Deck 17: Lean Accounting and Productivity Measurement

Question 1

What is characteristic of lean manufacturing setup?

A)There is significant move and wait time.
B)Organization is by function into departments.
C)Products are produced in large batches.
D)Employees are empowered.

Answer 1

D

Question 2

What are the dimensions used in a two-dimensional matrix when identifying value streams?

A)activities/processes and products
B)activities/processes and costs
C)quality indicators and products
D)value indicators and costs

Answer 2

A

Question 3

What shares many of the same methodologies as lean manufacturing?

A)activity-based management
B)JIT manufacturing
C)process costing
D)responsibility management

Answer 3

B

Question 4

What is the definition of lean manufacturing?

A)an operating approach that reports on the effectiveness of the management of the organization
B)an operating approach designed to eliminate waste and maximize customer value
C)an operating approach that is designed to analyze the activities of the organization
D)an operating approach that is designed to compute variances between expectations and actual performance

Question 5

The Processing Department can produce one unit every 5 minutes and is the last department before the Finishing Department.Under traditional manufacturing where a batch equals 10 units,how long will it be before the first unit in the batch can move from the Processing Department to the Finishing Department?

A)5 minutes
B)10 minutes
C)15 minutes
D)50 minutes

Question 6

What results from the lean manufacturing benefits of better quality,reduced lead times,inventory reductions,and reduced setup times?

A)lower manufacturing costs
B)decreased production rates
C)reductions in innovative capabilities
D)increase nonfinancial measures

Question 7

What is the focus of the order fulfillment value stream?

A)developing new products for new customers
B)providing current products to current customers
C)providing current products to new customers and new products to new customers
D)the production,sale,and delivery of products

Question 8

What is reducing the time it takes to configure equipment to produce a different product an example of?

A)cellular manufacturing
B)batch processing
C)reduced setup/changeover times
D)value flow stream

Question 9

The following information relates to Markely Manufacturing:
$$\begin{array} { l l } \text { Mixing Department } & 2 \text { minutes per unit } \\\text { Moulding Department } & 4 \text { minutes per unit } \\\text { Casting Department } & 6 \text { minutes per unit } \\\text { Finishing Department } & 3 \text { minutes per unit }\end{array}$$
There is a wait time of 8 minutes before the Mixing Department begins a batch, 5 minutes between the Mixing and Moulding departments, a move and pre-wait between Moulding and Casting of 10 minutes, and a move and pre-wait between the Casting and Finishing departments of 12 minutes.

-Refer to the figure.Which area represents the bottleneck operation?

A)finishing
B)casting
C)moulding
D)mixing

Question 10

What is a difference between Toyota's lean manufacturing system and Ford's lean enterprise system?

A)Toyota incorporated employee empowerment.
B)Toyota was not structured to deal with product variety.
C)Toyota valued process over employees.
D)Toyota encouraged fewer product choices.

Question 11

The following information relates to Markely Manufacturing:
$$\begin{array} { l l } \text { Mixing Department } & 2 \text { minutes per unit } \\\text { Moulding Department } & 4 \text { minutes per unit } \\\text { Casting Department } & 6 \text { minutes per unit } \\\text { Finishing Department } & 3 \text { minutes per unit }\end{array}$$
There is a wait time of 8 minutes before the Mixing Department begins a batch, 5 minutes between the Mixing and Moulding departments, a move and pre-wait between Moulding and Casting of 10 minutes, and a move and pre-wait between the Casting and Finishing departments of 12 minutes.

-Refer to the figure.What is the production rate?

A)4 units per hour
B)10 units per hour
C)15 units per hour
D)30 units per hour

Question 12

What are the two basic types of non-value-added activities?

A)activities avoidable in the long run and activities unavoidable in the short run due to current technology or production methods
B)activities avoidable in the short run and activities unavoidable in the long run due to current technology or production methods
C)activities unavoidable in the short run due to current technology and activities avoidable due to production methods
D)activities avoidable in the short run and activities unavoidable in the short run due to current technology or production methods

Question 13

What is the focus of the new product value stream?

