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Exam 27: Cost Management for Just-In-Time Environments

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Question 1

True/False

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Push manufacturing (made-to-stock) is a traditional approach to manufacturing.

A) True
B) False

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Question 2

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Which of the following is not an external failure cost?

A) warranty work
B) processing returned merchandise
C) rework
D) correcting invoice errors

E) All of the above
F) B) and C)

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Question 3

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In a just-in-time (JIT) system, indirect labor is traced directly to product cells.

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:

Which of the following results in long lead time?

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

Financial accounting information is used more often for long-term operating decisions and non-financial information is used more often for day-to-day decisions.

How are the objectives of just-in-time (JIT) manufacturing achieved?

The just-in-time (JIT) philosophy attempts to reduce setup times, which will:

The Thudaka Company has budgeted its conversion cost for the small lamp production as $65,000 for 1,300 production hours. Each unit produced by the cell requires 15 minutes of process time. During the month, 3,800 units are manufactured in the cell. the estimated material cost is $18 per unit. Provide the following journal entries. (a) Materials are purchased to produce 4,000 units. (b) Conversion costs are applied to 3,800 units of production. (c) 3,650 units are placed into finished goods.

Schedule of Activity Costs From the above schedule, calculate the external failure costs.

Traditional manufacturing emphasizes all of the following except

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

Schedule of Activity Costs From the above schedule, calculate the internal failure costs.

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 production costs transferred to Finished Goods during August.

Under the just-in-time production concept, employees are better utilized if they are experts in one operation rather than wasting time training them to learn various production operations.

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

Which of the following are features of the just-in-time manufacturing system? (a) maintaining excess inventory to ensure that products will always be available (b) cross training of employees (c) giving employees additional authority and responsibility (d) product oriented layout (e) increased set-up time

Christmas Express makes wreaths in batch sizes of 12. The cutting & assembly process takes 7 minutes per wreath and the decorating process time is 10 minutes per wreath. It takes 12 minutes to move the wreaths from the cutting & assembly process to the decorating process. (a) Compute the value-added, non-value-added, and the total lead time of the wreath process. (b) Compute the value-added ratio. Round to the nearest decimal.

In a just-in-time (JIT) environment, raw materials are delivered more frequently than in a traditional environment.