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

Squirrel Co.operates in a lean manufacturing environment.For June production, Squirrel purchased 6,000 units of raw materials at $6.00 per unit on account.The journal entry required to record this transaction is:

Conan Electronics Corporation manufactures and assembles electronic motor drives for video cameras.The company assembles the motor drives for several accounts.The process consists of a lean cell for each customer.The following information relates only to one customer's lean cell.For the year, planned labor and overhead was $80,000,000; materials costs, $25 per unit.Planned production included 9,600 hours to produce 76,800 motor drives.Actual production for the month of August was 5,200 units, and motor drives shipped amounted to 5,040 units.From the foregoing information, determine the budgeted cell conversion cost per hour.

A quality control activity analysis indicated the following four activity costs of a hotel. Sales are $750,000 for the year.Prepare a cost of quality report.

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

Under a lean environment, employees have the responsibility and authority to

Maximum effectiveness and efficiency are reached when the lean philosophy is used by both manufacturers and their suppliers.

From the above schedule, calculate the a value-added and b non-value-added costs.

manufacturing deals with several suppliers in hopes of finding the best price.

Which of the following is a value-added activity?

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

Accounting for lean operations requires fewer transactions because

Kilbuck Manufacturing operates in a lean manufacturing environment.Kilbuck's actual conversion costs for the month of May follow: The journal entry to record May's conversion costs will include:

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: 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.

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

In a lean system, there are more transactions to record than there are in a traditional system.

From the foregoing information, determine the production costs transferred to Cost of Goods Sold during August.'

From the above schedule, calculate the internal failure costs.