Deck 15: Lean Accounting and Productivity Measurement

Question 1

Which is NOT a benefit of lean manufacturing?

A) increased productivity
B) reduced lead times
C) reduced direct labor costs
D) reductions in inventory

Answer 1

C

Question 2

Reducing the time it takes to configure equipment to produce a different product is an example of

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

Answer 2

C

Question 3

Figure 15-1 The following information relates to Markely Manufacturing:
To produce a unit of product:
There is a wait time of 8 minutes before the mixing department begins a batch, 5 minutes between the mixing and molding departments, a move and pre-wait between molding and casting of 10 minutes, and a move and pre-wait between the casting and finishing departments of 12 minutes.

-
Refer to Figure 15-1.What is the production rate?

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

Answer 3

10 units per hour

Question 4

Figure 15-1 The following information relates to Markely Manufacturing:
To produce a unit of product:
There is a wait time of 8 minutes before the mixing department begins a batch, 5 minutes between the mixing and molding departments, a move and pre-wait between molding and casting of 10 minutes, and a move and pre-wait between the casting and finishing departments of 12 minutes.

-
Refer to Figure 15-1.Which area represents the bottleneck operation?

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

Question 5

Lean manufacturing benefits of better quality, reduced lead times, inventory reductions, and reduced setup times result in

A) lower manufacturing costs.
B) increased production rates.
C) reductions in innovative capabilities.
D) both a and b.

Question 6

The order fulfillment value stream focuses on

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 7

Lean manufacturing shares many of the same methodologies as

A) activity-based management.
B) JIT manufacturing.
C) process costing.
D) none of these.

Question 8

Figure 15-1 The following information relates to Markely Manufacturing:
To produce a unit of product:
There is a wait time of 8 minutes before the mixing department begins a batch, 5 minutes between the mixing and molding departments, a move and pre-wait between molding and casting of 10 minutes, and a move and pre-wait between the casting and finishing departments of 12 minutes.

-
Refer to Figure 15-1.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) none of these

Question 9

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) 50 minutes
C) 10 minutes
D) not enough information is given

Question 10

There are two basic types of non-value added activities.They are

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 11

_______________ 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 12

Identification of a "value stream," pursuit of perfection, and making value flow without interruption are examples of

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

Question 13

Lean manufacturing is best defined as

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 14

_______________ 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 15

The new product value stream focuses on

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 16

A difference between Toyota's lean manufacturing system and Ford's lean enterprise system is

A) Toyota incorporated employee empowerment, team structure, cellular manufacturing, small batches, and reduced setup times as integral pieces of their system.
B) Toyota was not structured to deal with product variety.
C) Toyota valued process over employees.
D) Low volume products were not compatible with either system.

Question 17

Which of the following is NOT a characteristic of a lean manufacturing system?

A) delivery of the right product in the right quantity
B) zero defect
C) delivery of product the exact time a customer needs it
D) all of these

Question 18

In a traditional 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) all of these.

Question 19

One way to identify value streams is to use a two-dimensional matrix where _______________ are listed on one dimension and _______________ on a second dimension

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

Question 20

The value stream

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

Question 21

In a demand-pull system

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

Question 22

Figure 15-2 The following information relates to Ramesy Manufacturing:
To produce a unit of product:
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 Figure 16-2.What is the production rate?

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

Question 23

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

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

Question 24

Which of the following is true in regards to a lean accounting system?

A) The cost of people with specialized skills, such as industrial engineers, are 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 25

The production rate

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

Question 26

In a lean environment, many overhead costs are assigned to

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

Question 27

Figure 15-1 The following information relates to Markely Manufacturing:
To produce a unit of product:
There is a wait time of 8 minutes before the mixing department begins a batch, 5 minutes between the mixing and molding departments, a move and pre-wait between molding and casting of 10 minutes, and a move and pre-wait between the casting and finishing departments of 12 minutes.

-
Refer to Figure 15-1.How long would it take to process the first unit of a 20-unit batch under a cellular manufacturing setup?

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

Question 28

The pursuit of perfection is realized in

A) zero setup times.
B) producing on demand.
C) maximizing customer value.
D) all of these.

Question 29

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 30

Which of the following is NOT considered a major source of waste?

A) waiting
B) joint products
C) overproduction of goods not needed
D) defective products

Question 31

The JIT solution

A) requires carrying materials inventory in order to lower the cost of inventory without production delays.
B) requires selection of vendors based on lowest cost alone.
C) exploits supplier linkages by negotiating long-term contracts with a few chosen suppliers located closest to the production facility and establishing more supplier involvement.
D) requires a solid forecast to push production.

Question 32

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

A) The elimination of the need for any specialized skilled employees such as industrial engineers or production schedulers.
B) The labor 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) None of these.

Question 33

Figure 15-2 The following information relates to Ramesy Manufacturing:
To produce a unit of product:
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 Figure 15-2.What is the cycle time of operation?

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

Question 34

Which of the following is NOT considered a major source of waste?

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

Question 35

Which of the following is NOT a limitation 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 of 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 36

In the calculation of product costs for value streams with multiple products, units shipped instead of units produced is used as the denominator because

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 shipped is not used.

Question 37

Figure 15-2 The following information relates to Ramesy Manufacturing:
To produce a unit of product:
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 Figure 15-2.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) 65 minutes
B) 60 minutes
C) 150 minutes
D) some other amount

Question 38

Which of the following is a reason traditional costing approaches may NOT 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) All of these.

Question 39

Emphasis on departmental efficiency

A) causes bottleneck departments to over-produce and build work-in-process inventories.
B) causes stock outs related to demand-pull systems.
C) is a critical component of a lean accounting system.
D) none of these.

