Chapter 4 Quiz

ABC generally causes the least amount of cost distortion among products because indirect costs are allocated to the products based on: A. the extent to which the activities are used B. types of activities used by the product C. both A and B D. none of the above

C. both A and B

Which of the following is a result of cost distortion? A. overcosting of all products B. undercosting of all products C. overcosting of some products and undercosting of other products D. accurate costing of all products

C. overcosting of some products and undercosting of other products

Which of the following is true about lean thinking?

Customer orders drive the production process.

Indications that a product cost system needs revision include A. employees do not believe the cost numbers are accurate B. the company uses a single-allocation-base system developed long ago C. managers lose bids they expected to win and win bids they expected to lose D. all of the above

D. all of the above

If a company were to increase its appraisal costs by inspecting more units as the units are completed, the company's external failure costs would likely

Decrease

Which term listed below describes a system where companies purchase raw materials when needed in production and complete finished goods when needed by customers?

Just-in-time

The eight wastes of traditional operations includes all of the following except

utilizing people to their full potential.