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11) Operational decisions concern the allocation and utilization of resources. 12) Strategic decisions are typically not collaborative. 13) Moving a factory from Detroit to Mexico is an example of a strategic decision. 14) Finding the best location for building a new plant is an example of a structured decision. 15) Need.
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TRUE/FALSE 1.Typical inputs in manufacturing include materials, labor and equipment. 2.Most production systems exhibit some characteristic of job shops or some characteristics of process shops, but not both. 3.Job shops and process shops are basically the same in the extent to which we can trace costs to individual units and jobs. 4.In process shops,.
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MULTIPLE CHOICE 16.In manufacturing settings with large batches, different units of the same batch might be at different stages of completion.  Because we still track costs for the entire batch, we need to distribute the costs of making the batch of units still in process to: A.Work in process inventory. B.Cost of goods.
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MULTIPLE CHOICE 16.In a consulting company specializing in designing multi-story office complexes, which of the following activities would not be classified as support activity? A.Shipping. B.Purchasing. C.Structural engineering. D.Human resources. E.All of the above would be support departments. 17.Accounting for reciprocity among support activities is important because: A.It increases the accuracy of cost estimates. B.It helps line.
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  11.A firm’s actual overhead cost and actual activity volume are likely to remain relatively constant from month to month, thus fluctuations in overhead rates remain relatively constant. 12.The predetermined overhead rate is calculated by dividing expected activity level by expected overhead costs for the period. 13.Because of their widespread use, we call.
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TRUE/FALSE 1.A line activity relates indirectly to producing services or products. 2.In decentralized firms, it is likely that different managers oversee the activities connected with the different cost pools. 3.Cost allocation rates serve as the explicit “price” for the services line managers obtain from other line activities. 4.Electrical engineering is an example of a.
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1.2   Multiple-Choice Questions 1) ________ states that the number of transistors per square inch on an integrated chip doubles every 18 months. A) Nielsen's Law B) Faraday's Law C) Moore's Law D) Newton's Law 2) According to Moore's Law, the ________. A) price of integrated chips increases once in 18 months B) size of computing devices and integrated.
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  26.Suppose Smith started 100,000 units during the period, transfers 75,000 units to finished goods and estimates that 25,000 units still in process are only 20 percent complete.  What is the number of equivalent units in WIP inventory at the end of the period? A.20,000 B.5,000 C.15,000 D.60,000 E.80,000 27.Which of the following is not a.
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  36.Smith Manufacturing uses the weighted average process costs method.  Smith has provided the follow data: Total Units/CostMaterialConversion Beginning inventory      25,000 Units started during period    175,000 Units completed during period    185,000 Costs from beginning inventory  $641,250   $561,250      $80,000 Costs incurred during period$6,868,750$4,038,750$2,830,000 Units still in process at the end of the period are 100% complete as to material.
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Exercises 1.Predetermined rates and cost flows (LO2, LO3). Ace Company has the following (unadjusted) amounts in its accounts as of December 31: Cost of goods sold $100,000 Finished goods inventory $75,000 Raw materials inventory $50,000 Work-in-process inventory $25,000 The company prorates over- or underapplied overhead. Required: What will the adjusted balance in work-in-process inventory be if overhead.
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6.When calculating equivalent units, we assume that cost is proportional to work done. Why does this assumption make sense? 7.Who in the factory would be best equipped to provide estimates of the percent completion for work in process? 8.Suppose your production manager tells you that one-half the WIP is 20% complete in.
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11) The term management information systems refers to the management and use of information systems that help businesses achieve their strategies. 12) A system is a group of components that interact without a specific purpose. 13) According to the five-component framework, the five components of an information system are present in every.
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4.Suppose an intensive target costing exercise concludes that a product could not meet its allowable cost. However, the firm’s strategic group argues that the product is vital for retaining the firm’s presence in an important market segment. Should the firm abandon the product or develop it? 5.Consider a professional sports team.
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4.Worthington Company employs a job-order costing system. Before disposition of the underapplied or overapplied over-head, selected year-end balances from Worthington’s accounting records were: Cost of goods sold $720,000 Raw material inventory 36,000 Work-in-process inventory 54,000 Finished goods inventory 90,000 Required: If the adjusted ending balance (after proration of underapplied or overapplied overhead) of cost of goods.
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  31.In process costing it is not possible to trace costs to individual units.  All that is required is to determine the cost of an average unit.  Process costing systems accomplish this task by: A.Allocating all costs based on a pre-determined rate. B.Accumulating all costs by department or process. C.Accumulating all costs on a.
