Question

1) Which management function is a manager performing when objectives are being established?

a) regulating

b) planning

c) motivating

d) directing

2) Which one of the following is a similarity of both a job order and a process cost system?

a) They both track direct materials and direct labor, but not manufacturing overhead.

b) They both track conversion costs, but not materials.

c) They both track the same three manufacturing cost elements – direct materials, direct labor, and manufacturing overhead.

d) They both are used for the same type of inventory production items.

3) In the Carter Company, there are 1,000 units in beginning work in process, 9,000 units started into production, and 800 units in ending work in process 40% completed. How many physical units are to be accounted for?

a) 10,000

b) 9,200

c) 10,800

d) 8,800

4) Just-in-time processing

a) is based on a just-in-case philosophy.

b) results in a push approach.

c) minimizes inventory storage and waiting time.

d) all of these.

Answer 1

1) Answer is b) planning

Planning is a function performed by manager for future. It involves setting strategic objectives and goals and then lying action plans to achieve the same. A plan for a year usually starts during the previous year by the team members. The team gets together and sets the goals to be achieved for the next year and the targets are tracked on monthly basis. Regulating, motivating and directing are other functions of management but they are not related with setting objectives

2) Answer is c)

Job costing and process costing are similar costing methods in the way they track direct material, direct labor and manufacturing overheads. Direct material is tracked based on material requisition slip, labor based on time sheet maintained for each job/process and manufacturing overheads is pre-determined and applied based on cost driver like machine hours or labor hours

3) Answer is a) 10,000

The total units to be accounted for are the opening work in process inventory and the units started into production. The total units to be accounted should be equal to the total units accounted for. This reconciliation is part of the physical flow of units in the process costing. It is required for computation of equivalent units in the production cost report and calculation of cost per equivalent unit to assign the cost to the units completed and transferred out and closing inventory in work in process.

4) Answer is c)

Just in time process is a managerial technique which is based on pull approach rather than push approach. The inventories are maintained minimum under this approach to reduce the inventory storage cost and waiting time. It is widely used technique to reduce the inventory related costs and helps in cost management of the firm through cost control.