record
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The accounting department will not pay‚Äč a(n) ----- unless it agrees with the quantity of parts both ordered and received.
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invoice
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Each item in the raw materials storeroom has its own -----
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raw materials record .
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The ------ is a control for the materials stored in the storeroom. In order to get direct‚Äč materials, a(n) ------ must be presented.
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raw materials record /materials requisition
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Before production‚Äč begins, the‚Äč manufacturer's purchasing department issues ------ to its supplier for needed direct materials.
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purchase orders
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‚ÄčA(n) ------ is typically a duplicate of the purchase order but without the quantity‚Äč pre-listed on the form.
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receiving report
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The ------ is like a list of ingredients in a‚Äč recipe, stating the materials needed to produce a product.
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bill of materials
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For which of the following would job costing not be‚Äč appropriate? A. Manufacturer of‚Äč custom-ordered production equipment B. Manufacturer of‚Äč mass-produced carbonated beverages C. Electrician D. Law firm
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B. Manufacturer of‚Äč mass-produced carbonated beverages
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Which of the following documents specifies the materials needed to produce a‚Äč job? A. Raw materials records B. Bill of materials C. Receiving report D. Production schedule
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B. Bill of materials
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The amount of manufacturing overhead recorded on a job cost record for a particular job is found by A. allocating manufacturing overhead to the job. B. tracing manufacturing overhead to the job. C. either tracing or allocating manufacturing overhead costs‚Äč (management's choice). D. None of the answers listed is correct.
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A. allocating manufacturing overhead to the job.
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Which statement is FALSE regarding Manufacturing‚Äč Overhead? A. Examples of manufacturing overhead include costs of raw‚Äč materials, assembly line‚Äč workers, and other costs to produce the product. B. Examples of manufacturing overhead‚Äč include: plant‚Äč supervision, depreciation of plant and factory‚Äč equipment, insurance and taxes on the‚Äč plant, indirect materials and indirect labor. C. Manufactuirng overhead includes manufacturing costs of making the‚Äč product, that are not direct materials and direct labor. D. Manufacturing overhead can include indirect materials and indirect labor‚Äč (supervision, janitorial,‚Äč engineers, etc.)
answer
A. Examples of manufacturing overhead include costs of raw‚Äč materials, assembly line‚Äč workers, and other costs to produce the product.
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When allocating manufacturing overhead using a predetermined manufacturing overhead‚Äč rate, ______ can be used as a basis for allocation. A. machine hours B. direct labor costs C. direct labor hours D. all of the above can be used
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D. all of the above can be used
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A. allocated overhead all year long is less than the actual manacturing overhead at year end B. estimated overhead at the beginning of the year is greater than the actual manacturing overhead at year end C. estimated overhead at the beginning of the year is less than the actual manacturing overhead at year end D. allocated overhead all year long is greater than the actual manacturing overhead at year end
answer
A. allocated overhead all year long is less than the actual manacturing overhead at year end
question
Chapter 3 discusses job costing. Process costing was briefly discussed. Which company listed below would most likely use process costing. A. Engineering firm B. Law firm C. custom jewelry maker D. soda pop manufacturer
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D. soda pop manufacturer
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Which of the following documents specifies the materials needed to produce a‚Äč job? A. Production schedule B. Raw materials records C. Receiving report D. Bill of materials
answer
D. Bill of materials
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When allocating MANUFACTURING OVERHEAD to a job..... A. it should be allocated based on the predetermined manufacturing overhead rate at the end of the year for all jobs. B. it should be allocated based on the indirect cost allocation rate. C. it should be allocated based on the predetermined manufacting overhead rate when the job is being completed. D. manufacturing overhead should not be allocated to any jobs and it is expensed as it is incurred.