A)developing new products for new customers
B)providing current products to current customers
C)providing current products to new customers and new products to new customers
D)the production,sale,and delivery of products

Question 14

Which is a benefit of lean manufacturing?

A)decreased productivity
B)reduced lead times
C)reduced direct labour costs
D)increased inventory

Question 15

What is the value stream?

A)all activities required to bring a product group or service from its starting point to a finished product in the hands of the customer
B)value-added activities required to bring a product group or service from its starting point to a finished product in the hands of the customer
C)where the production stream is triggered by forecast
D)a series of steps designed to set target costs

Question 16

What term is defined as the worth of one or more features of a product for which the customer is willing to pay?

A)quality
B)innovation
C)efficiency
D)value

Question 17

Which of the following contain all the operations in close proximity that are needed to produce a family of products?

A)batch departments
B)value stream cells
C)manufacturing cells
D)plant departments

Question 18

The following information relates to Markely Manufacturing:
$$\begin{array} { l l } \text { Mixing Department } & 2 \text { minutes per unit } \\\text { Moulding Department } & 4 \text { minutes per unit } \\\text { Casting Department } & 6 \text { minutes per unit } \\\text { Finishing Department } & 3 \text { minutes per unit }\end{array}$$
There is a wait time of 8 minutes before the Mixing Department begins a batch, 5 minutes between the Mixing and Moulding departments, a move and pre-wait between Moulding and Casting of 10 minutes, and a move and pre-wait between the Casting and Finishing departments of 12 minutes.

-Refer to the figure.How long does it take to produce a batch of 20 units under a traditional manufacturing approach?

A)335 minutes
B)300 minutes
C)15 minutes
D)12 minutes

Question 19

What measurement is concerned with the relationship between inputs and outputs??

A)activity-based measurement
B)just in time measurement
C)lean measurement
D)productivity measurements

Question 20

What are the identification of a "value stream," pursuit of perfection,and making value flow without interruption examples of?

A)total quality management
B)activity-based costing
C)principles of lean thinking
D)Kanban processing

Question 21

What is characteristic of the emphasis on departmental efficiency?

A)It causes bottleneck departments to overproduce and build work-in-process inventories.
B)It causes stock outs related to demand-pull systems.
C)It causes a critical component of a lean accounting system to be minimized.
D)It causes a decrease in overall production.

Question 22

What are many overhead costs assigned to in a lean environment?

A)products using driver tracing
B)products as directly traceable costs
C)products using allocation methods
D)costs using plantwide overhead rates

Question 23

What is the purpose of the production rate?

A)to tell how many units of a product can be produced by the manufacturing cell
B)to calculate how many minutes it takes an operation to process one unit of product
C)to calculate the processing time of the slowest department
D)to calculate the wait and move time of a production

Question 24

What is the only allocation used regularly in a value stream cost assignment?

A)facilities
B)depreciation
C)maintenance
D)setup costs

Question 25

The following information relates to Markely Manufacturing:
$$\begin{array} { l l } \text { Mixing Department } & 2 \text { minutes per unit } \\\text { Moulding Department } & 4 \text { minutes per unit } \\\text { Casting Department } & 6 \text { minutes per unit } \\\text { Finishing Department } & 3 \text { minutes per unit }\end{array}$$
There is a wait time of 8 minutes before the Mixing Department begins a batch, 5 minutes between the Mixing and Moulding departments, a move and pre-wait between Moulding and Casting of 10 minutes, and a move and pre-wait between the Casting and Finishing departments of 12 minutes.

-Refer to the figure.How long would it take to process the first unit of a 20-unit batch under a cellular manufacturing setup?

A)15 minutes
B)17 minutes
C)23 minutes
D)50 minutes

Question 26

Why does lean accounting work in a lean manufacturing environment?

A)Standard costing variances encourage overproduction.
B)Distorted product costs may conceal the outcome of success of a lean system.
C)Traditional operational controls work against demand-pull systems.
D)Single-value stream allows for direct tracing of costs to product

Question 27

If a facility has costs of $100,000 per year and 20,000 square metres,and if 19,000 square metres are absorbed by the value streams,what happens to the unabsorbed cost of the remaining 1,000 metres?

