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