financial accounting Exam 1

a.
Information on a company’s past performance is provided to external parties by

financial accounting

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).

Managerial accounting

c.

systems report on various segments or business units of the company.

Managerial accounting

d.
Financial accounting develops reports for external parties such as
—–
and——

creditors,shareholders

e.
When managers evaluate the company’s performance compared to the plan, they are performing the—- role of management.

controlling

f.
CPAs audit the—— statements of public companies.

financial accounting

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.

financial accounting

h.
Choosing goals and the means to achieve them is the—- function of management.

planning

i.
Decision makers inside a company are the

managers

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

financial accounting

Financial accounting develops reports for external parties such as—-
and—–

shareholders.creditors

When managers evaluate the company’s performance compared to the plan, they are performing the—-
role of management.

controlling

are decision makers inside a company.

Managers

provides information on a company’s past performance to external parties.

Financial accounting

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.

Managerial accounting

Choosing goals and the means to achieve them is the—-
function of management.

planning

systems report on various segments or business units of the company.(managerial/financial) accounting information

Managerial accounting

statements of public companies are audited annually by CPAs(managerial/financial) accounting information

Financial accounting

Reporter from The Wall Street Journal

Financial accounting information

Regional division managers

Managerial accounting information

Potential investors(managerial/financial) accounting information

Financial accounting information

Bookkeeping Department

Financial accounting information

Manager of the Service Department

Managerial accounting information

Wall Street analyst

Financial accounting information

Division controller(managerial/financial) accounting information

Both financial and managerial accounting information

State tax agency auditor???

State tax agency auditor

External auditor​ (public accounting​ firm)

Financial accounting information

Loan officer at the​ company’s bank

Financial accounting information

Board of directors

Both financial and managerial accounting information

Internal auditor(managerial/financial) accounting information

Both financial and managerial accounting information

SEC examiner(financial/managerial)

Financial accounting information

Current stockholders

Financial accounting information

Keep information confidential except when disclosure is authorized or legally required

Confidentiality

Disclose all relevant information that could reasonably be expected to influence
an intended user’s understanding of the reports, analyses, or recommendations.

Credibility

Disclose delays or deficiencies in information, timeliness, processing, or internal
controls in conformance with organization policy and/or applicable law.(integrity/competence/credibility/confidentiality)

Credibility

Communicate information fairly and objectively.(integrity/competence/credibility/confidentiality)

Credibility

Refrain from using confidential information for unethical or illegal advantage

Confidentiality

Inform all relevant parties regarding the appropriate use of confidential
information. Monitor subordinates’ activities to ensure compliance.(integrity/competence/credibility/confidentiality)

Confidentiality

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) )

Integrity

Maintain an appropriate level of professional expertise by continually developing
knowledge and skills.(integrity/competence/credibility/confidentiality)

Competence

Recognize and communicate professional limitations that would preclude
responsible judgment or successful performance of an activity.(integrity/competence/credibility/confidentiality)

Competence

Perform professional duties in accordance with relevant laws, regulations, and
technical standards.(integrity/competence/credibility/confidentiality)

Competence

Abstain from engaging in or supporting any activity that might discredit the
profession.

Integrity

Refrain from engaging in any conduct that would prejudice carrying out duties
ethically.

Integrity

Provide decision support information and recommendations that are accurate,
clear, concise, and timely.

Competence

The
—-is geared toward producing periodic financial statements that will be used by investors
and creditors to make investment and lending decisions.

financial accounting system

improves the quality of thought by skillfully analyzing, assessing, and reconstructing
initial thoughts.

Critical thinking

The goal of producing near perfection with less than 3.4 defects per one million opportunities is called

Six Sigma

The—–
is the person responsible for raising the firm’s capital and investing its funds.

treasurer

The three pillars of sustainability are:—-
,——
, and—–

social/environmental/economic

The
—–is the person responsible for general financial accounting, managerial accounting,
and tax reporting.

controller

The role of the
—–function is to ensure that the company’s internal controls and risk
management policies are functioning properly.

internal audit

The
———–was enacted to restore trust in publicly traded corporations, their management, their
financial statements, and their auditors.

