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Exam 12: Lean Manufacturing and Activity Analysis

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Question 61

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

A) True
B) False

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Question 62

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

A) True
B) False

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Question 63

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

Which of the following are features of the lean manufacturing system?

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

Long setups and large batch sizes result in smaller inventories.

In a pull manufacturing system, raw materials are released to production based on actual customer orders.

In a push manufacturing system, raw materials are released to production based on actual customer orders.

How are the objectives of lean manufacturing achieved?

In a lean system, direct labor is included in conversion costs.

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

Extreme Wreaths, Inc.  makes wreaths in batch sizes of 15 at a time. The cutting & assembly process takes 10 minutes per wreath, and the decorating process time is 7 minutes per wreath. It takes 5 minutes to move the wreaths from the cutting & assembly process to the decorating process. In a effort to improve the lead time, the company has tried reducing the batch size to 10 units. The new process is as follows: cutting & assembly process - 8 minutes. The decorating process is still 7 minutes per wreath. It takes 5 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 for both the old and the new manufacturing process. (b) Compute the value-added ratio for both the old and new process.  Round to the nearest decimal.

Which of the following is characteristic of the lean system?

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

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 lean cell for each customer. The following information relates only to one customer's lean 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.

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

From the above schedule, calculate the internal failure costs.

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

Lean manufacturing philosophy reduces all of the following except

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 lean cell for each customer. The following information relates only to one customer's lean 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 Cost of Goods Sold during August.