CHAPTER 7 QUIZ REVIEW

Question 1

The philosophy of customer satisfaction permeates the world-class firm.

T or F

Answer 1

T

Question 2

Reports generated by the cost accounting system include performance reports and budget reports.

T or F

Answer 2

T

Question 3

The cost accounting system authorizes the release of raw materials into production.

T or F

Answer 3

F

Question 4

Batch processing creates a homogeneous product through a continuous series of standard procedures.

T or F

Answer 4

F

Question 5

The bill of materials specifies the types and quantities of the raw materials and subassemblies used in producing a single unit of finished product.

T or F

Answer 5

T

Question 6

A purchase requisition authorizes the storekeeper to release materials to individuals or work centers in the production process.

T or F

Answer 6

F

Question 7

Cement and petrochemicals are produced by the batch manufacturing method.

T or F

Answer 7

F

Question 8

The objective of the Economic Order Quantity model is to reduce total inventory costs by minimizing carrying costs and ordering costs.

T or F

Answer 8

T

Question 9

The work-in-process file is the subsidiary ledger for the work-in-process control account.

T or F

Answer 9

T

Question 10

Move tickets authorize the storekeeper to release materials to work centers.

T or F

Answer 10

F

Question 11

Typically the only allocated cost in the value stream is a charge per square foot for the value stream production facility.

T or F

Answer 11

T

Question 12

Computer Integrated Manufacturing focuses on reducing the complexity of the physical manufacturing layout of the shop floor.

T or F

Answer 12

F

Question 13

The only objective of the Just-In-Time philosophy is to reduce inventory levels.

T or F

Answer 13

F

Question 14

Accounting in a world-class manufacturing environment emphasizes standard cost and variance analysis.

T or F

Answer 14

F

Question 15

ABC assigns cost to cost objects based on their use of activities.

T or F

Answer 15

T

Question 16

The complexities of ABC have caused many firms to abandon this method in favor of a simpler accounting model called value stream accounting.

T or F

Answer 16

T

Question 17

A company’s value stream includes all steps in a process, both essential and non-essential, for which the customer is willing to pay.

T or F

Answer 17

F

Question 18

Lean manufacturing evolved from the Toyota Production System (TPS), which is based on the just-in-time (JIT) production model.

T or F

Answer 18

T

Question 19

The two subsystems of a traditional conversion cycle are the production system and the delivery system.

T or F

Answer 19

F

Question 20

Manufacturing resources planning (MRP II) has evolved into enterprise resource planning (ERP).

T or F

Answer 20

T

Question 21

Pull processing involves pulling products from the consumer end (demand), rather than pushing them from the production end (supply).

T or F

Answer 21

T

Question 22

The inventory control function updates and maintains both raw materials and finished goods inventory subsidiary ledgers.

T or F

Answer 22

T

Question 23

An excess materials requisition is a control that signals that a greater than standard quantity of materials is being ordered from the vendor.

T or F

Answer 23

F

Question 24

Cost accounting initiates a WIP account upon receiving the first move ticket of a batch.

T or F

Answer 24

F

Question 25

A company’s value stream map depicts only the value added activities needed to complete a process or product. T or F

Answer 25

T

Question 26

Which statement is true? a. World-class companies must maintain strategic agility and be able to turn on a dime. b. World-class companies motivate and treat employees like appreciating assets. c. Manufacturing firms that achieve world-class status do so by following a philosophy of lean manufacturing d. All the above are true

Answer 26

d. All the above are true

Question 27

Which statement is true? a. World-class companies must maintain strategic agility and be able to turn on a dime. b. World-class companies motivate and treat employees like appreciating assets. c. Manufacturing firms that achieve world-class status do so by following a philosophy of lean manufacturing d. All the above are true

Answer 27

d. All the above are true

Question 28

Which function is not a part of the batch production process? a. Plan and control production b. Prepare purchase orders c. Maintain inventory control d. Perform cost accounting

Answer 28

b. Prepare purchase orders

Question 29

Which function is not a part of the batch production process? a. Plan and control production b. Prepare purchase orders c. Maintain inventory control d. Perform cost accounting

Answer 29

b. Prepare purchase orders

Question 30

The purpose of the cost accounting system is to a. produce information for inventory valuation b. authorize release of raw materials c. direct the movement of work-in-process d. determine material requirements

Answer 30

a. produce information for inventory valuation

Question 31

Which process creates a homogeneous product through a continuous series of standard procedures? a. batch process b. make-to-order process c. continuous process d. none of the above

Answer 31

c. continuous process

Question 32

An example of a continuous process is the production of a. wedding invitations b. milk products c. jet aircraft d. all of the abov

Answer 32

b. milk products

Question 33

All of the following are characteristics of batch processing except a. each item in the batch is similar b. batches are produced in accordance with detailed customer specifications c. batches are produced to replenish depleted inventory levels d. setting up and retooling is required for different batches

Answer 33

b. batches are produced in accordance with detailed customer specifications

Question 34

All of the following are characteristics of batch processing except a. each item in the batch is similar b. batches are produced in accordance with detailed customer specifications c. batches are produced to replenish depleted inventory levels d. setting up and retooling is required for different batches

Answer 34

b. batches are produced in accordance with detailed customer specifications

Question 35

When one of the following statements is true? a. ERP evolved directly from MRP. b. ERP evolved into MRP and MRP evolved into MRP II c. MRP II evolved from MRP and MRP II evolved into ERP d. None of the above is true.

Answer 35

c. MRP II evolved from MRP and MRP II evolved into ERP

Question 36

The most common means of making entries in the general ledger is via the journal voucher. T or F

Answer 36

True

Question 37

The most common means of making entries in the general ledger is via the journal voucher. T or F

Answer 37

True