A)The cost is allocated to all the value streams based on proportionate square foot usage.
B)The cost is assigned to all value streams equally.
C)The cost is absorbed by the largest value stream.
D)The cost is deducted from revenue as a separate item.

Question 28

What is the JIT solution?

A)It requires carrying materials inventory to lower the cost of inventory without production delays.
B)It requires selection of vendors based on lowest cost alone.
C)It negotiates long-term contracts with involved suppliers located closest to the production facility
D)It requires a solid forecast to push production.

Question 29

The following information relates to Ramesy Manufacturing:
To produce a unit of product
$$\begin{array} { l l } \text { Cutting Deparment } & 5 \text { mintes per unit } \\\text { Welding Department } & 8 \text { minutes per unit } \\\text { Polishing Department } & 3 \text { minutes per unit } \\\text { Finishing Department } & 4 \text { minutes per unit }\end{array}$$
There is a wait time of 5 minutes before the Cutting Department begins a batch, 15 minutes between the Cutting and Welding departments, a move and pre-wait between Welding and Polishing of 12 minutes, and a move and pre-wait between the Polishing and Finishing departments of 8 minutes.

-Refer to the figure.What is the production rate?

A)7.5 units per hour
B)12 units per hour
C)15 units per hour
D)20 units per hour

Question 30

What is the usual formula for calculating product costs for value streams with multiple products?

A)Total value stream cost of period/Units shipped for period
B)Budgeted value stream cost of period/Units shipped for period
C)Total value stream cost of period/Units sold for period
D)Budgeted value stream cost of period/Forecasted units shipped for period

Question 31

Which of the following is considered a major source of waste?

A)waiting
B)joint products
C)production of needed goods
D)zero-defects products

Question 32

Which of the following is considered a major source of waste?

A)costs spent on defect detection
B)necessary movement of goods
C)necessary transport of goods
D)design of goods and services that don't meet the needs of the customer

Question 33

Why is units shipped instead of units produced used as the denominator in the calculation of product costs for value streams with multiple products?

A)It reduces conversion costs assigned to the value stream.
B)It motivates managers to reduce inventories.
C)Units shipped are always greater than units produced.
D)Units produced encourages managers to increase inventory.

Question 34

How is overproduction of good controlled in lean manufacturing?

A)by encouraging zero setup times
B)by having management set the levels of production
C)by allowing for the maximizing customer value
D)by letting customers pull goods through the system

Question 35

Why might labour costs be reduced in a value stream system?

A)The reduction causes an elimination of the need for any specialized skilled employees such as industrial engineers or production schedulers.
B)The labour costs of industrial engineers and production schedulers can be pooled and allocated to the value streams.
C)Some of the workers can be cross-trained to perform value-added activities within the value stream.
D)Typically,implementing value stream results in layoffs of many workers.

Question 36

How is production triggered in a demand-pull system?

A)by a forecast
B)by a customer order
C)by a vendor shipment
D)by an economic reorder point

Question 37

The following information relates to Ramesy Manufacturing:
To produce a unit of product
$$\begin{array} { l l } \text { Cutting Deparment } & 5 \text { mintes per unit } \\\text { Welding Department } & 8 \text { minutes per unit } \\\text { Polishing Department } & 3 \text { minutes per unit } \\\text { Finishing Department } & 4 \text { minutes per unit }\end{array}$$
There is a wait time of 5 minutes before the Cutting Department begins a batch, 15 minutes between the Cutting and Welding departments, a move and pre-wait between Welding and Polishing of 12 minutes, and a move and pre-wait between the Polishing and Finishing departments of 8 minutes.

-Refer to the figure.If Ramesy produces in batches of 10 units,how much time would have elapsed by the time the 10th unit is produced under a manufacturing cell environment (assuming the cell is processing continuously)?

A)60 minutes
B)65 minutes
C)150 minutes
D)125 minutes

Question 38

Which of the following is characteristic of a lean accounting system?

