Deck 27: Lean Manufacturing and Activity Analysis

Question 1

In the lean principles philosophy, unexpected downtime is the result of unreliable processes.

Answer 1

True

Question 2

The lean manufacturing philosophy views inventory as an unnecessary waste of resources.

Answer 2

True

Question 3

Lean manufacturing favors organizing work around products rather than around processes.

Answer 3

True

Question 4

A pull manufacturing company matches its production schedules to actual customer orders.

Question 5

Lean manufacturing focuses on reducing time, cost, and poor quality in processes.

Question 6

Lean manufacturing values labor for contributions beyond labor tasks, using employee involvement that grants employees the responsibility and authority to make decisions about operations.

Question 7

Lean manufacturing is also called make to stock manufacturing.

Question 8

Pull manufacturing is also called make to order manufacturing.

Question 9

All lead times are considered to be value-added.

Question 10

The lean philosophy views inventory as a necessary buffer to protect against process problems.

Question 11

A setup is the effort spent preparing an operation or process for production.

Question 12

Lead time reduction can be a cost-saving goal for any processed item.

Question 13

Lead time is the elapsed time between starting a unit of product into the beginning of a process and its completion.

Question 14

Lead time includes both value-added time and non-value-added time.

Question 15

Reducing wait time is not linked to reducing inventory.

Question 16

Within-batch wait time increases total lead time.

Question 17

Long setups and large batch sizes result in smaller inventories and reduced lead times.

Question 18

Large batch sizes increase lead time.

Question 19

Reducing wait time is directly linked to reducing inventory.

Question 20

Lean manufacturing favors organizing work around processes rather than around products.

Question 21

In a lean environment, raw materials are delivered more frequently than in a traditional environment.

Question 22

Setups are a significant time-consuming activity in traditional production environments.

Question 23

Employee involvement does not include performing any indirect manufacturing functions.

Question 24

In a lean accounting system, there are more transactions to record than there are in a traditional accounting system.

Question 25

One inherent risk to using lean principles is that companies are at higher risk of inventory shortages during volatile times caused by strikes, adverse weather, etc., than when using traditional manufacturing principles.

Question 26

In a lean accounting system, there are fewer transactions to record than there are in a traditional accounting system.

Question 27

Push manufacturing is also referred to as "make to order" processing.

Question 28

In a lean environment, raw materials are delivered less frequently than in a traditional environment.

Question 29

Pull manufacturing companies typically produce in small batch sizes.

Question 30

In a lean accounting system, the work in process and raw materials inventory accounts are combined.

Question 31

In a lean environment, process problems are less visible than they are in a traditional environment.

Question 32

Push manufacturing (or make to stock) is a traditional approach to manufacturing.

Question 33

In a push manufacturing system, production is based on actual customer orders.

Question 34

In a push manufacturing system, production is based on estimated customer demand.

Question 35

In a pull manufacturing system, production is based on estimated customer demand.

Question 36

In a lean environment, operations only respond to customer orders.

Question 37

In a lean environment, process problems are more visible than they are in a traditional environment.

Question 38

In a pull manufacturing system, production is based on actual customer orders.

Question 39

Pull manufacturing companies produce mainly to stock inventory.

Question 40

With lean manufacturing, employees are trained to be experts in one operation.

Question 41

In a lean environment, the journal entry to record raw materials purchases would include a credit to the raw materials inventory account.

Question 42

With lean manufacturing, nonfinancial measures are used more often for long-term operating decisions than are financial accounting measures.

Question 43

When performing activity analysis on administrative processes, the "product" is often information.

Question 44

By spending more in costs of controlling quality, the costs of failing to control quality will decrease.

Question 45

A nonfinancial measure is operating information that has not been translated into dollars.

Question 46

In a lean environment, the journal entry to record conversion costs would include a debit to the manufacturing overhead control account.

Question 47

A backflush accounting system uses work in process inventories as control points between each process step.

Question 48

Lean practices and activity analyses are not suitable for adaptation to service businesses or administrative processes.

Question 49

In a lean environment, the journal entry to record raw materials purchases would include a debit to the raw and in process inventory account.

Question 50

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

Question 51

In a lean environment, the journal entry to record conversion costs would include a debit to the raw and in process inventory account.

