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Exam 12: Cost Management for Just-In-Time Environments

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Question 1

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Sifton Electronics Corporation manufactures and assembles electronic motor drives for video cameras. The company assembles the motor drives for several accounts. The process consists of a just-in-time cell for each customer. The following information relates only to one customer's just-in-time cell for the coming year. Projected labor and overhead, $7,370,000; materials costs, $28 per unit. Planned production included 4,000 hours to produce 27,500 motor drives. Actual production for August was 1,600 units, and motor drives shipped amounted to 1,380 units. From the foregoing information, determine the production costs transferred to Finished Goods during August.

A) $369,840
B) $408,480
C) $428,800
D) $473,600

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

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Question 2

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In a just-in-time (JIT) system, indirect labor is traced directly to product cells.

A) True
B) False

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Question 3

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In the just-in-time (JIT) philosophy, unexpected downtime is the result of unreliable processes.

Which of the following is (are) objective(s) of just-in-time (JIT) manufacturing?

Reducing wait time is directly linked to reducing inventory.

In a just-in-time (JIT) environment, the journal entry to record raw materials purchases would include a debit to the raw and in process inventory account.

Which of the following drives work-in-process inventory levels higher?

The budgeted cell conversion cost rate is very similar to the predetermined factory rate because both include only factory overhead costs.

The local college is aggressively working in reducing the time that a student needs to enroll for each semester. Which of the following changes would not help achieve this goal?

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

Just-in-Time (JIT) manufacturing favors organizing work around processes rather than around products.

Reducing wait time is not linked to reducing inventory.

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

Set up time is disregarded as an improvement priority under the ____ manufacturing concept.

Which of the following is characteristic of the traditional cost system?

One inherent risk to using just-in-time philosophy is that companies are at higher risk of inventory shortage during volatile times such as strikes, weather, etc. than the traditional philosophy.

In a just-in-time (JIT) environment, raw materials are delivered less frequently than in a traditional environment.

A quality control activity analysis indicated the following four activity costs of a hotel.

Which of the following is characteristic of the just-in-time system?

Schedule of Activity Costs From the above schedule of activity costs, determine the appraisal costs.