Sarbanes-Oxley Act of 2002

is a broad holistic report that describes all material elements of value creation, not just the
financial elements.

Integrated report

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.

Controlling

is the management process of overseeing the company’s day-to-day operations.

Directing

serves the information needs of people in accounting as well as people in marketing and
in the warehouse.

ERP

is the ability to meet the needs of the present without compromising the ability of future
generations to meet their own needs.

Sustainability

The ——
manages the company on a daily basis.

CEO

——–
is the management process of setting goals and objectives for the company and determining
how to achieve them

Planning

typically, the treasurer and the controller report directly to the
—–

CFO

Which of the following management responsibilities often involves evaluating the results of operations against the​ budget?
A.
Directing
B.
Controlling
C.
Planning
D.
None of the above

B. Controlling

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​ 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​ 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​ (investors, creditors,​ shareholders).

C. managers and other internal organization users will receive various reports to help them achieve their goals and​ objectives, whereas financial accounting deals with a set of financial statements that are provided to external users.

Which of the following corporate positions is responsible for general financial​ accounting, managerial​ accounting, and tax​ reporting?
A.
Chief Operating Officer​ (COO)
B.
Internal audit
C.
Controller
D.
Treasurer

C. Controller

Management accountants work with many different groups within a company. This concept is best
described​ as?
A.
Audit Committee
B.
​Cross-functional teams
C.
Integrity
D.
Extensible business reporting

B. ​Cross-functional teams

Ethical Standards are critical for management accountants. Which one best relates to​ 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​ laws, regulations and technical standards.
D.
Communicate information fairly and objectively.

C. Perform professional duties in accordance with​ laws, regulations and technical standards.

Of the following​ skills, which are needed by​ today’s management​ accountants?
A.
Cost management
B.
Decision analysis
C.
Strategic thinking
D.
All of the above

D. All of the above

Due to many organizations reporting fraudulent financial​ statements, companies on certain stock exchanges are required to form an audit committee. An audit committee​ is/does all of the following​ except:
A.
internal audit reports to the audit committee
B.
are employees of the company
C.
​sub-set of the Board of Directors
D.
hire the external auditors

B. are employees of the company

Ethical Standards are critical for management accountants. Which one best relates to​ 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​ subordinates’ activities to ensure compliance with confidential information.

C. Abstain from engaging in or supporting any activity that might discredit the profession.

Communicate information fairly and objectively.(integrity/competence/credibility/confidentiality)

Credibility

Recognize and communicate professional limitations that would preclude
responsible judgment or successful performance of an activity.(integrity/competence/credibility/confidentiality)

Competence

Mitigate actual conflicts of interest. Regularly communicate with business—–
associates to avoid apparent conflicts of interest. Advise all parties of any
potential conflicts.

Integrity

Provide decision support information and recommendations that are accurate, clear, concise, and timely.(integrity/competence/credibility/confidentiality)

Competence

Abstain from engaging in or supporting any activity that might discredit the profession.

Integrity

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)

Credibility

Inform all relevant parties regarding the appropriate use of confidential
information. Monitor subordinates’ activities to ensure compliance.(integrity/competence/credibility/confidentiality)

Confidentiality

Perform professional duties in accordance with relevant laws, regulations, and—–
technical standards.

Competence

Refrain from engaging in any conduct that would prejudice carrying out duties ethically.

Integrity

Keep information confidential except when disclosure is authorized or legally
required.

Confidentiality

Disclose delays or deficiencies in information, timeliness, processing, or internal
controls in conformance with organization policy and/or applicable law.(integrity/competence/credibility/confidentiality)

Credibility

Refrain from using confidential information for unethical or illegal advantage.

Confidentiality

Maintain an appropriate level of professional expertise by continually developing
knowledge and skills.

-Competence

​Managers’ responsibilities in an organization include decision making and continuous feedback. Of the three direct responsibilities of a​ manager, which one covered comparing the actual results to the budget the manger is responsible​ for?
A.
Planning
B.
Controlling
C.
Directing
D.
Decision making

B. Controlling

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​ 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​ (investors, creditors,​ 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​ investors, shareholders and creditors when it thinks it is needed

managers and other internal organization users will receive various reports to help them achieve their goals and​ objectives, whereas financial accounting deals with a set of financial statements that are provided to external users.