Question 52

In a lean accounting system, the costs of direct labor are recorded in the conversion costs account.

Question 53

Which of the following is related to long lead times?

A)long setup times
B)large batch sizes
C)large inventories
D)all of these choices

Question 54

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

Question 55

In a lean accounting system, indirect labor is traced directly to product cells.

Question 56

The cell conversion cost rate is very similar to the predetermined factory overhead rate because both include only factory overhead costs.

Question 57

Which of the following is an example of value-added time?

A)processing time
B)wait time during inspection
C)wait time in inventory
D)none of these choices

Question 58

Costs of failing to control quality include prevention costs and external failure costs.

Question 59

It is easier to quantify costs of controlling quality than the costs of failing to control quality.

Question 60

With lean manufacturing, financial accounting information is used more often for long-term operating decisions and nonfinancial measures are used more often for day-to-day decisions.

Question 61

Squirrel Co. operates in a lean manufacturing environment. For June production, Squirrel purchased 6,000 units of raw materials at $6.00 per unit on account. The journal entry required to record this transaction is

Question 62

Which of the following underlying problems may be hidden by high raw materials, work in process, and finished goods inventory levels?

A)machine breakdowns
B)poor quality
C)unreliable suppliers
D)all of these choices

Question 63

Lean manufacturing philosophy reduces all of the following except

A)inventory
B)setup time
C)lead time
D)conversion costs

Question 64

How are the objectives of lean manufacturing achieved?

A)product-oriented production layout
B)employee involvement
C)supplier partnering
D)all of these choices

Question 65

Which of the following is best suited to providing timely and focused performance information?

A)nonfinancial information
B)financial accounting information
C)cost accounting information
D)variance analysis

Question 66

Traditional manufacturing emphasizes all of the following except

A)team-oriented employee involvement
B)process-oriented layout
C)push manufacturing
D)cost accumulation by department

Question 67

_____ manufacturing treats suppliers and customers as "arm's-length" independent entities.

A)Traditional
B)Lean
C)Economic
D)Productivity improvement

Question 68

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

A)fewer work in process account transactions
B)work in process and raw materials accounts combined
C)elimination of the direct labor account
D)all of these choices

Question 69

_____ manufacturing principles emphasize quality and zero defects.

A)Traditional
B)Lean
C)Zero-based
D)Chinese

Question 70

Under a lean environment, employees have the responsibility and authority to

A)purchase inventory
B)determine output amounts
C)make decisions about operations, rather than waiting for management
D)make engineering changes

Question 71

Inventory reduction is a(n) _____ principle.

A)lean
B)traditional processing
C)economic
D)wait time

Question 72

Which of the following is characteristic of a lean production layout?

A)decentralized maintenance and small production batches
B)decentralized maintenance and organization around processes
C)organization around processes and small production batches
D)large production batches and organization around processes

Question 73

Which of the following is an objective of lean manufacturing?

A)eliminating waste
B)increasing inventory levels
C)increasing lead time
D)all of these choices

Question 74

What do lean manufacturers demand from their vendors?

A)high-quality materials
B)low-cost materials
C)on-time deliveries
D)all of these choices

Question 75

Which of the following is considered non-value-added lead time?

A)packing
B)moving from process to process
C)converting raw materials to finished product
D)all of these choices

Question 76

Setup time is disregarded as an improvement priority under _____ manufacturing principles.

A)traditional
B)lean
C)total quality management
D)product cost

Question 77

Which of the following is an example of a nonfinancial measure of performance used in lean manufacturing?

A)lead time
B)setup time
C)number of units scrapped
D)all of these choices

Question 78

The lean philosophy attempts to reduce setup times, which will

A)increase batch sizes
B)not affect batch sizes
C)increase within-batch wait time
D)decrease within-batch wait time

Question 79

Actions that transform a traditional manufacturing environment to a lean environment include all of the following except

A)form partnerships with reliable suppliers
B)reorganize manufacturing around products rather than processes
C)train employees to perform various operations
D)increase raw materials and finished goods inventories

Question 80

In a lean environment, process problems are more visible than they are in a traditional environment because

A)inventories are maintained at higher levels
B)process problems cause production to shut down immediately
C)the push manufacturing system leads to increased inventory levels
D)the lack of work in process inventory creates problems