 Companies that adopt just-in-time purchasing systems often experience fewer deliveries from

suppliers. False
 The primary reason for adopting total quality management is to achieve greater customer
satisfaction True
 One of the purposes of standard costs is to simplify costing procedures and expedite cost
reports. True
 Incremental costs is the difference in total cost that results from selecting one choice instead of
another. True
 Controllable costs arise from periodic appropriation decisions and have no well-specified
function relating inputs to outputs. False
 the purchases account in merchandising enterprise is equivalent to finished goods. False
 When the number of units manufactured increases, the most significant change in average unit
cost will be reflected as a decrease in the variable element. False
 Costs that increase as the volume of the activity decreases within the relevant range are average
costs per unit. True
 The cost of the direct labor associated with the manufacture of a product should be classified as
an expense when the employees are paid. False
 The wages of the workers on the shipping docks who load completed products onto outgoing
trucks is classified as a period cost. True
 Advocates if variable costing for internal reporting purposes do not rely on price-volume
relationship. False
 Variable costing is unacceptable for financial accounting. True
 Absorption Costing differs from variable costing in that standards can be used with absorption
costing, but not with variable costing. True
 Calculating income under variable costing does not require knowing unit production. True
 Activity-based costing requires information about avoidability of individual cost. False
 The best characterization of an opportunity cost is that it is relevant to decision making but is
not usually reflected in accounting records. True
 The factor that need not be considered when calculating an inventory economic order quantity
(EOQ) is safety stock level. True
 The receiving department keeps informed concerning sources of supply, prices and delivery
schedules. False
 An inventory control technique that reviews quantities on hand periodically and orders
sufficient quantities to bring inventory up to a desired level expressed as a number of days’ or
weeks’ supply is the two-bin method. False
 The JIT production ideal is a batch size. True
 The materials requisition is the list of materials requirements for each step in the production
sequence. False
 The purchase order informs the purchasing agent of the quantity and king of materials needed.
False
 In regression analysis, the coefficient of determination is a measure of the amount of variation
in the dependent variable explained by the independent variables. True
 A firm regressed overhead in units produced over the past year and found coefficient of
determination equal to 0. With a U-shaped residual error pattern. It is reasonable to conclude
that the relationship between overhead and units produced is linear. False
 When the relationship between the independent and dependent variables is not expected to
remain constant, an appropriate method of analysis is curvilinear regression. True
 The slope of the line of regression is the rate at which the independent variables varies. False
 product quality related costs are part of a total quality control program. A product quality
related cost incurred in detecting individual products that do not conform to specification is an
example of appraisal cost, True
 The cost statistical quality control in a product quality cost system is categorized as a prevention
cost. True
 Examples of batch-level costs are salaries or schedulers and setup personnel. True
 Examples of plant-level activity drivers include number of products and design changes. False
200A
FAR INC.
SIGN Co.
ORNAMENTAL
Co.
Negotiable
Instrumen
t Inc,
HELPERS
Co.
Jenna Co.
The Cloth
Center Inc.
The Hudy
Manufacturing
Company
Yellow
Company
Forever
Company