Question 1.16

Which of the following statements contradicts the philosophy underlying the just-in-time operating environment?

a. The work force must become multiskilled in order to operate different machines and perform other tasks in the work cell.

b. A customer order triggers the purchase of materials and the activation of the production process.

c. Large inventories are maintained in order to fulfill customer orders on a timely basis.

d. Flexible work cells are created to increase productivity.

1 point

Question 1.17

Backflush costing aims at reducing waste in the

a. accounting system.

b. cost of goods sold.

c. storage of raw materials.

d. production process.

1 point

Question 1.18

Which of the following statements most accurately explains the behavior of costs?

a. Costs can be fixed, variable, or a combination of both.

b. The majority of costs are variable per unit of production.

c. The majority of costs are fixed per unit of production.

d. Mixed costs are treated as variable costs.

1 point

Question 1.19

The high-low method

a. calculates variable costs per unit by dividing the difference in the high and low activity levels by the high and low costs.

b. gives accurate results of cost estimation, irrespective of the relevant range.

c. helps in determining the fixed and variable components of a mixed cost.

d. is based on the premise that all data points are necessary to define a linear cost-volume relationship.

1 point

Question 1.20

The breakeven point is the point at which

a. fixed costs equal variable costs.

b. total revenues equal total costs.

c. sales equal variable costs.

d. fixed costs equal sales.