ACC213_PRACTICEMAT_JIT-BF_cain

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1) A demand-pull system in which each component in a production line is produced immediately as needed by the next
step in the production line is referred to as:

A) just-in-time purchasing

B) materials requirements planning

C) relevant total costs

D) economic order quantity

2) All of the following are potential financial benefits of just-in-time EXCEPT:

A) lower investments in inventories

B) lower investments in plant space for inventories

C) reducing the risk of obsolescence

D) reducing manufacturing lead time

3. _____________ is a "pull" system of production and inventory control.

a. EDI b. EOQ c. JIT d. ABC

4. Reducing setup time is a major aspect of

a. all push inventory systems.

b. the determination of safety stock quantities.

c. a JIT system.

d. an EOQ system.

5. Just-in-time (JIT) inventory systems

a. result in a greater number of suppliers for each production process.

b. focus on a "push" type of production system

c. can only be used with automated production processes.

d. result in inventories being either greatly reduced or eliminated.

a. JIT manufacturing strives for zero inventories.

b. JIT manufacturing strives for zero defects.

c. JIT manufacturing uses manufacturing cells.

d. JIT manufacturing utilizes long lead time and few deliveries.

7. According to JIT philosophy,

a. inventories of finished goods always should be available to meet customer demand.

b. push-through manufacturing flows are the most efficient.

c. maintaining inventories wastes resources and frequently covers up poor work or other problems.

d. long production runs and large production lot sizes take advantage of economies of scale.

8. In accounting for JIT operations, the Raw Material Inventory account

a. is closely monitored to ensure that materials are always on hand in time.

b. can be expected to have a larger balance than with traditional manufacturing methods.

c. is combined with the Work In Process Inventory account.

d. is combined with the Finished Goods Inventory account.

9. The cost accounting system that would be most apt to use a single inventory account entitled Raw and In Process
(RIP) would be: A. backflush costing

B. process costing C. job order costing D. historical costing E. standard costing

10) A costing system that omits recording some or all of the journal entries relating to the cycle from purchase of direct
materials to the sale of finished goods is called:

A) dependent costing B) synchronous costing C) sequential costing D) backflush costing

FOR NEXT THREE ITEMS: Games R Us manufactures various games. For March, there were no beginning inventories of
direct materials and no beginning or ending work in process. Conversion costs is the only indirect manufacturing cost
category currently used. Journal entries are recorded when materials are purchased and when conversion costs are
allocated under backflush costing. Conversion costs March $ 400,000 Direct materials purchased March $1,070,000
Units produced March 58,800 Units sold March 41,800
11) Which of the following journal entries properly records the purchase of direct materials?

A) Accounts Payable Control 1,070,000 Inventory: Raw and In-Process Control 1,070,000

B) Inventory: Raw and In-Process Control 1,070,000 Accounts Payable Control 1,070,000

C) Inventory: Raw and In-Process Control 1,070,000 Conversion Costs 1,070,000

D) Conversion Costs 1,070,000 Inventory: Raw and In-Process Control 1,070,000

12) Which of the journal entries properly records conversion costs?

A) Conversion Costs 400,000 Various Accounts 400,000

B) Various Accounts 400,000 Conversion Costs 400,000

C) Conversion Costs 400,000 Inventory: Direct Materials 400,000

D) Inventory: Direct Materials 400,000 Conversion Costs 400,000

13) Which of the following entries properly records the cost of goods sold for the month?

A) Finished Goods 1,045,000 Work in Process 1,045,000

B) Cost of Goods Sold 1,045,000 Finished Goods 1,045,000

C) Finished Goods 1,045,000 Cost of Goods Sold 1,045,000

D) Cost of Goods Sold 1,045,000 Work in Process 1,045,000

FOR NEXT THREE ITEMS Bong Go, general manager of a highly automated coffee production plant in Sasa, Davao City,
has provided the following information for transactions that occurred during October. The production plant uses a JIT
costing system. (a) Raw materials costing P300,000 were purchased (b) All materials costing P300,000 were
requisitioned for production (c) Direct labor costs of P200,000 were incurred (d) Actual factory overhead costs
amounted to P995,000 (e) Applied conversion costs totaled P1,300,000. This includes the direct labor cost (f) All units
are completed and immediately sold.