Question 40

The only allocation used regularly in a value stream cost assignment is

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

Question 41

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 42

Figure 15 - 3 Based on the following information:


- Refer to Figure 15-3.What is the product cost based on total average conversion cost? (Round to nearest cent.)

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

Question 43

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

A) dock-to-dock days
B) on-time delivery
C) first time through
D) all of these

Question 44

With multiple products in a value stream, unit cost will increase if

A) more units are shipped than produced.
B) more units are produced than shipped.
C) average conversion cost is used instead of total average cost.
D) none of these.

Question 45

Figure 15 - 3 Based on the following information:


-Refer to Figure 15-3.What is the product cost based on total average cost? (Round to nearest cent.)

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

Question 46

Which of the following statements is true about the box scorecard?

A) Operational, non-financial measures are used at the cell level.
B) There is a comparison between prior week metrics, current week metrics, and desired future state metrics.
C) The expectation to achieve desired future state provides motivation towards constant performance improvement.
D) All of these.

Question 47

Productivity is concerned with producing

A) output rapidly.
B) output efficiently.
C) the maximum quantity of output possible.
D) output effectively.

Question 48

Figure 15-4

-Refer to Figure 15-4.If the materials costs for both products are $75 per unit produced, and conversion costs are $120 per hour, what is the unit cost of Product A under the features and approach costing method?

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

Question 49

Under features and characteristics costing, conversion costs are normally assigned

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

Question 50

The lean control system uses a _______________ that compares operational, capacity, and financial metrics with prior week performances and with a future desired state.

A) balanced scorecard
B) box scorecard
C) profit analysis worksheet
D) performance improvement plan

Question 51

Figure 15-4

- Refer to Figure 15-4.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 molding
C) Product A because the first two cycles are bottlenecks
D) Unable to determine from information given

Question 52

Using average product cost for a value stream means that individual product costs are not known.This is adequate mainly because

A) waste can be eliminated at the activity and process level without knowing product costs.
B) a fully accurate product cost is not needed for many decisions.
C) standard costing variances may actually impede improvement decisions.
D) all of these.

Question 53

In calculating product costs for a value stream with multiple products, average product costs are a good estimate of individual product costs if

A) the products are similar and consume resources in approximately the same proportion.
B) the product mix is relatively stable.
C) the products are homogenous.
D) all of these.

Question 54

Figure 15-4

- Refer to Figure 15-4.If the materials costs for both products are $75 per unit produced, and conversion costs are $120 per hour, what is the unit cost of Product B under the features and approach costing method?

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

Question 55

_______________ is 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 56

In value-stream reporting, the income statement reflects the profit/loss by

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

Question 57

Figure 15-4

-Refer to Figure 15-4.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 molding, the bottleneck department
C) Product A because the first two cycles are bottlenecks
D) Unable to determine from information given

Question 58

On a box scorecard, capacity can be labeled as

A) productive, non-productive, and excess.
B) available, excess, and budgeted.
C) productive, non-productive, and available.
D) valued, excess, and wasted.

Question 59

Which of the following statements is NOT true about the box scorecard?

A) Operational, non-financial measures are only used 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 non-financial measures for the value stream.
D) A weekly product cost is reported in the box scorecard.

Question 60

The features and characteristics approach

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

Question 61

Allocative efficiency can be defined as

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 62

The productivity ratio used as a partial operational productivity measure is calculated as follows

A) Output/Input.
B) Input/Output.
C) Input/Costs.
D) Input/Sales.

Question 63

_______________ is(are) the process of producing output efficiently, using the least quantity of inputs possible.

A) Productivity measurement
B) Productivity
C) Profile measurement
D) Partial productivity measures

Question 64

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 65

Information about Hinze Corporation is as follows:

- What is the labor productivity ratio for 2011?

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

Question 66

_______________ is the quantitative assessment of productivity changes.

A) Financial productivity measure
B) Operational productivity measure
C) Technical efficiency
D) Productivity measurement

Question 67

_______________ is(are) productivity measure(s) in which inputs and outputs are expressed in dollars.

A) Financial productivity measures
B) Operational productivity measures
C) Partial productivity measurement
D) Productivity measurement

Question 68

_______________ is(are) productivity measure(s) that are expressed in physical terms.

A) Financial productivity measures
B) Operational productivity measures
C) Partial productivity measurement
D) Productivity measurement

Question 69

Information about Blair Company is as follows:

- What is the partial operational productivity measure for materials for 2011?

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

Question 70

Information about Blair Company is as follows:

- What is the partial operational productivity measure for materials for 2012?

A) 3.2000
B) 3.2500
C) 0.3077
D) 0.3125

Question 71

A financial productivity measure uses _______________ to measure input and output.

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

Question 72

_______________ 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 73

Which of the following is NOT a disadvantage of partial productivity measures?

A) partial measures used in isolation
B) the ability to focus on a particular input
C) trade-offs effects among input productivity may be missed
D) a decline in the productivity of an input may lead to an overall cost decline

Question 74

Information about Blum Company is as follows:

-What is the partial operational productivity measure for labor for 2011?

A) 2.4
B) 2.5
C) 0.4
D) 2.8

Question 75

_______________ is(are) a prior period used to set the benchmark for measuring productivity changes.

A) Base period
B) Financial productivity measures
C) Operational productivity measures
D) Target period

Question 76

Information about Hinze Corporation is as follows:

- What is the materials productivity ratio for 2011?

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

Question 77

An operational productivity measure uses _______________ to measure input and output.

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

Question 78

Total productive efficiency is the point at which _______________ and _______________ are achieved.

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

Question 79

_______________ is 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 80

Which of the following 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 it is difficult for operating personnel to understand.
C) Partial productivity measures are easily interpreted.
D) Partial productivity measures provide a system wide focus.