Exam 20: Inventory Management, just-In-Time, and Simplified Costing Methods

A "push-through" system,often described as a materials requirement planning system,focuses first on the forecasted amount and timing of finished goods and then determines the demand for materials components and subassemblies at each of the prior stages of production.

Which of the following statements is true of lean accounting?

Companies that have low manufacturing lead time usually find that a version of backflush costing will report cost numbers totally different to what a sequential costing approach would report.

Beryl Company sells 900 flash drives per week.Purchase-order lead time is 2 weeks and the economic-order quantity is 1625 units.What is the reorder point?

Which of the following statements is true of just-in-time production systems?

Corry Corporation manufactures filters for cars,vans,and trucks.A backflush costing system is used and standard costs for a filter are as follows: Filters are scheduled for production only after orders are received,and are shipped immediately upon completion.This results in product costs being charged directly to cost of goods sold.In December,3,000 filters were produced and shipped.Materials were purchased at a cost of $8,450 and actual conversion costs of $13,650 were recorded. Required: Prepare journal entries to record December's costs for the production of the filters.

The supply chain describes the flow of goods,services,and information from the initial sources of materials and services to the delivery of products to consumers,regardless of whether those activities occur in the same company or in other companies.

The Allianz Company produces a specialty wood furniture product,and has the following information available concerning its inventory items: Annual demand is 33,000 packages per year.The purchase price per package is $50. What are the total relevant costs,assuming the quantity ordered equals 1500 units?

Globe Inc.is a distributor of DVDs.DVD Mart is a local retail outlet which sells blank and recorded DVDs.DVD Mart purchases DVDs from Globe at $30.00 per DVD;DVDs are shipped in packages of 66.Globe pays all incoming freight,and DVD Mart does not inspect the DVDs due to Globe's reputation for high quality.Annual demand is 312,000 DVDs at a rate of 6500 DVDs per week.DVD Mart earns 10% on its cash investments.The purchase-order lead time is one week.The following cost data are available: How many deliveries will be made during each time period?

Carrying costs only include those costs that are entered into the financial accounting system and do not include the opportunity cost of the investment tied up in inventory.

A company's inventory levels are dependent on a number of variables including the demand for the product,supplier relationships,and supplier relationships with their manufacturers.

In lean accounting environments,it is critical that work-in-process and finished goods accounting be accurate for accurate financial accounting and pricing decisions.

To comply with GAAP,backflush cost numbers can be adjusted by recording a journal entry.

Which of the following is a disadvantage of an enterprise resource planning (ERP)system?

Successful implementation of a JIT production system and effective accomplishments of its goals should result in a decrease in the inventory turnover ratio and a decrease in the number of days of inventory on hand.

Lean accounting is much simpler than traditional product costing.Why?

The annual relevant carrying costs of inventory consists of the sum of the ________.

Traditional normal and standard costing systems usually use 4 trigger points to record the flow of costs through the production system.Such costing is called ________.

If Kenton Inc.has a safety stock of 215 units and the average weekly demand is 35 units,how many days can be covered if the shipment from the supplier is delayed by 16 days?

The Allianz Company produces a specialty wood furniture product,and has the following information available concerning its inventory items: Annual demand is 33,000 packages per year.The purchase price per package is $50. What is the annual relevant carrying costs?