In the​ future, after​ graduation, you will end up working with various individuals accross the​ organization, not just employees in your own department. What term is best associated with​ this?
A.
Board of directors
B.
groups
C.
accounting department
D.
​cross-functional teams

D. ​cross-functional teams

Which of the following is false​?
A.
Globalization has increased the necessity for more detailed and accurate cost information.
B.
The triple bottom line focuses on three​ items: net​ income, net​ 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.

B. The triple bottom line focuses on three​ items: net​ income, net​ assets, and return on investment.

report three types of inventory on the balance sheet

Manufacturing companies

for a company such as Best Buy​ (consumer electronics) includes all of the costs necessary to purchase products and get them onto the store shelves.

Inventory (merchandise)

Most​ for-profit organizations can be described as being in one​ (or more) of three​ categories:

service companies, merchandising companies, and manufacturing companies

is composed of goods partially through the manufacturing process​ (not finished​ yet).

Work in process inventory

Forever​ 21, Target, and​ Kohl’s are all examples of

.

merchandising companies

typically do not have an inventory account.

Service companies

Johnson​ & Johnson, a personal care products​ manufacturer, converts
—–
into finished products.

raw materials inventory

A law​ office, an advertising​ agency, and a hospital are all examples of

service companies

buy products in bulk from​ producers, marks them​ up, and resell to retailers.

Wholesalers

are the costs of transforming direct materials into finished goods.

Conversion costs

include​ R&D, marketing, distribution and customer service costs.

Period costs

Direct material plus direct labor equals

prime costs

Steel, tires,​ engines, upholstery,​ carpet, and dashboard instruments are used in the assembly of a car. Since the manufacturer can trace the cost of these materials​ (including freight-in and import​ duties) to specific units or batches of​ vehicles, they are considered ——
of the vehicles

direct costs

Costs that can be directly traced to​ a(n) —–
are called
—–

cost object/direct costs

—- are initially treated as —–
on the balance sheet.

Product costs/assets

The allocation process results in a less precise cost figure being —-
to the
——

assigned/cost objects

—— cannot be directly traced to​ a(n)
——

Indirect costs/cost object

—— include the costs of all resources used throughout the value chain.

Total costs

U.S. GAAP requires companies to use only
——
for inventory reported on external financial statements.

product costs

​Company-paid
—– may include health​ insurance, retirement plan​ contributions, payroll​ taxes, and paid vacations.

fringe benefits

When manufacturing companies sell their finished​ products, the costs of those finished products are removed from inventory and expensed as
——

cost of goods sold

Property taxes—30% of building is used for sales, marketing, and
administrative offices ???

period cost/ null

Property taxes—70% of building is used for manufacturing

product cost/ MOH

Wages and benefits paid to assembly-line workers in the manufacturing plant

product cost/DL

Depreciation on automated production equipment

product cost/MOH

Salaries paid to quality control inspectors in the plant

product cost/MOH

Repairs and maintenance on factory equipment

product cost/MOH

Standard packaging materials used to package individual units of product for
sale (for example, cereal boxes in which cereal is packaged)

product cost/DM

Lease payment on administrative headquarters

period cost/null

Telecommunications costs for the customer service call center

period cost/null

Newspaper advertisements
A.R&D
B.Design
C.Purchases
D.Marketing
E.Distribution
F.Costumer service

D.Marketing

Payment to consultant for advice on location for new store
A.R&D
B.Design
C.Purchases
D.Marketing
E.Distribution
F.Costumer service

A.R&D

Purchases of merchandise
A.R&D
B.Design
C.Purchases
D.Marketing
E.Distribution
F.Costumer service

C.Purchases

Freight-in
A.R&D
B.Design
C.Purchases
D.Marketing
E.Distribution
F.Costumer service

C.Purchases

Salespeople’s salaries
A.R&D
B.Design
C.Purchases
D.Marketing
E.Distribution
F.Costumer service

