1. Which of the following statements about manufacturing in a traditional environment is true?

a. Factories are organized so that machines that are dissimilar are grouped together.
b. It is not desirable to accumulate raw materials inventory to serve as buffers in case of unexpected demand for products.
c. The process begins with a customer order and products are "pulled" through the manufacturing process.
d. Partially completed inventory is accumulated in a work-in-process inventory account.

2. A traditional manufacturing environment does not have which of the following?

a. An automated production process c. Extremely low levels of work-in-process inventory
b. Trained employees d. Product cost information available

3. Which of the following statements is true about manufacturing companies over the past 20 years?
a. The grouping of machines into "manufacturing cells" has increased.
b. Carrying large amounts of inventory is often less costly than carrying small amounts of inventory.
c. They have moved from a "pull" approach to more of a "push" approach.
d. The basic production process has changed very little over the past 20 years.

4. Which of the following statements regarding the traditional manufacturing environment is not true?
a. Machines are often put into "manufacturing cells" whereby dissimilar machines are grouped together.
b. Raw material is "pushed" to the next production area in anticipation of customer demand.
c. Manufacturers often have raw material, work-in-process, and finished goods inventory on hand.
d. Buffers of inventory may result in workers being less efficient.

5. Lean production is focused on eliminating waste associated with all of the following except:
a. moving products farther than required c. providing excessive customer service
b. down time caused by people waiting for work to do d. over-processing a product

6. Under ideal conditions, companies operating in a ______ environment would reduce inventories of raw materials,
work-in-process and finished goods to very low levels or even zero.
a. volatile c. traditional manufacturing
b. just-in-time d. favorable

7. Companies that operate in a lean production and just-in-time manufacturing environment are more likely to experience
which of the following?
a. Reduced manufacturing flexibility c. Increased production time
b. Increased levels of raw materials inventory d. Increased product quality

8. A "manufacturing cell" is defined as:

a. grouping of all the machinery and equipment that are needed to make a product being available in one area of the
factory
b. restructuring of the factory so that the companies are able to manufacture products quickly
c. an area in the warehouse where similar raw materials are grouped together
d. grouping of all the factories that are engaged in manufacturing similar products

9. In a just-in-time environment, the production process often begins when:

a. products are moved from raw materials to work-in-process
b. a customer places an order
c. the product is delivered to a customer
d. products are moved from work-in-process to finished goods

10. Which of the following is an advantage of lean production and just-in-time (JIT) manufacturing systems?
a. Deliver the product to the customer on time, even if the workers go on a strike
b. Improved product quality and reduced processing time
c. Reduced reliance on highly skilled employees
d. Increased reliance on few suppliers

11. Which of the following is a disadvantage of lean production and just-in-time (JIT) manufacturing systems?
a. Increased customer delivery time c. Decreased flexibility of manufacturing facilities
b. Increased product defects d. Increased reliance on fewer suppliers
12. Which of the following statements is true regarding the lean production and just-in-time (JIT) manufacturing systems?
a. Customers are often less satisfied with the purchased product.
b. The number of product defects often increases.
c. The number of suppliers the company can purchase raw materials from often increases.
d. The factory is often restructured where dissimilar machines are grouped together.

13. Which of the following is a characteristic of a lean production and just-in-time (JIT) manufacturing environment but
not of a traditional manufacturing environment?
a. Increased inventory levels c. Increased reliance on a select number of suppliers
b. Increased product defects d. Increased production time

14. Which of the following is a characteristic of a traditional production environment but not of a lean production and
just-in-time (JIT) manufacturing environment?
a. Increase in the need for highly skilled labor
b. Increase in the need for highly reliable suppliers
c. Reduction in the motivation of the work force
d. Reduction in the processing time

15. Which of the following is a risk that would more likely be seen in a lean production and just-in-time manufacturing
environment than in a traditional production environment?
a. Reduced customer satisfaction due to higher product defects
b. Reduced raw material supply bringing the production process to a halt
c. Increased inventory storage costs
d. Increased production time resulting in lost sales

16. Companies that manufacture products such as custom-designed decks and pools would most likely use which type of
costing?
a. Process costing c. Operations costing
b. Job costing d. Normal costing

17. Which of the following companies would be the most likely to adopt a job order costing system?
a. Beverage manufacturer c. Custom Home Contractor
b. Oil Refinery d. Clothing manufacturer

18. Which of the following types of companies would probably not use job order costing?
a. Car repair shop c. Soft drink manufacturer
b. Doctor's office d. Custom cabinet maker

19. Which of the following types of costs would be specifically tracked or traced and assigned to a specific job in a job
order costing system?
a. Indirect labor c. Indirect materials
b. Direct labor d. Supervisor salary

20. Which of the following types of costs are easily tracked or traced and assigned to a specific job in a job order costing
system?
a. Factory utilities c. Factory assembly-line worker
b. Factory supervisor d. Lubricants used on factory machinery

21. Which of the following types of costs is not easily tracked or traced to a specific job or file in job-order costing?
a. Fabric used in upholstered furniture c. Cleaning supplies used in the factory
b. Medication given to a hospital patient d. Fringe benefits given to assembly-line worker

22. Which of the following would not be included on a job cost report?
a. Marketing costs c. Manufacturing overhead costs
b. Direct labor costs d. Direct materials cost

23. Which of the following should not be considered in the calculation of direct labor cost?
a. The employer's portion of social security and unemployment taxes
b. The wage rate for each employee multiplied by the number of hours each employee works on each job
c. Fringe benefits given to an employee who works on a job
d. Overtime pay to an employee as a result of production problems not related to a specific job
24. Costs associated with factory insurance, maintenance, rent, property taxes, and other similar items are typically
included in manufacturing overhead and assigned to products:
a. primarily based on whatever technique is easiest
b. based on a related cost driver that can be identified and measured
c. if not treated as a period cost
d. based on the relative sales revenue generated by the product

25. In job costing, which of the following types of costs is usually the most difficult to trace to a product?
a. Labor cost of machine operator c. Wood used to build custom furniture
b. Labor cost of factory supervisor d. Rubber used in tire manufacturing

26. Cost allocation:

a. is most often used for direct material costs
b. is most often used for manufacturing overhead costs
c. is most often used for direct labor costs
d. is most often used for nonmanufacturing costs

27. Which of the following costs is the most likely to be allocated to a product in a traditional job costing environment?
a. Direct materials c. Manufacturing overhead
b. Direct labor d. Selling and administrative

28. Which of the following costs is the most likely to not be allocated to a product in a job costing environment?
a. Indirect materials c. Factory utilities
b. Factory maintenance d. Direct labor

29. When using job-order costing, which of the following costs is the least likely to be known in a timely enough manner
for decision-making purposes?
a. Direct labor c. Direct materials
b. Administrative salaries d. Manufacturing overhead

30. Why do many managers desire to use a predetermined overhead rate instead of an actual overhead rate?
a. Because it is impossible to ever know actual overhead costs.
b. Because predetermined overhead rates are more accurate than actual overhead rates.
c. Because actual overhead amounts are often not known in a timely enough manner to make decisions.
d. Because the use of predetermined overhead rates will always result in lower product prices.