Question 1

Value is defined as any action or process for which a customer would be willing to pay.

Accepted Answer

A) True 
 B)False

Question 2

Warranty costs are an example of:

Accepted Answer

A) prevention costs. 
B) appraisal costs. 
C) internal failure costs. 
D) external failure costs. 
A) prevention costs. 
B) appraisal costs. 
C) internal failure costs. 
D) external failure costs.

Question 3

DJK Enterprises are using the Kaizen approach to budgeting for 2011 . The budgeted income statement for January 2011 is as follows:
 
Under the Kaizen approach, cost of goods sold and variable operating expenses are budgeted to decline by 1% per month.
-What is the budgeted gross margin for March 2011?

Accepted Answer

A) $196,020 
B) $198,000 
C) $204,020 
D) $205,970 
A) $196,020 
B) $198,000 
C) $204,020 
D) $205,970

Question 4

Experience shows that it is more expensive to prevent defects than to detect and repair them.

Accepted Answer

A) True 
 B)False

Question 5

Characteristics of just-in-time manufacturing include all of the following EXCEPT:

Accepted Answer

A) the ability to process items in large batches. 
B) making a product only when the customer requires it. 
C) no work-in-process inventories. 
D) a problem anywhere can stop production. 
A) the ability to process items in large batches. 
B) making a product only when the customer requires it. 
C) no work-in-process inventories. 
D) a problem anywhere can stop production.

Question 6

Kaizen costing assumes engineers and managers possess the best knowledge to improve processes and reduce costs.

Accepted Answer

A) True 
 B)False

Question 7

All of the following are true regarding benchmarking EXCEPT:

Accepted Answer

A) that buy-in by employees is critical. 
B) benchmarking can save time and money by avoiding the mistakes made by others. 
C) that the purpose is to gather information regarding the best practices of others. 
D) benchmarking initiatives generally result in quick changes to the work environment. 
A) that buy-in by employees is critical. 
B) benchmarking can save time and money by avoiding the mistakes made by others. 
C) that the purpose is to gather information regarding the best practices of others. 
D) benchmarking initiatives generally result in quick changes to the work environment.

Question 8

After the change,a decreased amount of work-in-process inventory is projected because:

Accepted Answer

A) of reduced cycle times resulting from a more continuous production flow. 
B) of lower financing costs and the reduced need for storage and handling. 
C) larger batches can be processed faster and more efficiently. 
D) All of the above are correct. 
A) of reduced cycle times resulting from a more continuous production flow. 
B) of lower financing costs and the reduced need for storage and handling. 
C) larger batches can be processed faster and more efficiently. 
D) All of the above are correct.

Question 9

Characteristics of a product layout include:

Accepted Answer

A) raw materials and purchased parts are delivered directly to the production line where they are needed. 
B) low-volume production. 
C) a U-shaped layout. 
D) small batches of unique products. 
A) raw materials and purchased parts are delivered directly to the production line where they are needed. 
B) low-volume production. 
C) a U-shaped layout. 
D) small batches of unique products.

Question 10

________ is the most common method of gathering information where companies independently obtain information about one or several other companies that excel in the area of interest.

Accepted Answer

A) Cooperative benchmarking 
B) Database benchmarking 
C) Unilateral (covert)benchmarking 
D) Indirect/third party benchmarking 
A) Cooperative benchmarking 
B) Database benchmarking 
C) Unilateral (covert)benchmarking 
D) Indirect/third party benchmarking

Question 11

High levels of inventory result in all EXCEPT:

Accepted Answer

A) high moving, handling, and storage costs. 
B) increased product obsolescence and damage. 
C) increased financing costs. 
D) idle facilities. 
A) high moving, handling, and storage costs. 
B) increased product obsolescence and damage. 
C) increased financing costs. 
D) idle facilities.

Question 12

Carey Manufacturing,Inc.,is considering reorganizing its plant into manufacturing cells. The following estimates have been prepared to evaluate the benefits from the reorganization:
Before the change After the change
   
Required:
a. Why do the layout reorganization estimates include
1. a decrease in work-in-process inventory?
2.a decrease in direct material costs as a percentage of sales?
3.an increase in sales?
b. As a result of the layout reorganization,what amount of annual change is projected
1.from carrying reduced levels of work-in-process inventory?
2.for incremental manufacturing costs?
3.in total benefits?

Accepted Answer

a.
1. Layout reorganization estimates in

Question 13

Discuss cost reductions that can result from reducing work-in-process inventory.

