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Exam 12: Lean Principles, Lean Accounting, and Activity Analysis

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Question 1

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

A) True
B) False

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Question 2

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Which of the following statements best describes the relationship among the costs of quality?

A) Spending more on prevention and appraisal costs will reduce the total overall costs of quality.
B) Spending more on prevention and appraisal costs will increase the total overall costs of quality.
C) Adequate spending on prevention and appraisal costs will eliminate all internal and external failure costs.
D) The amount spent on prevention and appraisal costs has no impact on the amount spent on internal and external failure costs.

E) C) and D)
F) All of the above

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A

Question 3

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

What do lean manufacturers demand from their vendors?

A process-oriented layout segments production facilities into functional departments.

A lean nonmanufacturing process can be accomplished by consolidating, in one area, all of the services provided to a customer.

Identify the following quality control activities as either value-added or non-value-added. -Design engineering

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

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

Identify the following quality control activities as either value-added or non-value-added. -Processing returned materials

In a lean environment, the journal entry to record raw materials purchases would include a debit to the raw and in process inventory account.

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

The lean philosophy views inventory as a necessary buffer to protect against process problems.

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

Identify the following quality control activities as either value-added or non-value-added. -Customer service calls

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

Lean manufacturing favors organizing work around processes rather than around products.

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

Lean manufacturing philosophy reduces all of the following except