14. What is the October 31 balance in the Cost of Goods Sold account? (No adjustment has been made for overapplied
or underapplied conversion cost a. P1,300,000 b. P1,495,000 c. P1,600,000 d. P1,195,000

15. Using the same information in No. 4, what was the overapplied or underapplied conversion cost for the month?

a. P305,000 overapplied b. P195,000 underapplied c. P105,000 overapplied d. P105,000 underapplied

16. Using the same information in Nos. 4 and 5, what is the Cost of Goods Sold after all transaction adjustments have
been completed? a. P1,304,000 b. P1,495,000 c. P1,600,000 d. P1,195,000
17. Hans Jensen, general manager of a Mr. Clean and Company, has provided the following information for transaction
that occurred during August. The production plant uses the JIT costing system.
• Raw materials were purchased at the cost of P97,000.
• Direct labor costs of P77,000 were incurred.
• Actual overhead costs amounted to P225,000.
• Applied conversion costs totaled to P300,000. This includes direct labor costs.
• All units are completed and immediately sold.

Determined the August 31 balance of Cost of Goods Sold account, no adjustment has been made for over-applied or
under-applied conversion cost.

a. 697,000 b.397,000 c. 399,000 d. 699,000

18. Refer to problem 17.  All units are completed and immediately sold. What was the over-applied or under-applied
conversion cost for the month?

a. 5,000 under-applied b. 5,000- over-applied c. 2,000 under- applied d. 2,000 over-applied

19. Refer to problem 17. What is the Cost of Goods Sold after all transactions-adjustments have been completed?

a. 697,000 b.397,000 c. 399,000 d. 699,000

ACC213_PRACTICEMAT_ ABC_ABM_Quiz

TRUE OR FALSE

_________1. A company should strive to reduce all non-value-added activities to a minimum.

_________2. Activity-based costing is appropriate for a company that has low overhead costs that are proportional to
the unit volumes of products.

_________3. An activity-based costing system should be evaluated with regard to the benefits it can provide an
organization versus the costs of implementing it.

_________4. Machine setup is normally considered a unit-level cost

_________5. Preparation of a value chart is the first step in activity analysis

6. Activity-based costing….

a. requires the identification of cost drivers.

b. is used only in JIT operations.

c. applies only to discretionary fixed costs.

d. does not help to identify activities as value-adding or non-value-adding.

7. A company using activity-based costing

a. tries to identify cost drivers.

b. allocates all costs to individual products.

c. looks for the activity with which total costs are most closely associated.

d. is probably using the JIT philosophy.

a. process value analysis

b. re-engineering

c. caveat analysis

d. benchmarking

9. Kimball Company produces two products in a single factory. The following production and cost information has been
determined: The controller has determined total overhead to be P480,000. P120,000 relates to material moves;
P150,000 relates to testing; the remainder is related to labor time.

If Kimball uses direct labor hours to allocate overhead to each model, what would overhead per unit be for Model 1?

a. P295.00

b. P120.00

c. P240.00

d. P400.00

10. Kimball Company produces two products in a single factory. The following production and cost information has been
determined:

The controller has determined total overhead to be P480,000. P120,000 relates to material moves; P150,000 relates to
testing; the remainder is related to labor time.

If Kimball uses direct labor hours to allocate overhead to each model, what would overhead per unit be for Model 2?

a. P158.33

b. P400.00

c. P925.00

d. .1,200.00

11. Kimball Company produces two products in a single factory. The following production and cost information has been
determined:
The controller has determined total overhead to be P480,000. P120,000 relates to material moves; P150,000 relates to
testing; the remainder is related to labor time.

If Kimball uses activity-based costing to allocate overhead to each model, what would overhead per unit be for Model 1?

a. P295.00

b. P120.00

c. P240.00

d. P400.00

12. Kimball Company produces two products in a single factory. The following production and cost information has been
determined:

The controller has determined total overhead to be P480,000. P120,000 relates to material moves; P150,000 relates to
testing; the remainder is related to labor time.

If Kimball uses activity-based costing to allocate overhead to each model, what would overhead per unit be for Model 2?

a. P158.33

b. P400.00

c. P925.00

d. P1,200.00