Exam 19: Value-Based Systems- Abm and Lean

In just-in-time manufacturing,the basic cost classifications used in product costing are materials and conversion costs.

Which one of the four levels of the cost hierarchy would be used by a dress manufacturer that uses activity-based management for the routine maintenance of sewing machines?

A manufacturer of audio equipment employing an activity-based cost hierarchy uses the unit,batch,product,and facility levels to classify its activities. A facility-level activity is

In a traditional environment,costs are tracked through the various production departments as products or services move through the production process.

Lean uses JIT and reorganizes many activities so that they are performed within the work cells.

In a traditional operating environment,a company usually

A company's value chain includes the value chains of its suppliers but not its customers.

Define activity-based costing.Explain why this approach to cost assignments is superior to the traditional method of using a plantwide overhead cost rate.Will activity-based costing always result in lower product costs? Defend your answer.

How can activity-based systems help managers in a global marketplace?

Managers eliminate non-value-adding activities that are not essential to an organization.

A just-in-time philosophy seeks to minimize inventories.

Last year,Amanda Jones opened a candy store in a busy shopping center.She spent a lot on advertising and attracted many customers into the store,but very few customers made purchases and sales were declining.Amanda paid attention to questions and requests made by customers and determined that they often requested items that were within the scope of her business but that she did not carry.When she offered to order items for her customers,delivery was usually too late and,again,sales were lost.What measures should Amanda take to improve her business?

A just-in-time operation would attempt to eliminate inspection time.

What would a company using an activity-based management approach attempt to do in regard to activities that add value to the product and those that do not?

A work cell is an autonomous production line that can perform only one required operation efficiently at a time.

In a just-in-time setting,the time spent reworking defective units is called __________ time.

Comparing the goals of activity-based management (ABM)and lean operations,we can say that __________ aim(s)to simplify activities.

Resser Corporation manufactures serving trays and utensils for use by airlines for meal service.Several airlines order these products in large quantities.Resser had adopted an activity-based management philosophy.Listed below are the principal activities of the company. Product inspection Product marketing Product packaging Accounting Materials storage Moving work in process Product engineering Inventory control Product scheduling Production - assembly Materials purchasing Production area cleanup Production -machine setup Human resources service Building maintenance Product rework New product design Depreciation of building a. Identify activities that are nonvalue-adding. b. Analyze each of the nonvalue-adding activities and determine which are necessary. Suggest how each of the activities that you classified as unnecessary could be reduced or eliminated.

The actual amount of time that a product is being worked on is known as the

Just-in-time operations attempt to significantly reduce