A)The cost of people with specialized skills,such as industrial engineers,is allocated to all manufacturing cells based on an activity driver.
B)Workers are multiskilled and responsible for setting up equipment,maintaining equipment,and operating equipment.
C)Implementing a value stream system will require more workers.
D)Workers are highly skilled in one specialized area or activity and are not expected to spend time on other value-added activities.

Question 39

Which of the following is an advantage of a value stream cost assignment?

A)Initially,it may not be possible to allocate all the people needed in a value stream to that stream exclusively.
B)There will always be some individuals whose related costs will remain outside any particular value stream.
C)A value stream is usually organized around a family of products.
D)Having a value stream for each product is not practical.

Question 40

The following information relates to Ramesy Manufacturing:
To produce a unit of product
$$\begin{array} { l l } \text { Cutting Deparment } & 5 \text { mintes per unit } \\\text { Welding Department } & 8 \text { minutes per unit } \\\text { Polishing Department } & 3 \text { minutes per unit } \\\text { Finishing Department } & 4 \text { minutes per unit }\end{array}$$
There is a wait time of 5 minutes before the Cutting Department begins a batch, 15 minutes between the Cutting and Welding departments, a move and pre-wait between Welding and Polishing of 12 minutes, and a move and pre-wait between the Polishing and Finishing departments of 8 minutes.

-Refer to the figure.What is the cycle time of operation?

A)16 minutes
B)20 minutes
C)35 minutes
D)60 minutes

Question 41

Refer to the figure.Under the features and characteristics costing method,which product would have more overhead costs allocated?

A)Product A,because it has the highest total cycle time
B)Product B,because it has the highest individual cycle time in Moulding
C)Product A,because the first two cycles are bottlenecks
D)Product B,because the last two cycles are bottlenecks

Question 42

-Refer to the figure.If the materials costs for both products are $75 per unit produced,and conversion costs are $120 per hour,what is the per-unit cost of Product A under the features and approach costing method?

A)$81.75
B)$87
C)$91
D)$195

Question 43

Which of the following is an example of an financial performance measure on a box scorecard?

A)dock-to-dock days
B)on-time delivery
C)first time through
D)weekly sales

Question 44

How are conversion costs normally assigned under features and characteristics costing?

A)using a predetermined overhead rate
B)using a labour rate
C)based on proportion of production
D)using a conversion ratio that considers different features

Question 45

What does the features and characteristics approach do?

A)It focuses only on total quality and zero defects.
B)It recognizes that the cost of a product is determined by the rate of flow of the product through the value stream.
C)It recognizes that the cost of a product is determined by the amount of labour time required to make the product.
D)It recognizes that the cost of a product is determined by the amount of machine hours required to make the product.

Question 46

-Refer to the figure.What is the product cost based on total average conversion cost? (Round to nearest cent.)

A)$36.04
B)$45.86
C)$49.14
D)$95.00

Question 47

What approach is normally used to calculate product costs when products in a value stream are heterogeneous?

A)variable costing
B)features and characteristics costing
C)absorption costing
D)functional costing

Question 48

What is a box scorecard?

A)It compares operational,capacity,and financial metrics with a future desired state.
B)It compares physical,capacity,and financial metrics with a future desired state.
C)It compares operational,capacity,and external financial metrics with a future desired state.
D)It compares operational,capacity,and financial metrics with a past state.

Question 49

-Refer to the figure.What is the product cost based on total average cost? (Round to nearest cent.)

A)$47.50
B)$48.46
C)$49.14
D)$95.00

Question 50

What two types of efficiencies are achieved at the point of total productive efficiency?

A)cost and profit efficiency
B)technical and allocative efficiency
C)sales and profit efficiency
D)maintenance and profit efficiency

Question 51

Which of the following statements is NOT a characteristic of the box scorecard?

A)Operational,nonfinancial measures are used only at the department level.
B)There is a comparison of operational,capacity,and financial metrics.
C)The lean control approach uses a mixture of financial and nonfinancial measures for the value stream.
D)A weekly product cost is reported in the box scorecard.

Question 52

What does the lean control system use to compare operational,capacity,and financial metrics with prior-week performances and with a future desired state?

