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

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Question 61

Multiple Choice

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The budgeted cell conversion cost rate includes which of the following?

A) only factory overhead
B) only direct labor and direct materials
C) direct labor, direct materials, and factory overhead
D) only direct labor and factory overhead

E) None of the above
F) C) and D)

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Question 62

Multiple Choice

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

A) Processing time
B) Wait time during inspection
C) Wait time in inventory
D) Both B and C

E) A) and D)
F) None of the above

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Question 63

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

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

Under the just-in-time production concept, employees are better utilized if they are experts in one operation rather than wasting time training them to learn various production operations.

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

Schedule of Activity Costs

All lead time are considered as value-added lead time.

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

Large batch sizes increase lead time.

Cariboo 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:

In a just-in-time (JIT) system, the work in process and raw materials inventory accounts are combined.

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

A non-financial measure is operating information that has not been translated into dollars.

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

The just-in-time (JIT) philosophy attempts to reduce setup times, which will:

In a push manufacturing system, raw materials are released to production based on actual customer orders.

Which of the following are features of the just-in-time 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

Under a JIT environment, employees have the responsibility and authority to

Axelgold Company produces parts for the auto industry. Part X2 is machined in Department #1, which has the following budgeted conversion costs: