Accounting 202 - Chapter 4 Copy

35 Questions  I  By Jc173
Activity-Based Costing, Lean Production, and the Costs of Quality

  
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1.  Cost distortion results in the:
A.
B.
C.
D.
2.  When calculating a departmental overhead rate, the numerator should be the:
A.
B.
C.
D.
3.  Which of the following condition(s) favors using departmental overhead rates in place of a plantwide overhead rate?
A.
B.
C.
D.
4.  The use of departmental overhead rates will generally result in the use of a:
A.
B.
C.
D.
5.  What is the first step in developing an ABC system?
A.
B.
C.
D.
6.  In using an ABC system, which of the following steps is NOT performed before the company’s year begins? 
A.
B.
C.
D.
7.  The use of which of the following costing systems is most likely to reduce cost distortion to a minimum? 
A.
B.
C.
D.
8.  Which of the following does ABC take into account? 
A.
B.
C.
D.
9.  Which of the following describes how, in ABC, the activity allocation rate is computed?
A.
B.
C.
D.
10.  What is the last step in developing an ABC system?
A.
B.
C.
D.
11.  Which of the following statements does NOT describe an ABC system?
A.
B.
C.
D.
12.  Which of the following can be used in conjunction with activity-based costing?
A.
B.
C.
D.
13.  The __________________system focuses on activities as the fundamental cost objects. It uses the costs of those activities as building blocks for compiling the indirect costs of products and other cost objects.
A.
B.
C.
D.
14.  ABC costing might lead to:
A.
B.
C.
D.
15.  Which of the following is MOST likely to be the cost driver for the packaging and shipping activity?
A.
B.
C.
D.
16.  Non-value-added activities are:
A.
B.
C.
D.
17.  The benefits of using the ABC costing system are higher if the company:
A.
B.
C.
D.
18.  Why are the benefits of adopting ABC/ABM higher for companies in competitive markets?
A.
B.
C.
D.
19.  Indications that a product cost system needs revision include:
A.
B.
C.
D.
20.  Signs that a product cost system is not working properly include that:
A.
B.
C.
D.
21.  A system that focuses on activities as the fundamental cost object and uses the costs for these activities to compile indirect costs of goods and services is:
A.
B.
C.
D.
22.  Which of the following cost items should be classified as a prevention cost on a cost of quality report?
A.
B.
C.
D.
23.  If a company were to increase its appraisal costs by inspecting more units as the units are completed, the company’s internal failure costs:
A.
B.
C.
D.
24.  If a company were to increase its appraisal costs by inspecting more units as the units are completed, the company’s external failure costs:
A.
B.
C.
D.
25.  The cost of testing incoming raw materials from a supplier would be classified as a(an) :
A.
B.
C.
D.
26.  The cost of training quality control supervisors would be classified as a(n):
A.
B.
C.
D.
27.  The costs incurred when poor quality goods or services are detected and corrected before delivery to customers are called:
A.
B.
C.
D.
28.  Which of the following pertains to a lean production system?
A.
B.
C.
D.
29.  Which of the following pertains to a lean costing or production system?
A.
B.
C.
D.
30.  Which of the following is TRUE about a lean production system?
A.
B.
C.
D.
31.  Which of the following is NOT a factor in the success of lean production systems?
A.
B.
C.
D.
32.  The production system designed to eliminate waste is called a(n):
A.
B.
C.
D.
33.  A system in which companies purchase raw materials only when needed is called:
A.
B.
C.
D.
34.  Which term listed below describes a system where companies purchase raw materials when needed in production and complete finished goods when needed by customers?
A.
B.
C.
D.
35.  The cost of warranty work is an example of a(n):
A.
B.
C.
D.
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