answer
C. it should be allocated based on the predetermined manufacting overhead rate when the job is being completed.
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Which statement is FALSE regarding Manufacturing‚Äč Overhead? A. Manufactuirng overhead includes manufacturing costs of making the‚Äč product, that are not direct materials and direct labor. B. Examples of manufacturing overhead‚Äč include: plant‚Äč supervision, depreciation of plant and factory‚Äč equipment, insurance and taxes on the‚Äč plant, indirect materials and indirect labor. C. Manufacturing overhead can include indirect materials and indirect labor‚Äč (supervision, janitorial,‚Äč engineers, etc.) D. Examples of manufacturing overhead include costs of raw‚Äč materials, assembly line‚Äč workers, and other costs to produce the product.
answer
D. Examples of manufacturing overhead include costs of raw‚Äč materials, assembly line‚Äč workers, and other costs to produce the product.
question
In job‚Äč costing, what is included in the cost of a‚Äč job? A. manufacturing overhead B. direct‚Äč materials, direct labor and manufacturing overhead C. direct labor and manufacturing overhead D. direct materials and direct labor
answer
B. direct‚Äč materials, direct labor and manufacturing overhead
question
‚ÄčUnderallocated/undercosted overhead occurs when A. allocated overhead all year long is greater than the actual manacturing overhead at year end B. allocated overhead all year long is less than the actual manacturing overhead at year end C. estimated overhead at the beginning of the year is greater than the actual manacturing overhead at year end D. estimated overhead at the beginning of the year is less than the actual manacturing overhead at year end
answer
B. allocated overhead all year long is less than the actual manacturing overhead at year end
question
What is the difference between a service firm and a‚Äč manufacturer? A. service firms allocate indirect period costs and a manufacturer allocates manufacturing overhead B. the cost of a job for a service firm consists of direct labor and indirect costs and a cost of a job for a manufacturer consists of direct‚Äč materials, direct labor and manufacturing overhead C. a service firms largest cost of a job is labor where as a typical manufacturer direct labor is not the largest component but only part of the total cost of a job. D. All of the above are differences between a service firm and a manufacturer
answer
D. All of the above are differences between a service firm and a manufacturer
question
1. Patents are obtained for each new type of container mold.
answer
Product-level
question
2 Each type of container has its own unique molds.
answer
Product-level
question
3. Routine maintenance is performed on the extrusion machines.
answer
Facility-level
question
4. The sales force incurs travel expenses to attend various trade shows throughout the country to market the containers.
answer
Facility-level
question
5. Plastic resins are used as the main direct material for the containers.
answer
Unit-Level
question
6. The extrusion machine is calibrated for each batch of containers made.
answer
Batch-level
question
7 A plant manager oversees the entire manufacturing operation.
answer
Facility-level
question
8. Rent is paid for the building that houses the manufacturing processes.
answer
Facility-level
question
9. Each container product line has a product line manager.
answer
Product-level
question
10. Each container is cut from the mold once the plastic has cooled and hardened.
answer
Unit-Level
question
1. In bidding for‚Äč jobs, managers lost bids they expected to win and won bids they expected to lose.
answer
More likely to benefit.
question
2. The company operates in a very competitive industry.
answer
More likely to benefit.
question
3. The company produces few‚Äč products, and the products consume resources in a similar manner.
answer
Less likely to benefit.
question
4. The company has very few indirect costs.
answer
Less likely to benefit.
question
5. The company produces high volumes of some of its products and low volumes of other products.
answer
More likely to benefit.
question
6 The company has reengineered its production process but has not changed its accounting system. They are
answer
More likely to benefit.
question
a. There is an emphasis on building in quality.
answer
Lean production
question
b. The final operation in the production sequence‚Äč "pulls" parts from the preceding operation.
answer
Lean production
question
c. Employees do a variety of‚Äč jobs, including maintenance and setups as well as operation of machines.
answer
Lean production
question
d. Suppliers make frequent deliveries of small quantities of raw materials- this is what type of production.
answer
Lean production
question
e. Each employee is responsible for inspecting his or her own work.
