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Multiple choice

How does an ERP system differ from an MIS?
1 The ERP system informally links the different areas of management for specific purposes.
2 There is no difference.
3 The ERP system combines all areas of management into one centralized data warehouse.
4 The ERP system can be used only in a service business.

Quality costs of conformance and costs of nonconformance are related to each other:
1 rarely.
2 directly.
3 indirectly.
4 inversely.

The overall objective of controlling the costs of quality is to eliminate:
1 appraisal costs.
2 costs of nonconformance.
3 costs of conformance.
4 the costs of quality.

Some companies have moved to JIT without changing the substance of their accounting systems. Relying on the former accounting system may present problems for management because:
1 traditional accounting systems are designed to track items (labor efficiency, purchase price, overhead absorption) that are no longer primary concerns of management.
2 control of cost drivers will be lost.
3 managers do not understand the new manufacturing environment.
4 traditional accounting systems discourage the creation of large inventories that are necessary to ensure uninterrupted production runs.

With respect to product quality:
1 quality must be "traded off" against cost considerations.
2 the best quality control systems rely on inspection points to ensure product quality.
3 accountants do not need to be concerned with quality control reporting, as it is entirely nonfinancial in nature.
4 quality output starts with correct product design.

CAD is:
1 a cost allocating decision.
2 computer aided downtime.
3 a computer-based engineering system.
4 an organizational environment.

Which of the following specific measures of vendor quality would be used when evaluating vendors that supply a company with direct materials?
1 Defect-free material as a percentage of total materials received
2 Number of customer complaints
3 Time it takes to make a product
4 All would be considered to assess vendor quality of direct materials

The term given to the act of a company comparing its processes to similar processes in a successful company is called:
1 process mapping.
2 TQM.
3 benchmarking.
4 return on quality.

The award given to companies that achieve distinctive results in implementing total quality control is the:
1 ISO.
2 Malcolm Baldrige Quality Award.
3 Deming Application Prize.
4 Kaizen Prize.

A producing center is another term for a(n):
1 service center.
2 cost center.
3 revenue center.
4 activity center.

A discretionary cost center is another term for a(n):
1 service center.
2 activity center.
3 cost center.
4 revenue center.

The allocation base used to assign service center costs is called a:
1 service base.
2 cost driver.
3 revenue driver.
4 revenue base.

An organization that does not require precise measurements of the use of services probably would allocate its service center costs by:
1 using some form of the step method.
2 applying the direct method.
3 each revenue center's ability to absorb the cost.
4 the actual usage of the service by the revenue centers.

Which of the following is a problem inherent in charging revenue centers for usage of service centers?
1 It is difficult to determine the amount that each revenue center should be charged for services.
2 The usage among the revenue centers could vary widely.
3 A particular revenue center may not use any of the support of a specific service center.
4 The revenue centers could choose to use services from outside the company instead.

Another name for the simultaneous equation method is the:
1 reciprocal method.
2 two-step method.
3 step down method.
4 indirect method.

Which of the following methods allocates each service center's costs to all centers supported?
1 Simultaneous equation method
2 Step method
3 Direct method
4 None of the above

Activity-based overhead rates differ from departmental overhead rates in that:
1 they are not used to help determine the full cost of a product or service.
2 they do not include any costs allocated from service centers in their calculation.
3 there are more than one per department.
4 they lessen a manager's ability to control costs.

The cost allocation method that assigns joint costs to products based on their relative market value at the split-off point is the:
1 simultaneous equation method.
2 relative sales value method.
3 net realizable value method.
4 physical units method.

Joint costs are:
1 incurred prior to the separation of joint products.
2 incurred after separation of joint products.
3 incurred prior and after separation of joint products.
4 None of the above

Which of the following is an example of a by-product?
1 Sawdust from a lumber mill used to make fireplace logs
2 Broken cookies used in cookies-and-cream ice cream
3 Pineapple skins from processing pineapple used for animal feed
4 None of the above

Solution Summary

The solution explains some multiple choice questions relating to costing methods, allocations, centers, ABC, joint, JIT, ERP and quality