D.Marketing

Depreciation expense on delivery trucks
A.R&D
B.Design
C.Purchases
D.Marketing
E.Distribution
F.Costumer service

E.Distribution

Research on selling satellite radio service
A.R&D
B.Design
C.Purchases
D.Marketing
E.Distribution
F.Costumer service

A.R&D

Customer Complaint Department
A.R&D
B.Design
C.Purchases
D.Marketing
E.Distribution
F.Costumer service

F.Costumer service

Rearranging store layout

A.R&D
B.Design
C.Purchases
D.Marketing
E.Distribution
F.Costumer service

B.Design

Which of the following types of companies would have work in process​ inventory?
A.
Service
B.
Merchandising
C.
Manufacturing
D.
All of the above

C. Manufacturing

​Kohl’s Department​ Store, a clothing and home goods​ store, is primarily what type of​ company?
A.
Retailer
B.
Manufacturer
C.
Service
D.
Real estate

A. Retailer

Which box on the value chain captures the cost of building a prototype of the​ product?
A.
Marketing
B.
Distribution
C.
Design
D.
Production or Purchases

C. Design

Lucky Cow Dairy provided the following expense information for​ May:
Assembly−line ​workers’ 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−free order line
What is the total cost for the production category of the value​ chain?

= assembly line workers wages + caps for milk bottle + depreciation on factory equipments + plastic milk bottles

Which of the following is not an example of an indirect cost incurred in manufacturing​ automobiles?
A.
Machinery depreciation in the factory
B.
Cost of the automobile engines
C.
Plant utilities
D.
Plant supervisor salary

B. Cost of the automobile engines

The value chain describes the costs associated with making a product. What box captures the costs to build the​ product; the inventory related costs​ ("inventoriable product​ 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​ statement?
A.
Production or Purchases
B.
Marketing
C.
All of them
D.
Reserach​ & Development

A. Production or Purchases

An assembly line worker in the factory would be​ considered?

A.
direct materials.
B.
period costs.
C.
direct labor.
D.
indirect labor and manufacturing overhead.

C. direct labor.

Utilites and propert taxes for the plant factory would be​ considered?
A.
manufacturing overhead.
B.
direct materials.
C.
direct labor.
D.
indirect labor and manufacturing overhead.

A. manufacturing overhead.

Country Furniture Company manufactures furniture at its​ Akron, Ohio, factory. Some of its costs from the past year​ 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−in ​(on raw​ materials)
Costs of delivery to customers
Wages paid to assembly−line workers
Lumber used to build product
Utilities in factory
Utilities in sales office
Manufacturing overhead costs for Country Furniture Company totaled

Factory supervisor salary+Lubricants used in factory equipment+insurance+ages paid to maintenance workers+Utilities in factory+Depreciation on factory equipment =

Progressive Insurance Company sells insurance polices and related products. Profressive Insurance Company is primarily what type of​ company?
A.
Manufacturer
B.
Retailer
C.
Service
D.
Real estate

C. Service

Which element of the value chain would a technical support hotline for customers be​ considered?
A.
Marketing
B.
Distribution
C.
Design
D.
Customer service

D. Customer service

A cost that can be traced to a cost object is known as​ a(n)
A.
period cost.
B.
indirect cost.
C.
product cost.
D.
direct cost.

D. direct cost.

The value chain describes the costs associated with making a product. What​ box(es) are expensed immediately when incurred on the income statement as operating​ expenses/SGA ("period​ costs")?
A.
Production or Purchases
B.
All of them
C.
Marketing
D.
All of​ them, except production or purchases

D. All of​ them, except production or purchases

An assembly line worker in the factory would be​ considered?

A.
direct materials.
B.
period costs.
C.
indirect labor and manufacturing overhead.
D.
direct labor.

D. direct labor.

Rent paid for the plant factory would be​ considered?
A.
manufacturing overhead.
B.
direct labor.
C.
direct materials.
D.
indirect labor and manufacturing overhead.

