Exam 22: Activity-Based Systems-Abm and Lean

Just-in-time operations attempt to significantly reduce

Storage time is the time a product spends waiting to be worked on once it arrives at the next operation.

Xavier Products Company is in the process of adopting the just-in-time operating philosophy for its trophy-making operations. Indicate which of the following overhead costs is a nonvalue-adding cost (NVA).

A framework for classifying value-adding and nonvalue-adding activities according to the level at which their costs are incurred is called a

Nonproduction costs are not included in full product cost.

A just-in-time operation seeks to eliminate all product support functions.

You have been invited to address the Students In Free Enterprise (SIFE) team of your alma mater. The topic the team has chosen is the just-in-time philosophy in terms that beginning business students can readily comprehend. The meeting is taking place in the college cafeteria. Reservations and menu choices have been made in advance. It has been suggested that you use that setting as an example of the implementation of a JIT operating system. It will also be beneficial if you indicate in your talk some instances where JIT would be less suitable in the college food services situation. What will you say?

The value chain is the sequence of business activities in which usefulness is added to the products or the services within an organization.

Distinguish between a supply chain and a value chain. How do they relate to each other?

In a just-in-time manufacturing environment, both push-through and pull-through methods trigger scheduling of production.

The JIT operating philosophy must be adopted by everyone in a company before its total benefits can be realized.

Activity-based management focuses on identifying product costs as either value-adding or nonvalue-adding activities.

Many of the reports and analyses prepared in traditional management settings need to be changed to satisfy managers' needs in the new manufacturing environment.

Activity-based management and lean operations can be used either together or separately to eliminate waste and manage activities.

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

Activity-based management includes all of the following except identifying

Listed below are the activities of Tammy's Toy Store. Identify the level at which each activity would be classified in the cost hierarchy used with ABC. Indicate each activity as unit level (UL), batch level (BL), product level (PL), or facility level (FL). _____ a. Designing a new product _____ b. Using direct materials _____ c. Setting up equipment _____ d. Maintaining a building _____ e. Assembling the product _____ _____ f. Receiving raw materials _____ g. Handling materials _____ h. Cleaning up processing area

Just-in-time operating environments encourage continuous improvement of the work environment.

Which one of the four levels of the cost hierarchy would be used by a dress manufacturer that uses activity-based management to design a pattern for a new dress style?

Which of the following is an example of a nonvalue-adding activity?