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2.1   True/False Questions 1) A group of four painters, each painting a different wall in the same room, are not working cooperatively. 2) A group of programmers work separately to create modules and merge the modules later to build an application. This is an example of collaboration. 3) Feedback and iteration enable.
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21) Mark follows certain steps to access the supplementary readings for a course when using his organization's library management system. These steps that he follows are examples of the ________ component of an information system. A) procedure B) data C) software D) hardware 22) The words that an individual types in an MS Word document.
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MULTIPLE CHOICE 21.Which of the following entities would not use job costing systems? A.Law firms. B.Manufacturer of electronic equipment used in aircraft. C.Remodeling contractors. D.PepsiCo. E.All of the above would use job costing. 22.The most logical business which would use job order costing would be: A.An oil refinery B.A paper company C.A custom-home builder D.A car dealership 23.Which of the following statements.
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Exercises 1.Kang Industries provides the following partially complete process-cost report. Item Equivalent Units of MaterialEquivalent Units of ConversionValue Ending WIP inventory              10,000       7,000     ? Cost of goods completed & transferred out 90,000       90,000             $270,000 The cost of goods completed and transferred out contains $162,000 toward the cost of materials and $108,000 toward.
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Short Answer 1.What production environments are most suitable for process costing? 2.What is the key difference between process costing and job costing? 3.What is an equivalent unit? 4.Why is the concept of an equivalent unit important in process costing? 5.Why is the concept of equivalent units not relevant for job costing? 6.What are the five steps.
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Short Essays 1.What is the implicit time horizon that we assume when we allocate support activity costs to other cost objects such as products and other activities? 2.We rank support departments when using the step-down method. Alternate ranking criteria include department size, number of other departments serviced, and arbitrary ranking. Which method.
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21) According to the five-component model of information systems, the data and software components of information systems are capable of performing actions. 22) In the five-component model of an information system, data acts as a bridge between the computer and the human sides. 23) In the five-component model of an information system,.
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41) Good information is conceived from accurate, correct, and complete data. 42) Good information requires that data be timely. 43) Data should be relevant to the subject, not necessarily to the context. 44) Data needs to be sufficient for the purpose for which it is generated, but just barely so. 45) A good information.
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Short Essay   1.Why is process costing suitable for a soft drink company but not well suited for a firm that makes luxury yachts? 2.What is the role for process costing in a Just-in-Time (JIT) production environment, where work-in-process inventories are negligible? For example, at any given point in time a JIT plant.
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31) Which of the following pairs of components constitutes the computer side of information systems? A) software and data B) data and hardware C) people and procedures D) hardware and software 32) Which of the following pairs of components constitutes the human side of information systems? A) software and procedures B) software and people C) people and procedures D).
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Short Essays 1.“Variations in the traceability of costs is the key distinction between job- and process-costing systems.” Comment. 2.“Costing systems in hospitals are like job-costing systems in many respects.” Do you agree with this statement? Why or why not? 3.Describe service firms that are likely to have a job costing-like system; a process.
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11.Consider a multidepartment (or multi-station) production environment in which not all products go though all processes. Why would we use process costing on a station-by-station basis in this setting? Does this setting reflect a blend of both job- and process costing systems? 12.When you have beginning work-in-process inventory, why is the.
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6) What is the most important component of an information system? Why? 7) Explain how the five components of an information system are arranged in terms of ease of change and organizational disruption. 8) How is information technology different from information systems? 9) Discuss the common definitions of information. 10) What are the.
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3.Tabb Manufacturing produces vacuum cleaners.  Tabb uses a job cost system and applies overhead based on direct labor hours.  Only one job, Job #33, remained in progress at the end of the period.  The following information is for the period: Estimated overhead $75,000 Estimated direct labor hours 15,000 Material used during period for Job #33 $2,500 Labor.
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11) Meredith constantly analyzes her work in terms of her individual contribution that she makes to the overall output of the organization. This shows her ________ skills. A) collaboration B) experimentation C) systems thinking D) problem-solving 12) When presenting an idea to his colleagues, Marcus failed to consider others' views and got defensive when people.
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Problems 1.Blue Computers began the current month with zero units of its Model XFD in work in process inventory.  During the month Blue started 2,500 units into production, completing 1,800 units by the end of the month.  Blue estimates that the 700 units still in process are 10% complete with respect.
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Short Answer 1.What is the distinction between a line activity and a support activity? Give two examples of each.   2.What complicates the allocation of support activity costs? 3.What are the three methods for allocating the costs of support activities? 4.Name one important difference between the step-down method and the direct method? 5.Does changing the order.
