Chapter D, Problem 2QS

Identify the following as applying more to lean (L) or to traditional (T) businesses. Quality control is only at product completion.

Which of the following is NOT a principle of lean manufacturing? a. Products are pushed from the production end to the customer. b. All activities that do not add value and maximize the use of scarce resources must be eliminated. c. Achieve high inventory turnover rate. d. A lean manufacturing firm must have established and cooperative relationships with vendors. e. All of the above are lean manufacturing principles.

The purpose of internal control is to have proper control over business. Proper control means, the business will be able to _____________ Achieve maximum efficiency Produce more goods in more time Compromise on quality Compromise on quantity

Identify which of the statements below are true (T) or false (F). Lean businesses aim to: Reduce inspection time.

Under EOQ approaches, order costs can be minimised by placing large, infrequent orders for inventory. However, under JIT, inventory- related costs are reduced by ordering frequently and in small quantities. Can you explain why both of these statements are correct? Explain why some organisations onsider it important to measure customer retention and customer satisfaction.

1. There is a significant decrease in unit sales. Which of the following would be the LEAST likely action among the different departments?   a. Consult with marketing and sales to determine whether there are changes in customer preferences. b. Review changes in technology and determine whether there is obsolescense in the products and the production process c. Inquire with the after-sales service whether there are indications of high level of unresolved customer complaints. d. Communicate with inbound logistics and determine whether raw materials contributed to increase in product failure.   2. The internal cost analysis process involves the following in what order? (A) Identify the links between the process and check for opportunities to lower costs, (B) Identify the value creating processes and the cost of each, (C) Identify the cost driver for each process and the cost per activity level.   a. A, B, Cb. C, A, Bc. B, A, Cd. B, C, A   3. This stage of…

Which one of the following is a disadvantage of Mass Production system? a. Higher level of inventory at all levels and hence higher inventory cost. b. Larger space requirements. c. Breakdown of one machine will stop an entire production line. d. Higher cost due to frequent set up changes.

Which of the following is NOT a problem associated with standard cost accounting? a. Standard costing motivates management to produce large batches of products and build inventory. b. Applying standard costing leads to product cost distortions in a lean environment. c. Standard costing data are associated with excessive time lags that reduce its usefulness. d. The financial orientation of standard costing may promote bad decisions. e. All of the above are problems with standard costing.

What of the following is NOT a Benefit of Activity Based Management? a.It assists in the budgeting process.  b.It  aids  management  in  cost  cutting  and/or  cost  control  and  inferentially  in  product  profitability. c.It causes managers to identify non-value added activities and therefore encourages thinking of means of reducing such activities. d.Is more complex than traditional accounting system because it uses multiple cost application rates, one for each activity or cost pool.