answer
Lean production
question
f. Suppliers can access the‚Äč company's intranet.
answer
Lean production
question
g. Large stocks of finished goods protect against lost sales if customer demand is higher than expected.
answer
Traditional production
question
h. The workflow is continuous to attempt to balance the rate of production with the rate of demand.(which type of production)
answer
Lean production
question
i. Setup times are long.
answer
Traditional production
question
j. A workplace organization system called‚Äč "5S" is frequently used to keep work spaces clean and organized. What type of production?
answer
Lean production
question
k. The manufacturing cycle times are longer.
answer
Traditional production
question
l. Management works with suppliers to ensure‚Äč defect-free raw materials.
answer
Lean production
question
m. Products are produced in large batches.
answer
Traditional production
question
Strength-testing one item from each batch of panels
answer
Appraisal
question
Training employees in TQM
answer
Prevention
question
xTraining suppliers in TQM
answer
Prevention
question
Identifying preferred suppliers who commit to on-time delivery of perfect quality materials
answer
Prevention
question
Avoid lost profits from lost sales due to disappointed customers
answer
External failure
question
Avoid rework and spoilage
answer
Internal failure
question
Avoid inspection of raw materials
answer
Appraisal
question
Avoid warranty costs
answer
External failure
question
a. The time that elapses between the start of production and the‚Äč product's completion is known as .
answer
manufacturing cycle time
question
b. is the management philosophy and strategy focused on creating value for the customer by eliminating waste.
answer
Lean thinking
question
c. The costs incurred for every‚Äč batch, regardless of the number of units in the‚Äč batch, are known as .
answer
batch-level costs
question
d. Costs incurred to avoid‚Äč poor-quality good or services are . .
answer
prevention costs
question
e. Using‚Äč activity-based costing information to make decisions that increase profits while satisfying‚Äč customers' needs is .
answer
activity-based management
question
f. An acronym for the eight wastes is .
answer
DOWNTIME
question
g. The costs incurred for a particular‚Äč product, regardless of the number of units or batches of the product‚Äč produced, are known as .
answer
product-level costs
question
h. focuses on activities as fundamental building blocks in compiling the indirect costs of‚Äč products, services, and customers.
answer
Activity-based costing
question
i. are costs incurred when defects in‚Äč poor-quality goods or services are corrected before making delivery to customers.
answer
Internal failure costs
question
j. are incurred for every single unit of product produced.
answer
Unit-level costs
question
k. Costs incurred when the company does not detect‚Äč poor-quality goods or services until after delivery is made to customers are .
answer
external failure costs
question
l. are costs incurred no matter how many‚Äč units, batches, or products are produced.
answer
Facility-level costs
question
m. is a Japanese word meaning‚Äč "change for the‚Äč better."
answer
Kaizen
question
n. Costs incurred to detect‚Äč poor-quality goods or services are . .
answer
appraisal costs
question
o. The rate of production needed to meet customer demand yet avoid overproduction is known as .
answer
takt time
question
p. is a storage system used to reduce the waste of transportation and‚Äč movement, in which‚Äč tools, materials, and equipment are stored in proximity to where they will be used most frequently.
answer
POUS
question
q. is a management philosophy of delighting customers with superior products and services by continually setting higher goals and improving every business function
answer
TQM
question
Companies often refine their cost allocation systems to minimize the amount of cost distortion caused by the simpler cost allocation systems. True False
answer
True
question
Cost distortion is more likely to occur when A. all products require the same amount and type of processing activities. B. a company uses departmental overhead rates rather than a single plantwide overhead rate. C. a company manufactures one type of product. D. departments incur different types of overhead and the products or jobs use the departments to a different extent.
