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

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Question 51

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

A) True
B) False

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Question 52

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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 manufacturing cost per unit.

A) $240.00
B) $268.00
C) $296.00
D) $1,870.50

E) None of the above
F) A) and B)

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Question 53

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

Within-batch wait time increases total lead time.

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

In a just-in-time (JIT) environment, the journal entry to record conversion costs would include a debit to the raw and in process inventory account.

Reducing wait time is directly linked to reducing inventory.

Cariboo Pattern Company makes dressmakers' patterns using a machine that stamps the pattern outline onto tissue paper. The stamping center produced 40,000 patterns in August, with a machine time per pattern of 20 seconds. Annual budgeted cell conversion costs were as follows: Cariboo planned 2,500 total machine hours for the year. Calculate Cariboo's budgeted cell conversion cost rate for the year.

A process-oriented layout segments production facilities into functional departments.

Logan 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 year planned labor and overhead was $76,800,000; materials costs, $25 per unit. Planned production included 9,600 hours to produce 76,800 motor drives. Actual production for the month of August was 5,200 units, and motor drives shipped amounted to 5,040 units. From the foregoing information, determine the budgeted cell conversion cost per hour.

Examples of transforming a traditional manufacturing environment to a just-in-time environment is to do all of the following except

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

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

Just-in-time manufacturing philosophy reduces all of the following except

Axelgold Company produces parts for the auto industry. Part X2 is machined in Department #1, which has the following budgeted conversion costs: All costs are driven by machine hours. Total possible hours for the year are 2,800. It takes .03 hours to machine one unit of Part X2.

Schedule of Activity Costs From the above schedule of activity costs, determine the prevention costs.

Schedule of Activity Costs From the above schedule, compute the percentage of non-value-added activities.

Inventory reduction is a ____ principle.

Connally Company's payroll department required that every time card be checked twice to ensure pay accuracy. The company has 1,000 employees and has determined that the checks cost the company $8,000 per year. They have decided to change this policy and only check those names which appear on the exceptions report and a random check on the entire payroll. Currently only 15% of the payroll is evaluated each payroll. Determine the inspection activity cost per employee on the 1,000 employees both before and after the improvement.

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