Accounting 2020 Exam 2

MC A lean company aims to eliminate which of the following wastes of the traditional operating company?

DOWNTIME

MC Using factory utilities would most likely be classified as a ________ cost.

Facility-level

TF Unique or Custom made goods use a process costing system.

False

TF department overhead rates are less accurate than single plantwide overhead rates

False

MC Molding and sanding each unit of product would most likely be classified as a ________ cost.

Unit-level

MC Four basic steps are used in an ABC system. List the proper order of these steps, which are currently scrambled below:

a. Identify the primary activities and estimate a total cost pool for each b.select an allocation base for each activity c.calculate an activity cost allocation rate for each activity d. Allocate the costs to the cost object using the activity allocation rate

MC What does direct labor costs plus Manufacturing Overhead equal

conversion costs

MC Which of the following condition(s) favors using departmental overhead rates in place of a plantwide overhead rate?

different departments incur different amounts and types of manufacturing overhead

TF Value added activities are activities that could be reduced or removed from the process with no ill effect on the end product or service

false

TF direct labor hours would be the most appropriate cost allocation base for a Machining Department that uses machine robotics extensively.

false

MC Which of the following is not a factor in the success of a lean company?

Inflexible production operations

TF Direct materials are often added at a particular point in the production process.

true

TF Equivalent units express the amount of work done during a period of time in terms of fully completed units of output.

true

TF In process costing, the costs flow from Raw Materials Inventory, to Work In Process Inventory, to Finished Goods Inventory.

true

TF Lean companies typically emphasize quality.

true

TF Managers often reap benefits by using ABC data in ABM to pinpoint opportunities to cut costs.

true

TF Merchandising and service companies, as well as governmental agencies, can use refined cost allocation systems to provide their managers with better cost information.

true

TF The benefits of adopting ABC/ABM are higher for companies in more competitive markets.

true

TF it is easier to allocate indirect costs to the products that actually caused those costs if an ABC system is used rather than a traditional costing system.

true