Write “TRUE” if the statement is true, “FALSE” if the statement is false. _____1. One purpose of a JIT inventory system is to have goods ready just when the customer needs them.
Write “TRUE” if the statement is true, “FALSE” if the statement is false.
_____1. One purpose of a JIT inventory system is to have goods ready just when the customer
needs them.
_____2. Under JIT, materials are “pushed” from one workstation to another to ensure timely completion of finished products.
_____3. A company will typically have fewer suppliers under JIT than a traditional system.
_____4. The most effective way to achieve total quality control is to have an Inspection
Department that inspects all incoming raw materials, and inspects goods as they move
along the product flow line.
_____5. The predetermined
for the past period by the total overhead allocation base for the coming period.
_____6. When the underapplied overhead is assigned to Cost of Goods Sold the effect is to
increase the balance on the Cost of Goods Sold account.
_____7. Overapplied overhead occurs when actual overhead is less than applied overhead.
_____8. Service departments are sometimes called indeterminate cost centers, while production
departments would be the final cost centers.
_____9. Assembly department is an example of a production department because it IS in charge in
the manufacture of goods.
_____10. The direct method is a method of cost allocation that charges costs of service
departments to production departments and ignores any services used by other service departments.
_____11. Under the sequential method of cost allocation, the final amount of pesos allocated to
any production department is influenced by the order in which the allocation is made
from the service departments.
_____12. When a blanket rate is used, this means that a single rate is used to allocate overhead to
all departments in the company.
_____13. With the use of the algebraic method, each department’s costs are set out in an
equation where total costs equals the sum of direct and allocated costs.
_____14. When departmentalized rates is used to allocate overhead costs, all departments
including service departments will compute for such rates.
_____15. Over/under applied overhead must be closed and allocated to Cost of Goods Sold,
Finished Goods and Raw Materials accounts, when the amount is considered material or
significant.
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