A)a Balanced Scorecard
B)a box scorecard
C)a profit analysis worksheet
D)a performance improvement plan

Question 53

How does the income statement reflect the profit/loss in value-stream reporting?

A)by individual product line
B)by activity
C)by value stream
D)by customer

Question 54

Using average product cost for a value stream means that individual product costs are not known.Why is this adequate?

A)Waste cannot be eliminated at the activity and process level.
B)A fully accurate product cost is not needed for many decisions.
C)Budget costing variances may actually impede improvement decisions.
D)Detailed variances by department are not needed to eliminate waste.

Question 55

In calculating product costs for a value stream with multiple products,when would average product costs be a good estimate of individual product costs?

A)when the products are similar and consume resources in approximately the same proportion
B)when the product mix is relatively unstable
C)when the products are very different in size,style,and production
D)when the products consume labour at different rates

Question 56

What would cause unit cost to increase with multiple products in a value stream?

A)if more units are shipped than produced
B)if more units are produced than shipped
C)if average conversion cost is used instead of total average cost
D)if the average number of products produced decreases

Question 57

Refer to the figure.Under traditional costing methods,which product would have more overhead costs allocated?

A)Product A,because it has the highest total cycle time
B)Product B,because it has the highest individual cycle time in Moulding
C)Product A,because the first two cycles are bottlenecks
D)Product B,because the last two cycles are bottlenecks

Question 58

-Refer to the figure.If the materials costs for both products are $75 per unit produced,and conversion costs are $120 per hour,what is the per-unit cost of Product B under the features and approach costing method?

A)$81.75
B)$87
C)$91
D)$195

Question 59

What is the term for the point at which,for any mix of inputs that will produce a given output,no more of any one input is used than is absolutely necessary?

A)input trade-off efficiency
B)productivity
C)total productive efficiency
D)technical efficiency

Question 60

How can capacity be labelled on a box scorecard?

A)as productive,nonproductive,and excess
B)as available,excess,and budgeted
C)as productive,nonproductive,and available
D)as valued,excess,and wasted

Question 61

What does a financial productivity measure use to measure input and output?

A)revenues
B)costs
C)dollars
D)physical quantities

Question 62

How do we calculate the productivity ratio used as a partial operational productivity measure?

A)output/input
B)input/output
C)input/costs
D)costs/input

Question 63

Information about Hinze Corporation is as follows:
$$\begin{array} { l r r } &20 \times 1&20 \times 2\\\text { Output (urits) } & 40,000 & 42,000 \\\text { Selling price per unit } & \$ 25 & \$ 25 \\\text { Input quantites: } & & \\\text { Materials (kg) } & 2,000 & 2,000 \\\text { Labour (hours) } & 1,600 & 1,625 \\\text { Input prices: } & & \\\text { Materials (per kg) } & \$ 5.00 & \$ 5.50 \\\text { Labour (per hour) } & 500 & \$ 7.50\end{array}$$

-Refer to the figure.What is the labour productivity ratio for 20X1?

A)25.00
B)24.80
C)24.00
D)22.84

Question 64

Information about Hinze Corporation is as follows:
$$\begin{array} { l r r } &20 \times 1&20 \times 2\\\text { Output (urits) } & 40,000 & 42,000 \\\text { Selling price per unit } & \$ 25 & \$ 25 \\\text { Input quantites: } & & \\\text { Materials (kg) } & 2,000 & 2,000 \\\text { Labour (hours) } & 1,600 & 1,625 \\\text { Input prices: } & & \\\text { Materials (per kg) } & \$ 5.00 & \$ 5.50 \\\text { Labour (per hour) } & 500 & \$ 7.50\end{array}$$

-Refer to the figure.By how much did profits change as a result of changes in productivity related to labour?

A)$550.00 decrease
B)$550.00 increase
C)$412.50 decrease
D)$412.50 increase

Question 65

What is the productivity measure that is expressed in physical terms?

A)financial productivity measure
B)operational productivity measure
C)partial productivity measurement
D)productivity measurement

Question 66

What is partial productivity measurement?

A)is measures used in isolation.
B)is measuring productivity for one input at a time.
C)is measuring the trade-off effects among input productivity may be missed.
D)Is measuring the decline in the productivity of an input.

