Question 1

Responsibility for recognizing and implementing process improvements under the kaizen philosophy of continuous improvement rests with:

Accepted Answer

A)  Line managers. 
B)  Self-directed worker teams. 
C)  Upper-level management. 
D)  The corporate board of directors. 
A)  Line managers. 
B)  Self-directed worker teams. 
C)  Upper-level management. 
D)  The corporate board of directors.

Question 2

If budgeted capacity exceeds the actual capacity used, there will be an unfavorable efficiency waste variance.

Accepted Answer

A) True 
 B)False

Question 3

Under the Taguchi loss function, the cost of not meeting specifications grows linearly with the size of the departure from standard.

Accepted Answer

A) True 
 B)False

Question 4

Kecks Bottling Company produces 2-liter soda bottles in its Somerset plant using an injection-molding machine that has a theoretical capacity of 60,480 bottles per week. For the most recently completed week, the company's capacity cost management system reported actual production of 15,144 bottles. This represented 72% utilization of the machine's normal capacity of 21,168 bottles. Based on this rate of capacity utilization, line managers are advocating for the acquisition of an additional injection-molding machine. What measure of capacity utilization would provide a better signal of the need for an additional machine?

Accepted Answer

A)  Capacity utilization based on theoretical capacity. 
B)  Capacity utilization based on market demand. 
C)  Capacity utilization based on normal capacity adjusted for the efficiency waste variance. 
D)  Capacity utilization based on productive capacity adjusted for idle capacity. 
A)  Capacity utilization based on theoretical capacity. 
B)  Capacity utilization based on market demand. 
C)  Capacity utilization based on normal capacity adjusted for the efficiency waste variance. 
D)  Capacity utilization based on productive capacity adjusted for idle capacity.

Question 5

Under the kaizen philosophy, line managers remain "in charge," setting standards and rewarding performance.

Accepted Answer

A) True 
 B)False

Question 6

Windsor Company is a distributor of California wines. In a recent week, the company received 400 orders with an average of five lines per order. During the week, 368 of the orders were shipped on time. The company back-orders on average 1.75 out of every five items ordered by a customer. 
-What is the company's on-time shipment percentage?

Accepted Answer

A)  65% 
B)  59.8% 
C)  35% 
D)  92% 
A)  65% 
B)  59.8% 
C)  35% 
D)  92%

Question 7

Which of the following conditions have been shown necessary for a ratchet effect to operate in an incentive system?

Accepted Answer

A)  There must be an entrenched minimum standard of performance. 
B)  A principle encouraging innovation must be implemented. 
C)  The minimum standard must go up or down with each innovation. 
D)  All of the above are necessary to the operation of a ratchet effect. 
A)  There must be an entrenched minimum standard of performance. 
B)  A principle encouraging innovation must be implemented. 
C)  The minimum standard must go up or down with each innovation. 
D)  All of the above are necessary to the operation of a ratchet effect.

Question 8

Windsor Company is a distributor of California wines. In a recent week, the company received 400 orders with an average of five lines per order. During the week, 368 of the orders were shipped on time. The company back-orders on average 1.75 out of every five items ordered by a customer.
- What percentage of customers fails to receive a complete order the first time?

Accepted Answer

A)  35% 
B)  8% 
C)  92% 
D)  65% 
A)  35% 
B)  8% 
C)  92% 
D)  65%

Question 9

Capacity utilization measurement based on theoretical capacity rather than normal capacity will provide a more useful signal to a decision to acquire additional capacity.

Accepted Answer

A) True 
 B)False

Responsibility for recognizing and implementing process improvements under the kaizen philosophy of continuous improvement rests with:

If budgeted capacity exceeds the actual capacity used, there will be an unfavorable efficiency waste variance.

Under the Taguchi loss function, the cost of not meeting specifications grows linearly with the size of the departure from standard.

Under the kaizen philosophy, line managers remain "in charge," setting standards and rewarding performance.

Which of the following conditions have been shown necessary for a ratchet effect to operate in an incentive system?

Capacity utilization measurement based on theoretical capacity rather than normal capacity will provide a more useful signal to a decision to acquire additional capacity.

Business Planning and Analysis: An Integrative Framework for Management Accounting

Measuring and Evaluating Performance

Defining and Using Cost Estimates

Cost Pools, Capacity, and Activity- Based Costing

Understanding the Management Process

Planning in the Product Domain

Assessing and Improving Product Profitability

Setting Process Expectations

Setting Performance Expectations at the Entity Level

Setting Performance Expectations in Large, Complex Organizations

Evaluating and Improving Entity Performance

Setting and Achieving Targets in the Customer Domain

Strategic Cost Management and the Value Chain Domain

Filters

Exam 9: Evaluating and Improving Process Performance

Responsibility for recognizing and implementing process improvements under the kaizen philosophy of continuous improvement rests with:

If budgeted capacity exceeds the actual capacity used, there will be an unfavorable efficiency waste variance.

Under the Taguchi loss function, the cost of not meeting specifications grows linearly with the size of the departure from standard.

Under the kaizen philosophy, line managers remain "in charge," setting standards and rewarding performance.

Which of the following conditions have been shown necessary for a ratchet effect to operate in an incentive system?

Capacity utilization measurement based on theoretical capacity rather than normal capacity will provide a more useful signal to a decision to acquire additional capacity.

Business Planning and Analysis: An Integrative Framework for Management Accounting

Measuring and Evaluating Performance

Defining and Using Cost Estimates

Cost Pools, Capacity, and Activity- Based Costing

Understanding the Management Process

Planning in the Product Domain

Assessing and Improving Product Profitability

Setting Process Expectations

Setting Performance Expectations at the Entity Level

Setting Performance Expectations in Large, Complex Organizations

Evaluating and Improving Entity Performance

Setting and Achieving Targets in the Customer Domain

Strategic Cost Management and the Value Chain Domain

Filters