Exam 4: Value-Based Systems- Abm and Lean

In a traditional operating environment, a company usually

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. Desiguring a new product \_\_\_\_ e. Assembling the product \_\_\_\_ b. U sing direct materials \_\_\_\_ f. Receiving raw materials \_\_\_\_ c. Setting up equipment \_\_\_\_ g. H andling materials \_\_\_\_ d. Maintaining a building \_\_\_\_ h. Cleaning up processsing area

Engineering design is an activity vital to the success of any motor vehicle manufacturer. Identify the level at which engineering design would be classified in the cost hierarchy used with ABC for a maker of built-to-order city and county emergency vehicles (orders are usually placed for 10 to 12 identical vehicles).

A bill of activities may be used to calculate the product unit costs only for manufacturing concerns but not for service units.

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 schechling Production-assembly Materials purchasing Production area cleamup Production-machine setup Human resources services Building maintenance Product rework New product design Depreciation of buiding 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.

In a just-in-time environment, costs associated with product movement and storage typically decrease, whereas costs of inspection and queue time typically increase.

Which of the following statements is true?

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

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

When using backflush costing, product costs are first accumulated in the __________ account.

Customer relations are usually part of

Full product cost includes

How does pull-through production help minimize inventories in a just-in-time operating environment?

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

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).

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

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

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

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?

The major objective of the just-in-time operating environment is to