Exam 27: Lean Principles, Lean Accounting, and Activity Analysis

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

Lean manufacturing focuses on reducing time, cost, and poor quality in processes.

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: Direct and indirect labor \ 900,000 Machine depreciation 125,000 Maintenance and supplies 375,000 Utilities 225,000 Total \1 ,625,000 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.

Examples of transforming a traditional manufacturing environment to a lean environment is to do all of the following except

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

Which of the following results in long lead time?

Schedule of Activity Costs Quality Control Activities Activity Cost Frocess audits \ 50,000 Training of machine operators 28,000 Frocessing returned products 19,000 Scrap processing disposal) 25,000 Rework 8,000 Freventative maintenance 30,000 Froduct design 46,000 Warranty work 12,000 Finished goods inspection 23,000 -From the above schedule of activity costs, determine the value-added costs.

Which of the following is not an external failure cost?

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

Which of the following is an example of a nonfinancial measure?

Employee involvement does not include performing any indirect manufacturing functions.

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

Nonfinancial accounting information is used more often for long-term operating decisions than is financial information.

Schedule of Activity Costs Quality Control Activities Activity Cost Product testing \ 55,000 Assessing vendor quality 26,000 Recalls 18,000 Rework 29,000 Scrap disposal 8,000 Product design 30,000 Training machine operators 46,000 Warranty work 12,000 Process audits 22,000 -From the above schedule, calculate the internal failure costs.

Schedule of Activity Costs Quality Control Activities Activity Cost Product testing \ 55,000 Assessing vendor quality 26,000 Recalls 18,000 Rework 29,000 Scrap disposal 8,000 Product design 30,000 Training machine operators 46,000 Warranty work 12,000 Process audits 22,000 -From the above schedule, compute the percentage of non-value-added activities.

Which of the following is are) objectives) of lean manufacturing?

The lean philosophy attempts to reduce setup times, which will:

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

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

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