A. manufacturing overhead.

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​ Sold, three formulas where used representing the three different categories of inventory. Which schedule is based on work in process​ inventory?
A.
Cost of Goods Sold
B.
Costs of Goods Manufactured
C.
Income Statement
D.
Direct Materials Used

B. Costs of Goods Manufactured

Janitorial services company
Job costing/process costing

Job costing

Soup manufacturer
Job costing/process costing

Process costing

Commercial plumbing contractor
Job costing/process costing

Job costing

Toothpaste manufacturer
Job costing/process costing

Process costing

Catering service
Job costing/process costing

Job costing

Shipbuilder
Job costing/process costing

Job costing

Company providing Web design services (Job costing/process costing)

Job costing

Medical practice of six doctors and four physician assistants
Job costing/process costing

Job costing

Soft drink bottler
Job costing/process costing

Process costing

Movie studio
Job costing/process costing

Job costing

Plastic bottle manufacturer
Job costing/process costing

Process costing

Architect
Job costing/process costing

Job costing

Temporary staffing agency
Job costing/process costing

Job costing

Oil refinery
Job costing/process costing

Process costing

A(n)
—– is used to accumulate all of the costs affiliated with each job.

job cost record

All direct laborers in the factory fill out​ a(n)
——.

labor time record

The accounting department will not pay​ a(n)
—– unless it agrees with the quantity of parts both ordered and received.

invoice

Each item in the raw materials storeroom has its own
—–

raw materials record .

The
—— is a control for the materials stored in the storeroom. In order to get direct​ materials, a(n)
—— must be presented.

raw materials record /materials requisition

Before production​ begins, the​ manufacturer’s purchasing department issues
——
to its supplier for needed direct materials.

purchase orders

​A(n)
—— is typically a duplicate of the purchase order but without the quantity​ pre-listed on the form.

receiving report

The
—— is like a list of ingredients in a​ recipe, stating the materials needed to produce a product.

bill of materials

For which of the following would job costing not be​ appropriate?
A.
Manufacturer of​ custom-ordered production equipment
B.
Manufacturer of​ mass-produced carbonated beverages
C.
Electrician
D.
Law firm

B. Manufacturer of​ mass-produced carbonated beverages

Which of the following documents specifies the materials needed to produce a​ job?
A.
Raw materials records
B.
Bill of materials
C.
Receiving report
D.
Production schedule

B. Bill of materials

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​ (management’s choice).
D.
None of the answers listed is correct.

A. allocating manufacturing overhead to the job.

Which statement is FALSE regarding Manufacturing​ Overhead?
A.
Examples of manufacturing overhead include costs of raw​ materials, assembly line​ workers, and other costs to produce the product.
B.
Examples of manufacturing overhead​ include: plant​ supervision, depreciation of plant and factory​ equipment, insurance and taxes on the​ plant, indirect materials and indirect labor.
C.
Manufactuirng overhead includes manufacturing costs of making the​ product, that are not direct materials and direct labor.
D.
Manufacturing overhead can include indirect materials and indirect labor​ (supervision, janitorial,​ engineers, etc.)

A. Examples of manufacturing overhead include costs of raw​ materials, assembly line​ workers, and other costs to produce the product.

When allocating manufacturing overhead using a predetermined manufacturing overhead​ 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

D. all of the above can be used

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

A. allocated overhead all year long is less than the actual manacturing overhead at year end

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

D. soda pop manufacturer

Which of the following documents specifies the materials needed to produce a​ job?
A.
Production schedule
B.
Raw materials records
C.
Receiving report
D.
Bill of materials

D. Bill of materials

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.

C. it should be allocated based on the predetermined manufacting overhead rate when the job is being completed.

Which statement is FALSE regarding Manufacturing​ Overhead?
A.
Manufactuirng overhead includes manufacturing costs of making the​ product, that are not direct materials and direct labor.
B.
Examples of manufacturing overhead​ include: plant​ supervision, depreciation of plant and factory​ equipment, insurance and taxes on the​ plant, indirect materials and indirect labor.
C.
Manufacturing overhead can include indirect materials and indirect labor​ (supervision, janitorial,​ engineers, etc.)
D.
Examples of manufacturing overhead include costs of raw​ materials, assembly line​ workers, and other costs to produce the product.

