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Exam 26: Lean Manufacturing and Activity Analysis

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Question 21

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Costs of failing to control quality include prevention costs and external failure costs.

A) True
B) False

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Question 22

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Lead time is the process time between start and completion.

A) True
B) False

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Question 23

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

The Kwanika Co.operates in a lean manufacturing environment.During its first year of operations,Kwanika budgeted for 40,000 hours in the production of 100,000 units in its cell X-22.Material costs were $7 per unit.Cell X-22 conversion costs were budgeted for the year as follows: ​ During January,material for 8,400 units was purchased on account.There were 8,200 units manufactured and 8,000 were sold shipped to customers for $35 each.Journalize: (a)the material purchases; (b)the application of conversion costs; (c)the transfer from work in process to finished goods; and (d)the sales (were made on account)and associated cost of goods sold for the month of January.

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

From the above schedule of activity costs,determine the non-value-added costs.

Alaskan Pattern Company makes dressmakers' patterns using a machine that stamps the pattern outline onto tissue paper.The stamping center produced 40,000 patterns in August,with a machine time per pattern of 20 seconds.Annual budgeted cell conversion costs were as follows: ​ Alaskan planned 2,500 total machine hours for the year. Calculate Alaskan's budgeted cell conversion cost rate for the year.

From the above schedule of activity costs,determine the appraisal costs.

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

A backflush accounting system uses work in process inventories as control points between each process step.

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

Which of the following is considered non-value-added lead time?

Connally Company's payroll department required that every time card be checked twice to ensure pay accuracy.The company has 1,000 employees and has determined that the checks cost the company $8,000 per year.They have decided to change this policy and only check those names which appear on the exceptions report and a random check on the entire payroll.Currently only 15% of the payroll is evaluated each payroll.Determine the inspection activity cost per employee on the 1,000 employees both before and after the improvement.

Push manufacturing (made-to-stock)is a traditional approach to manufacturing.

Which of the following is best suited to providing timely and focused performance information?

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

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

A quality control activity analysis indicated the following four activity costs of a hotel. ​ Sales are $750,000 for the year.Prepare a cost of quality report.

In a lean environment,the journal entry to record raw materials purchases would include a credit to the raw materials inventory account.

In a lean environment,raw materials are delivered less frequently than in a traditional environment.