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Exam 27: Lean Manufacturing and Activity Analysis

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Question 51

True/False

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With lean manufacturing, nonfinancial measures are used more often for long-term operating decisions than are financial accounting measures.

A) True
B) False

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Question 52

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From the foregoing information, determine the manufacturing cost per unit.

A) $240.00
B) $268.00
C) $296.00
D) $1,870.50

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

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Question 53

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Which of the following is a characteristic of a lean accounting system?

By spending more in costs of controlling quality, the costs of failing to control quality will decrease.

In a lean accounting system, the work in process and raw materials inventory accounts are combined.

Match each of the following quality control activities with the appropriate classification (a or b). -Maintaining equipment A)Value-added B)Non-value-added

When performing activity analysis on administrative processes, the "product" is often information.

How are the objectives of lean manufacturing achieved?

From the provided schedule of activity costs, compute the percentage of non-value-added activities. Round to one decimal place.

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

Match each of the following activities with the appropriate quality cost classification (a-d). -Training operators A)Prevention cost B)Appraisal cost C)Internal failure cost D)External failure cost

Large batch sizes increase lead time.

Pull manufacturing companies produce mainly to stock inventory.

Schedule of Activity Costs ​ -From the provided schedule of activity costs, determine the internal failure costs.

Match each of the following activities with the appropriate quality cost classification (a-d). -Processing returned merchandise A)Prevention cost B)Appraisal cost C)Internal failure cost D)External failure cost

From the foregoing information, determine the amount of the conversion costs charged to Raw and In Process Inventory during August.

In a lean accounting system, indirect labor is traced directly to product cells.

In a lean environment, process problems are more visible than they are in a traditional environment.

Bright Lamp Company has budgeted its conversion cost for small lamp production as $85,000 for 1,300 production hours. Each unit produced by the cell requires 15 minutes of process time. During the month, 3,800 units are manufactured in the cell. The estimated materials cost is $18 per unit. Journalize entries for the following: a. Materials are purchased to produce 4,000 units. b. Conversion costs are applied to 3,800 units of production. Round to the nearest cent. c. The cell completes 3,650 units, which are placed into finished goods. Round to the nearest dollar.

Schedule of Activity Costs ​ -A customer service department has the following resolution response time data: Average Response Time First contact 0.25 hr.Service scheduling 0.50 hr.Wait for service 24.00 hrs.Service 1.50 hrs.Total resolution time 26.25 hrs.What is the value-added ratio (rounded to one decimal place) in this process?