D. Examples of manufacturing overhead include costs of raw​ materials, assembly line​ workers, and other costs to produce the product.

In job​ costing, what is included in the cost of a​ job?
A.
manufacturing overhead
B.
direct​ materials, direct labor and manufacturing overhead
C.
direct labor and manufacturing overhead
D.
direct materials and direct labor

B. direct​ materials, direct labor and manufacturing overhead

​Underallocated/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

B. allocated overhead all year long is less than the actual manacturing overhead at year end

What is the difference between a service firm and a​ 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​ 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

D. All of the above are differences between a service firm and a manufacturer

1.
Patents are obtained for each new type of container mold.

Product-level

2
Each type of container has its own unique molds.

Product-level

3.
Routine maintenance is performed on the extrusion machines.

Facility-level

4.
The sales force incurs travel expenses to attend various trade shows throughout the country to market the containers.

Facility-level

5.
Plastic resins are used as the main direct material for the containers.

Unit-Level

6.
The extrusion machine is calibrated for each batch of containers made.

Batch-level

7
A plant manager oversees the entire manufacturing operation.

Facility-level

8.
Rent is paid for the building that houses the manufacturing processes.

Facility-level

9.
Each container product line has a product line manager.

Product-level

10.
Each container is cut from the mold once the plastic has cooled and hardened.

Unit-Level

1.
In bidding for​ jobs, managers lost bids they expected to win and won bids they expected to lose.

More likely to benefit.

2.
The company operates in a very competitive industry.

More likely to benefit.

3.
The company produces few​ products, and the products consume resources in a similar manner.

Less likely to benefit.

4.
The company has very few indirect costs.

Less likely to benefit.

5.
The company produces high volumes of some of its products and low volumes of other products.

More likely to benefit.

6
The company has reengineered its production process but has not changed its accounting system. They are

More likely to benefit.

a.
There is an emphasis on building in quality.

Lean production

b.
The final operation in the production sequence​ "pulls" parts from the preceding operation.

Lean production

c.
Employees do a variety of​ jobs, including maintenance and setups as well as operation of machines.

Lean production

d.
Suppliers make frequent deliveries of small quantities of raw materials- this is what type of production.

Lean production

e.
Each employee is responsible for inspecting his or her own work.

Lean production

f.
Suppliers can access the​ company’s intranet.

Lean production

g.
Large stocks of finished goods protect against lost sales if customer demand is higher than expected.

Traditional production

h.
The workflow is continuous to attempt to balance the rate of production with the rate of demand.(which type of production)

Lean production

i.
Setup times are long.

Traditional production

j.
A workplace organization system called​ "5S" is frequently used to keep work spaces clean and organized. What type of production?

Lean production

k.
The manufacturing cycle times are longer.

Traditional production

l.
Management works with suppliers to ensure​ defect-free raw materials.

Lean production

m.
Products are produced in large batches.

Traditional production

Strength-testing one item from each batch of panels

Appraisal

Training employees in TQM

Prevention

xTraining suppliers in TQM

Prevention

Identifying preferred suppliers who commit to on-time delivery of perfect quality materials

Prevention

Avoid lost profits from lost sales due to disappointed customers

External failure

Avoid rework and spoilage

Internal failure

Avoid inspection of raw materials

Appraisal

Avoid warranty costs

External failure

a.
The time that elapses between the start of production and the​ product’s completion is known as

.

manufacturing cycle time

b.
is the management philosophy and strategy focused on creating value for the customer by eliminating waste.

Lean thinking

c.
The costs incurred for every​ batch, regardless of the number of units in the​ batch, are known as
.

batch-level costs

d.
Costs incurred to avoid​ poor-quality good or services are
.
.

prevention costs

e.
Using​ activity-based costing information to make decisions that increase profits while satisfying​ customers’ needs is
.

activity-based management

f.
An acronym for the eight wastes is
.

DOWNTIME

g.
The costs incurred for a particular​ product, regardless of the number of units or batches of the product​ produced, are known as
.

product-level costs

h.
focuses on activities as fundamental building blocks in compiling the indirect costs of​ products, services, and customers.