Accepted Answer

Decreasing work-in-process inventory res

Question 14

Measures of JIT (just-in-time)manufacturing reliability include all of the following EXCEPT:

Accepted Answer

A) defect rates. 
B) labor and machine utilization ratios. 
C) cycle times. 
D) percent of on-time deliveries. 
A) defect rates. 
B) labor and machine utilization ratios. 
C) cycle times. 
D) percent of on-time deliveries.

Question 15

Vander Belt Manufacturing, Inc., is considering reorganizing its plant into manufacturing cells. The following estimates have been prepared to evaluate the benefits from the reorganization:
 
Inventory carrying costs are estimated to be 11%  per year.
-After the change,sales are projected to increase because:

Accepted Answer

A) of shorter delivery lead times. 
B) of higher sales prices. 
C) of the ability to process larger batch sizes. 
D) All of the above are correct. 
A) of shorter delivery lead times. 
B) of higher sales prices. 
C) of the ability to process larger batch sizes. 
D) All of the above are correct.

Question 16

Bingington Corporation is using the Kaizen approach to budgeting for 2011.The budgeted income statement for the month ended January 31,2011 is as follows:
 
Under the Kaizen approach,cost of goods sold and variable operating expenses are budgeted to decline by 2% per month.
Required:
Prepare a Kaizen-based budgeted income statement for the month ended February 28,2011.Assume sales are constant each month.

Accepted Answer

The answer of Bingington Corporation is using the Kaizen approach...

Question 17

Lean manufacturing:

Accepted Answer

A) has a central philosophy that resource spending that does not add value must be eliminated. 
B) defines value as any action or process for which the customer is willing to pay. 
C) is derived from the Toyota Production System. 
D) All of the above are correct. 
A) has a central philosophy that resource spending that does not add value must be eliminated. 
B) defines value as any action or process for which the customer is willing to pay. 
C) is derived from the Toyota Production System. 
D) All of the above are correct.

Question 18

In lean manufacturing,any resource spending that does not create value for the end customer is wasteful and must be eliminated.

Accepted Answer

A) True 
 B)False

Value is defined as any action or process for which a customer would be willing to pay.

Warranty costs are an example of:

Experience shows that it is more expensive to prevent defects than to detect and repair them.

Characteristics of just-in-time manufacturing include all of the following EXCEPT:

Kaizen costing assumes engineers and managers possess the best knowledge to improve processes and reduce costs.

All of the following are true regarding benchmarking EXCEPT:

After the change,a decreased amount of work-in-process inventory is projected because:

Characteristics of a product layout include:

________ is the most common method of gathering information where companies independently obtain information about one or several other companies that excel in the area of interest.

High levels of inventory result in all EXCEPT:

Discuss cost reductions that can result from reducing work-in-process inventory.

Measures of JIT (just-in-time)manufacturing reliability include all of the following EXCEPT:

Lean manufacturing:

In lean manufacturing,any resource spending that does not create value for the end customer is wasteful and must be eliminated.

How Management Accounting Information Supports Decision Making

The Balanced Scorecard and Strategy Map

Using Costs in Decision Making

Accumulating and Assigning Costs to Products

Activity-Based Cost Systems

Measuring and Managing Customer Relationships

Measuring and Managing Life-Cycle Costs

Behavioral and Organizational Issues in Management Accounting and Control Systems

Using Budgets for Planning and Coordination

Financial Control

Filters

Exam 7: Measuring and Managing Process Performance

Value is defined as any action or process for which a customer would be willing to pay.

Warranty costs are an example of:

Experience shows that it is more expensive to prevent defects than to detect and repair them.

Characteristics of just-in-time manufacturing include all of the following EXCEPT:

Kaizen costing assumes engineers and managers possess the best knowledge to improve processes and reduce costs.

All of the following are true regarding benchmarking EXCEPT:

After the change,a decreased amount of work-in-process inventory is projected because:

Characteristics of a product layout include:

________ is the most common method of gathering information where companies independently obtain information about one or several other companies that excel in the area of interest.

High levels of inventory result in all EXCEPT:

Discuss cost reductions that can result from reducing work-in-process inventory.

Measures of JIT (just-in-time)manufacturing reliability include all of the following EXCEPT:

Lean manufacturing:

In lean manufacturing,any resource spending that does not create value for the end customer is wasteful and must be eliminated.

How Management Accounting Information Supports Decision Making

The Balanced Scorecard and Strategy Map

Using Costs in Decision Making

Accumulating and Assigning Costs to Products

Activity-Based Cost Systems

Measuring and Managing Customer Relationships

Measuring and Managing Life-Cycle Costs

Behavioral and Organizational Issues in Management Accounting and Control Systems

Using Budgets for Planning and Coordination

Financial Control

Filters