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

Maximum effectiveness and efficiency are reached when the lean philosophy is used mainly by manufacturers.

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 make-to-order company matches its production schedules to actual customer orders.

Which of the following is characteristic of the lean system?

Identity the following by their type of quality cost. -Scrap

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 total activity cost.

Kilbuck Manufacturing operates in a lean manufacturing environment. Kilbuck's actual conversion costs for the month of May follow: Direct and indirect labor $150,000 Machine depreciation 85,000 Maintenance and supplies 60,000 Total conversion costs $295,000 The journal entry to record May's conversion costs will include:

A local college is aggressively working to reduce the time it takes students to enroll for each semester. Which of the following changes would not help achieve this goal?

Traditional manufacturing emphasizes all of the following except

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 non-value-added costs.

In the lean principles philosophy, unexpected downtime is the result of unreliable processes.

Lead time reduction can be a cost-saving goal for any processed item.

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

Axelgold Company produces parts for the auto industry. Part X2 is machined in Department #1, which has the following budgeted conversion costs: Labor \ 330,000 Depreciation 32,000 Maintenance 12,000 Supplies 26,000 Total \ 400,000 All costs are driven by machine hours. Total possible hours for the year are 2,800. It takes .03 hours to machine one unit of Part X2. a) Compute Department #1's budgeted cell conversion cost rate for the current year. Round to the nearest cent. b) Compute Part X2's budgeted cell conversion cost per unit. Round to the nearest cent.

Lean manufacturing philosophy reduces all of the following except

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

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

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

In a lean environment, the journal entry to record conversion costs 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.