Activity-based costing

i.
are costs incurred when defects in​ poor-quality goods or services are corrected before making delivery to customers.

Internal failure costs

j.
are incurred for every single unit of product produced.

Unit-level costs

k.
Costs incurred when the company does not detect​ poor-quality goods or services until after delivery is made to customers are
.

external failure costs

l.
are costs incurred no matter how many​ units, batches, or products are produced.

Facility-level costs

m.
is a Japanese word meaning​ "change for the​ better."

Kaizen

n.
Costs incurred to detect​ poor-quality goods or services are
.
.

appraisal costs

o.
The rate of production needed to meet customer demand yet avoid overproduction is known as
.

takt time

p.
is a storage system used to reduce the waste of transportation and​ movement, in which​ tools, materials, and equipment are stored in proximity to where they will be used most frequently.

POUS

q.
is a management philosophy of delighting customers with superior products and services by continually setting higher goals and improving every business function

TQM

Companies often refine their cost allocation systems to minimize the amount of cost distortion caused by the simpler cost allocation systems.

True

False

True

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.

D. departments incur different types of overhead and the products or jobs use the departments to a different extent.

Traditional costing systems are generally more accurate than ABC costing.

True
False

False

Which of the following is​ true?
A.
​Value-added activities are also referred to as waste activities.
B.
ABC is only applicable to manufacturers.
C.
ABM refers to using​ activity-based cost information to make decisions.
.D.
The goal of ABM is to decrease the amount of​ value-added activities.

C. ABM refers to using​ activity-based cost information to make decisions.

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

True

Lean companies typically crossminus−train employees to perform more than one task.
True
False

True

Which of the following is not one of the costs of quality​ categories?
A.
Appraisal costs
B.
Transportation costs
C.
External failure costs
D.
Prevention costs

B. Transportation costs

On a Cost of Quality​ report, which of the following cost items should be classified as an external failure​ 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

A. Customer returns of defective products

When is Exam​ 1?
A.
Wednesday​ – Friday, ​ 9/27 -​ 9/29
B.
Monday​ – Wednesday, ​ 9/25 -​ 9/27
C.
Monday​ – Friday, ​ 9/25 -​ 9/29
D.
Tuesday​ – Thursday, ​ 9/26 -​ 9/28

D. Tuesday​ – Thursday, ​ 9/26 -​ 9/28

As a result of cost​ distortion, some products will be overcosted while other products will be undercosted.

True
False

True

The first step in computing and using ABC is which of the​ following?
A.
Allocating some MOH to each job
B.
Identifying the​ company’s primary activities
C.
Selecting appropriate allocation bases
D.
Calculating activity cost allocation rates

B. Identifying the​ company’s primary activities

The potential benefits of​ 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.

C. produce high volumes of some products and low volumes of other products.

One key element of lean production is to produce large batches.

True

False

False

Concerning lean​ operations, which of the following is false​?
A.
Can leave companies vulnerable to​ supply-chain disruptions
B.
Focus on internal and external waste
C.
Are quickly becoming the dominant business paradigm
D.
Can be found in all​ sectors, not just manufacturing

B. Focus on internal and external waste

Which of the following is an example of a cost item that should be classified as an internal failure​ cost?
A.
Employee training costs
B.
Inspection costs
C.
Rework costs
D.
Product return costs

C. Rework costs

Reporter from The Wall Street Journal
(financial/managerial/both)

financial

Regional division managers
(financial/managerial/both)

managerial

Potential investors
(financial/managerial/both)

financial

Bookkeeping Department
(financial/managerial/both)

financial

Manager of the Service Department
(financial/managerial/both)

managerial

Wall Street analyst
(financial/managerial/both)

financial

Division controller
(financial/managerial/both)

both

State tax agency auditor
(financial/managerial/both)

financial

External auditor​ (public accounting​ firm)
(financial/managerial/both)

financial

Loan officer at the​ company’s bank
(financial/managerial/both)

financial

Board of directors
(financial/managerial/both)

both

Internal auditor
(financial/managerial/both)

both

SEC examiner
(financial/managerial/both)

financial

Current stockholders
(financial/managerial/both)

finncial

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)

credibility