Question 67

What is an advantage of using partial productivity measures?

A)Partial productivity measures keep managers aware of trade-offs in inputs.
B)Partial productivity measures keep top management involved because they are difficult for operating personnel to understand.
C)Partial productivity measures are easily interpreted.
D)Partial productivity measures provide a system-wide focus.

Question 68

What is the definition of allocative efficiency?

A)all non-value activities performed with minimal quantities needed to produce the given outputs
B)elimination of all non-value-added activities
C)input prices determining the relative proportions of each input that should be used
D)input prices determining the relative proportions of each output that should be produced

Question 69

What is the term for a prior period used to set the benchmark for measuring productivity changes?

A)base period
B)financial productivity period
C)operational productivity period
D)target period

Question 70

What is the quantitative assessment of productivity changes?

A)financial productivity measure
B)operational productivity measure
C)technical efficiency
D)productivity measurement

Question 71

Information about Hinze Corporation is as follows:
$$\begin{array} { l r r } &20 \times 1&20 \times 2\\\text { Output (urits) } & 40,000 & 42,000 \\\text { Selling price per unit } & \$ 25 & \$ 25 \\\text { Input quantites: } & & \\\text { Materials (kg) } & 2,000 & 2,000 \\\text { Labour (hours) } & 1,600 & 1,625 \\\text { Input prices: } & & \\\text { Materials (per kg) } & \$ 5.00 & \$ 5.50 \\\text { Labour (per hour) } & 500 & \$ 7.50\end{array}$$

-Refer to the figure.What is the materials productivity ratio for 20X1?

A)28
B)25
C)20
D)16

Question 72

What does an operational productivity measure use to measure input and output?

A)revenues
B)costs
C)dollars
D)physical quantities

Question 73

What is productivity concerned with producing?

A)rapid output
B)efficient output
C)the maximum quantity of output possible
D)effective output

Question 74

What is the productivity measure in which inputs and outputs are expressed in dollars?

A)financial productivity measure
B)operational productivity measure
C)partial productivity measurement
D)productivity measurement

Question 75

What is the term for the process of producing output efficiently,using the least quantity of inputs possible?

A)productivity measurement
B)productivity
C)profile measurement
D)partial productivity measure

Question 76

What is a ratio that measures productive efficiency for one input?

A)financial productivity measure
B)operational productivity measure
C)partial productivity measurement
D)productivity measurement

Question 77

What is the term for the point at which technical and allocative efficiency are achieved?

A)input trade-off efficiency
B)productivity
C)total productive efficiency
D)financial productivity efficiency

Question 78

Information about Hinze Corporation is as follows:
$$\begin{array} { l r r } &20 \times 1&20 \times 2\\\text { Output (urits) } & 40,000 & 42,000 \\\text { Selling price per unit } & \$ 25 & \$ 25 \\\text { Input quantites: } & & \\\text { Materials (kg) } & 2,000 & 2,000 \\\text { Labour (hours) } & 1,600 & 1,625 \\\text { Input prices: } & & \\\text { Materials (per kg) } & \$ 5.00 & \$ 5.50 \\\text { Labour (per hour) } & 500 & \$ 7.50\end{array}$$

-Refer to the figure.By how much did profits change as a result of changes in productivity related to materials?

A)$550.00 decrease
B)$550.00 increase
C)$312.50 decrease
D)$312.50 increase

Question 79

Which of the following conditions is NOT an example of technical efficiencies?

A)more output; fewer inputs
B)same output; fewer inputs
C)more output; same inputs
D)less output; less inputs

Question 80

Information about Blair Company is as follows:
$\begin{array}{lcr}&20 \times 1 & 20 \times 2\\\text { Output (units) } & 12,000 & 13,000 \\\text { Input quantities: } &\\\text { Materials (kg) } & 3,750 & 4,000 \\\text { Input prices: } &\\\text { Materials (per kg) }& \$ 2 & \$ 3\end{array}$

-Refer to the figure.What is the partial operational productivity measure for materials for 20X1?

A)0.3125
B)0.6250
C)3.2000
D)3.2500