15. Which of the following is NOT an effective way of dealing with a production constraint (i.e., bottleneck)? Select one: a. Subcontract work that would otherwise require use of the bottleneck. b. Pay overtime to workers assigned to workstations located after the bottleneck in the production process. c. Reduce the number of defective units produced at the bottleneck. d. Pay overtime to workers assigned to the bottleneck.

15. Which of the following is NOT an effective way of dealing with a production constraint (i.e., bottleneck)? Select one: a. Subcontract work that would otherwise require use of the bottleneck. b. Pay overtime to workers assigned to workstations located after the bottleneck in the production process. c. Reduce the number of defective units produced at the bottleneck. d. Pay overtime to workers assigned to the bottleneck.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter4: Activity-based Costing

Section: Chapter Questions

Problem 3DQ: Explain how a plantwide overhead rate, using a unit-based driver, can produce distorted product...

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Explain how a plantwide overhead rate, using a unit-based driver, can produce distorted product costs. In your answer, identify two major factors that impair the ability of plantwide rates to assign cost accurately.
Which of the following statements is true regarding by products? a. Process costing is the only method that should result in by-products. b. Job order costing systems will never have by-products. c. Job order costing systems may have instances where by-products result from the production process. d. Process costing will never have by-products from the production process.
26. Which of the following factor is irrelevant regarding a special order? a.The unused capacity of the plant that is used for the special order b.The labor costs for the special order c.The fixed overhead that can be avoided if the special order is not taken up d.The additional revenue from the special order
Which of the following practices is incompatible with a just-in-time management system? A. reliance on contracts with suppliers to deliver raw materials when needed B. ordering large quantities of raw materials in order to obtain volume discounts C. pursuing frequent deliveries of defect-free materials from suppliers D. completing work in self-contained work cells
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One of the disadvantages of the departmental and the plantwide overhead rate methods is that OA. technological advances may decrease the effect of direct labor hours as a percentage of total manufacturing costs. B. technological advances may increase direct labor hours as a percentage of total manufacturing costs. OC. direct labor hours may decrease the effect of technological advances. OD. direct labor hours may increase the effect of technological advances.
Which of the following is correct with respect to closing out overapplied manufacturing overhead to Cost of Goods Sold versus closing it out to Work-in-Process Inventory, Finished Goods Inventory, and Cost of Goods Sold? The balance in the Work-in-Process account after allocation will be higher if the overapplied overhead is closed out by allocating it to all appropriate accounts. a. b. None of given answer is correct. С. Cost of Goods Sold will be lower if the overapplied overhead is closed out by allocating it to the inventory accounts as well as to Cost of Goods Sold. d. Operating income will be higher if all of the overapplied overhead is closed out to Cost of Goods Sold. e. The balance in the Work-in-Process account after allocation will be the same under either method. Clear my choice
Which of the following is an example of a variable cost? a.Insurance on the production equipment b.Direct materials c.The production supervisor's salary d.Depreciation of the factory building e.None of these
Which would NOT be relevant in a make- or- buy decision?a) factory deprciation b) direct materials c) variable overhead d) direct labor
5 Why may departmental overhead rates NOT correctly assign overhead costs? Select one: a. Because of the high correlation between direct labour hours and the incurrence of overhead costs. b. Because of the use of direct labour hours in allocating overhead costs to products rather than machine time or quantity of materials. c. Because of the over-reliance on volume as a basis for allocating overhead costs where products differ regarding the number of units produced, lot size, or complexity of production. d. Because of the difficulties associated with identifying cost pools for the first stage of the allocation process.
Which of the following would be an inappropriate activity base for allocating factory overhead costs? a. direct labor cost b. machine hours c. salaries of supervisors d. direct labor hours
How should a responsibility-accounting system handle each of the following scenarios? 1. Department A manufactures a component, which is then used by Department B. Department A recently experienced a machine breakdown that held up production of the component. As a result, Department B was forced to curtail its own production, thereby incurring large costs of idle time. An investigation revealed that Department A’s machinery had not been properly maintained.2. Refer to the scenario above, but suppose the investigation revealed the machinery in Department A had been properly maintained.