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Exam 27: Lean Principles, Lean Accounting, and Activity Analysis

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Question 71

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In a lean environment, operations only respond to customer orders.

A) True
B) False

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Question 72

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Schedule of Activity Costs $\begin{array}{|l|l|}\hline \text { Quality Control Activities } & \text { Activity Cost } \\\hline \text { Frocess audits } & \$ 50,000 \\\hline \text { Training of machine operators } & 28,000 \\\hline \text { Frocessing returned products } & 19,000 \\\hline \text { Scrap processing disposal) } & 25,000 \\\hline \text { Rework } & 8,000 \\\hline \text { Freventative maintenance } & 30,000 \\\hline \text { Froduct design } & 46,000 \\\hline \text { Warranty work } & 12,000 \\\hline \text { Finished goods inspection } & 23,000 \\\hline\end{array}$ -From the above schedule of activity costs, determine the prevention costs.

A) $30,000
B) $74,000
C) $76,000
D) $104,000

E) B) and C)
F) A) and D)

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Question 73

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Which of the following is a value-added activity?

Lead time includes both value-added time and non-value-added time.

Identity the following by their type of quality cost. -Vendor quality

Identity the following by their type of quality cost. -Recalls

From the foregoing information, determine the production costs transferred to Finished Goods during August.

In a push manufacturing system, raw materials are released to production based on forecasted demand.

Which of the following are features of the lean manufacturing system? a) maintaining excess inventory to ensure that products will always be available b) cross training of employees c) giving employees additional authority and responsibility d) product-oriented layout e) increased set-up time

Which of the following is an example of value-added time?

Which of the following is characteristic of a lean production layout?

Identify the following quality control activities as either value-added or non-value-added. -Scrap material

Schedule of Activity Costs $\begin{array}{|l|l|}\hline \text { Quality Control Activities } & \text { Activity Cost } \\\hline \text { Frocess audits } & \$ 50,000 \\\hline \text { Training of machine operators } & 28,000 \\\hline \text { Frocessing returned products } & 19,000 \\\hline \text { Scrap processing disposal) } & 25,000 \\\hline \text { Rework } & 8,000 \\\hline \text { Freventative maintenance } & 30,000 \\\hline \text { Froduct design } & 46,000 \\\hline \text { Warranty work } & 12,000 \\\hline \text { Finished goods inspection } & 23,000 \\\hline\end{array}$ -From the above schedule of activity costs, determine the appraisal costs.

Lean manufacturing is also called make-to-order manufacturing.

Prevention costs and appraisal costs are considered costs of controlling quality.

The lean manufacturing philosophy views inventory as an unnecessary waste of resources.

Make-to-order companies typically produce in small batch sizes.