answer
D. departments incur different types of overhead and the products or jobs use the departments to a different extent.
question
Traditional costing systems are generally more accurate than ABC costing. True False
answer
False
question
Which of the following is‚Äč true? A. ‚ÄčValue-added activities are also referred to as waste activities. B. ABC is only applicable to manufacturers. C. ABM refers to using‚Äč activity-based cost information to make decisions. .D. The goal of ABM is to decrease the amount of‚Äč value-added activities.
answer
C. ABM refers to using‚Äč activity-based cost information to make decisions.
question
Managers often reap benefits by using ABC data in ABM to pinpoint opportunities to cut costs. True False
answer
True
question
Lean companies typically crossminus‚ąítrain employees to perform more than one task. True False
answer
True
question
Which of the following is not one of the costs of quality‚Äč categories? A. Appraisal costs B. Transportation costs C. External failure costs D. Prevention costs
answer
B. Transportation costs
question
On a Cost of Quality‚Äč report, which of the following cost items should be classified as an external failure‚Äč cost? A. Customer returns of defective products B. Technical support provided to suppliers C. Supplies used in the quality inspection program D. Net cost of scrap
answer
A. Customer returns of defective products
question
When is Exam‚Äč 1? A. Wednesday‚Äč - Friday, ‚Äč 9/27 -‚Äč 9/29 B. Monday‚Äč - Wednesday, ‚Äč 9/25 -‚Äč 9/27 C. Monday‚Äč - Friday, ‚Äč 9/25 -‚Äč 9/29 D. Tuesday‚Äč - Thursday, ‚Äč 9/26 -‚Äč 9/28
answer
D. Tuesday‚Äč - Thursday, ‚Äč 9/26 -‚Äč 9/28
question
As a result of cost‚Äč distortion, some products will be overcosted while other products will be undercosted. True False
answer
True
question
The first step in computing and using ABC is which of the‚Äč following? A. Allocating some MOH to each job B. Identifying the‚Äč company's primary activities C. Selecting appropriate allocation bases D. Calculating activity cost allocation rates
answer
B. Identifying the‚Äč company's primary activities
question
The potential benefits of‚Äč ABC/ABM are generally higher for companies that A. have low manufacturing overhead costs. B. are in noncompetitive markets. C. produce high volumes of some products and low volumes of other products. D. produce one product.
answer
C. produce high volumes of some products and low volumes of other products.
question
One key element of lean production is to produce large batches. True False
answer
False
question
Concerning lean‚Äč operations, which of the following is false‚Äč? A. Can leave companies vulnerable to‚Äč supply-chain disruptions B. Focus on internal and external waste C. Are quickly becoming the dominant business paradigm D. Can be found in all‚Äč sectors, not just manufacturing
answer
B. Focus on internal and external waste
question
Which of the following is an example of a cost item that should be classified as an internal failure‚Äč cost? A. Employee training costs B. Inspection costs C. Rework costs D. Product return costs
answer
C. Rework costs
question
Reporter from The Wall Street Journal (financial/managerial/both)
answer
financial
question
Regional division managers (financial/managerial/both)
answer
managerial
question
Potential investors (financial/managerial/both)
answer
financial
question
Bookkeeping Department (financial/managerial/both)
answer
financial
question
Manager of the Service Department (financial/managerial/both)
answer
managerial
question
Wall Street analyst (financial/managerial/both)
answer
financial
question
Division controller (financial/managerial/both)
answer
both
question
State tax agency auditor (financial/managerial/both)
answer
financial
question
External auditor‚Äč (public accounting‚Äč firm) (financial/managerial/both)
answer
financial
question
Loan officer at the‚Äč company's bank (financial/managerial/both)
answer
financial
question
Board of directors (financial/managerial/both)
answer
both
question
Internal auditor (financial/managerial/both)
answer
both
question
SEC examiner (financial/managerial/both)
answer
financial
question
Current stockholders (financial/managerial/both)
answer
finncial
question
Disclose all relevant information that could reasonably be expected to influence an intended user's understanding of the reports, analyses, or recommendations. (credibility,integrity,confidentiality)
answer
credibility