Exam 12: Cost Management for Just-In-Time Environments

Sifton 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 just-in-time cell for each customer. The following information relates only to one customer's just-in-time cell for the coming year. Projected labor and overhead, $7,370,000; materials costs, $28 per unit. Planned production included 4,000 hours to produce 27,500 motor drives. Actual production for August was 1,600 units, and motor drives shipped amounted to 1,380 units. From the foregoing information, determine the budgeted cell conversion cost per unit.

Costs of controlling quality include prevention costs and internal failure costs.

Prevention costs and appraisal costs are considered costs of controlling quality.

Which of the following is a value-added activity?

The Kwanika Co. operates in a just-in-time (JIT) manufacturing environment. During 2011, 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:

Long setups and large batch sizes result in smaller inventories.

In a just-in-time (JIT) environment, operations only respond to customer orders.

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

Extreme Wreaths, Inc. makes wreaths in batch sizes of 15 at a time. The cutting & assembly process takes 10 minutes per wreath, and the decorating process time is 7 minutes per wreath. It takes 5 minutes to move the wreaths from the cutting & assembly process to the decorating process. In a effort to improve the lead time, the company has tried reducing the batch size to 10 units. The new process is as follows: cutting & assembly process - 8 minutes. The decorating process is still 7 minutes per wreath. It takes 5 minutes to move the wreaths from the cutting & assembly process to the decorating process.

Non-financial accounting information is used more often for long-term operating decisions than is financial information.

Maximum effectiveness and efficiency are reached when the just-in-time (JIT) philosophy is used by both manufacturers and their suppliers.

In a just-in-time (JIT) system, there are fewer transactions to record than there are in a traditional system.

Which of the following is an example of a non-financial measure?

In a just-in-time (JIT) environment, the journal entry to record conversion costs would include a debit to the raw and in process inventory account.

Connally Company's payroll department required that every time card be checked twice to ensure pay accuracy. The company has 1,000 employees and has determined that the checks cost the company $8,000 per year. They have decided to change this policy and only check those names which appear on the exceptions report and a random check on the entire payroll. Currently only 15% of the payroll is evaluated each payroll. Determine the inspection activity cost per employee on the 1,000 employees both before and after the improvement.

Rabbitt Co. operates in a just-in-time manufacturing environment. For June production, Rabbitt purchased 5,000 units of raw materials at $6.00 per unit on account. The journal entry required to record this transaction is:

Just-in-Time (JIT) manufacturing focuses on reducing time, cost, and poor quality in processes.

A college would like to increase enrollment by streamlining the enrollment process. Which of the following would not fall in line with the college goal?

Which of the following results in fewer transactions in just-in-time accounting?

A process-oriented layout segments production facilities into functional departments.