Which of the following is the first step in assigning costs in the activity-based costing?

A. Accumulate costs for each activity

B. Separate nonvalue-adding activities from value-adding activities

C. Analyze all nonvalue-adding activities to determine if they are necessary support areas

D. Identify and classify each activity

The initial step in achieving the efficiency of a just-in-time system is to

A. redesign the plant layout.

B. stop ordering materials for inventory.

C. identify products that are not profitable.

D. replace laborers with machines.

Which of the four levels of the cost hierarchy would be used by a ice cream producer using an activity-based management for a production run of a certain quantity of ice cream of vanilla flavor?

A. Unit-level activity

B. Batch-level activity

C. Facility-level activity

D. Product-level activity

Backflush costing aims at reducing waste in the

A. accounting system.

B. storage of raw materials.

C. production process.

D. cost of goods sold.

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

A. Flexible work cells are created to increase productivity.

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

Which of the following statements is true of nonvalue-adding activities?

A. They are wasteful and targeted for elimination.

B. They add cost to a product or service but does not increase its market value.

C. They are unnecessary activities.

D. They are included in the value chain of activities.

Which of the following activities would be part of the value chain of a manufacturer?

A. Cost accounting

B. Materials storage

C. Product design

D. Inventory control

Which of the following statements is true of a traditional operating environment?

A. It uses a multiskilled work force.

B. It always maintains less or no inventory.

C. It has long production runs with infrequent setups.

D. It plans by using pull-through production scheduling.

In a just-in-time environment, managing the production process focuses on

A. units produced per direct labor hour.

B. reducing inventories.

C. total processing time per unit.

D. allocating overhead more accurately.

A framework for classifying activities according to the level at which their costs are incurred is called a

A. bill of activities.

B. full product cost.

C. value chain.

D. cost hierarchy.