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36.The step-down method of allocation improves the direct method by: A.Considering the reciprocity in consumption partially. B.Simplifying the allocation approach. C.Allocating more of the total cost of the service activity. D.Using a statistical approach to allocation. E.None of the above. 37.The XYZ Manufacturing Company has two support activity pools, Accounting (A) and Human Resources (H).  Costs.
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  41.In which of the following accounts do firms accumulate indirect manufacturing costs? A.General and administrative expense accounts. B.Work-in-process inventory accounts. C.Overhead control accounts. D.Over- or under-applied overhead accounts. E.None of the above. 42.Systems like job costing (systems that use predetermined overhead rates to apply overhead) are referred to as: A.Standard costing systems. B.Actual costing systems. C.Normal costing systems. D.Discretionary costing.
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1.1   True/False Questions 1) The number of transistors per square inch on an integrated chip doubles every 18 months according to Moore's Law. 2) Moore's Law predicts that the price to performance ratio of computers will double once in eighteen months. 3) Because of Moore's Law, the cost of data processing, communications, and.
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31) Ordering additional hardware creates the least amount of organizational disruption compared to changes in the other four components of an information system. 32) Information technology and information systems are synonymous terms. 33) Information technology is an assembly of hardware, software, data, procedures, and people that produces information. 34) Information system refers to.
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1.3   Essay Questions 1) State Moore's Law. What is the implication of Moore's Law for managers? 2) Explain the four nonroutine cognitive skills that are key to a successful career today. 3) Define the terms system, information system, and management information system. 4) List and briefly explain the five-component model of an information system.
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6.How do we account for the self-consumption of resources (e.g., the power consumed by the Power Generation Department, or the Payroll Department processing checks for the employees in human resources) when we perform a step-down allocation? 7.Name one important difference between the reciprocal method and the step-down method. 8.Describe the dual-rate allocation.
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9.Consider the cost of materials. Why is the percentage completion for units that are finished during the period always 100%? 10.Consider the cost of materials added at the end of the process. Why is the percentage completion for units that are still in process always zero? 11.Why do most process-costing systems need.
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  Short Answer 1.What are the two major kinds of production environments? 2.What is a job-costing system? Give two examples of a job-costing system. 3.What is a process-costing system? Give two examples of a process-costing system. 4.In a job-costing system, what costs are traced to define the terms work in process (WIP) inventory, cost of.
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26.In a home construction company, support costs accumulated by the IT department can be allocated to all except which of the following departments when using the direct method? A.Design B.Electrical C.Masonry D.Purchasing 27.It has been determined that Administrative costs of $6,300 have been consumed on a percentage basis by the following departments: A.$5,040 B.$1,890 C.$2,363 D.$3,938 28.Assume Porter’s Consulting uses.
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Exercises 1.Target Costing. True to its name, Imaging Technologies produces testing equipment used by forges to test their products. Imaging is considering a new X-ray machine that substantially enhances the functionality of the product it would replace. Imaging believes that it might be able to sell 4,500 units of the new.
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Problems 1.To properly allocate cost, it is important to maintain separate cost pools for line activities and support activities.  It is important to distinguish between the two activities.  Indicate by placing an “X” in the appropriate column whether each of the following items describes a line activity or a support activity. .
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Problems 1.The characteristics of a firm’s production process determine the features of its cost accounting system.  However, every process converts inputs to outputs.  Required: Enter the identifying letters in the blanks below to indicate the term that best matches each description. A. Applied overhead F. Operations costing B. Cost accounting G. Over-applied overhead C. Fixed manufacturing overhead H. Predetermined overhead rate D. Job shops I. Process shops E. Normal.
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TRUE/FALSE 1.Process costing systems are suitable for firms that produce customized products in small amounts. 2.The need to distribute the cost of making the batch of units that are still in process and to units that have been completed during the period is central to process costing. 3.In a process costing system, in-process.
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6.Suppose your firm disposes of under- or overapplied overhead by writing it off to cost of goods sold. How could you increase the chances of obtaining an income-increasing adjustment at year-end? 7.Suppose a firm, with a normal costing system, uses the number of units produced to allocate overhead to products. Use.
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41) Which of the following statements is true of information technology (IT)? A) Information technology (IT) refers to the products, methods, inventions, and standards that are used for the purpose of producing information. B) Information technology is an umbrella term that covers information systems and the products, methods, inventions, and standards used.
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7.Why do firms use predetermined overhead rates? 8.What is a normal costing system? 9.What do the terms underapplied overhead and overapplied overhead mean? 10.If a firm has underapplied overhead at year-end, its actual overhead rate is lower than its pre-determined rate. True or False? Justify your answer. 11.What are the three methods firms can.
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