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

Question 1

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

Answer 1

True

Question 2

Just-in-Time (JIT) manufacturing favors organizing work around products rather than around processes.

Answer 2

True

Question 3

The just-in-time (JIT) philosophy views inventory as a necessary buffer to protect against process problems.

Answer 3

False

Question 4

Long setups and large batch sizes result in smaller inventories.

Question 5

Reducing wait time is directly linked to reducing inventory.

Question 6

The just-in-time (JIT) philosophy views inventory as an unnecessary waste of resources.

Question 7

Large batch sizes increase lead time.

Question 8

Reducing wait time is not linked to reducing inventory.

Question 9

Lead time is the process time between start and completion.

Question 10

Just-in-Time (JIT) manufacturing is also called make-to-order manufacturing.

Question 11

A make-to-order company matches its production schedules to actual customer orders.

Question 12

Just-in-Time (JIT) manufacturing is also called make-to-stock manufacturing.

Question 13

A setup is the time required to prepare an operation for a new production run.

Question 14

Employee involvement in a product-oriented factory emphasizes employee teams, rather than individual employees.

Question 15

All lead time are considered as value-added lead time.

Question 16

Just-in-Time (JIT) manufacturing focuses on reducing time, cost, and poor quality in processes.

Question 17

In the just-in-time (JIT) philosophy, unexpected downtime is the result of unreliable processes.

Question 18

Within-batch wait time increases total lead time.

Question 19

Just-in-Time (JIT) manufacturing favors organizing work around processes rather than around products.

Question 20

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

Question 21

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

Question 22

Employee involvement does not include performing any indirect manufacturing functions.

Question 23

In a push manufacturing system, raw materials are released to production based on forecasted demand.

Question 24

Make-to-order companies typically produce in small batch sizes.

Question 25

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

Question 26

Maximum effectiveness and efficiency are reached when the just-in-time (JIT) philosophy is used only by manufacturers.

Question 27

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

Question 28

In a just-in-time (JIT) environment, process problems are more visible than they are in a traditional environment.

Question 29

One inherent risk to using just-in-time philosophy is that companies are at higher risk of inventory shortage during volatile times such as strikes, weather, etc. than the traditional philosophy.

Question 30

In a pull manufacturing system, raw materials are released to production based on forecasted demand.

Question 31

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

Question 32

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

Question 33

Make-to-order companies produce mainly to stock inventory.

Question 34

In a just-in-time (JIT) environment, process problems are less visible than they are in a traditional environment.

Question 35

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

Question 36

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

Question 37

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.

Question 38

In a just-in-time (JIT) environment, operations only respond to customer orders.

Question 39

Maximum effectiveness and efficiency are reached when the just-in-time (JIT) philosophy is used by both manufacturers and their suppliers.

Question 40

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

Question 41

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

Question 42

Non-financial accounting information is used more often for long-term operating decisions than is financial information.

Question 43

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

Question 44

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

Question 45

In a just-in-time (JIT) system, there are more transactions to record than there are in a traditional system.

Question 46

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.

Question 47

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

Question 48

In a just-in-time (JIT) system, direct labor is included in conversion costs.

Question 49

A non-financial measure is operating information that has not been translated into dollars.

Question 50

In a just-in-time (JIT) system, the work in process and raw materials inventory accounts are combined.

Question 51

In a just-in-time (JIT) environment, the journal entry to record raw materials purchases would include a credit to the raw materials inventory account.

Question 52

In a just-in-time (JIT) system, there are fewer transactions to record than there are in a traditional system.

Question 53

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

Question 54

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

Question 55

In a just-in-time (JIT) environment, the journal entry to record conversion costs would include a debit to the manufacturing overhead control account.

Question 56

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

Question 57

A just-in-time non-manufacturing process can be accomplished by consolidating, in one area, all of the services provided to a customer.

Question 58

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

Question 59

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

Question 60

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.

Question 61

Under a JIT 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 62

Which of the following is characteristic of the just-in-time 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 the above.

Question 63

____ manufacturing deals with several suppliers in hopes of finding the best price.

A) Traditional
B) Just-In-Time
C) Economic
D) Productivity improvement

Question 64

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 65

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

A) form partnerships with reliable suppliers.
B) reorganize operational processes to organized product lines.
C) train employees to perform various operations.
D) increase raw materials to produce more thereby increasing finished goods inventory.

Question 66

The just-in-time (JIT) 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 67

Which of the following results in long lead time?

A) long setup times
B) large batch sizes
C) large inventories
D) all of the above

Question 68

In a just-in-time (JIT) 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 level.
D) the lack of work in process inventory creates problems.

Question 69

Which of the following is (are) objective(s) of just-in-time (JIT) manufacturing?

A) eliminating waste
B) increasing inventory levels
C) increased number of inspections
D) all of the above

Question 70

Inventory reduction is a ____ principle.

A) just-in-time
B) traditional processing
C) economic
D) wait time

Question 71

Which of the following is characteristic of the traditional cost system?

A) Many work in process account transactions.
B) Reliance on financial performance measures.
C) Many process control points.
D) All of the above.

Question 72

What do just-in-time (JIT) manufacturers demand from their vendors?

A) High quality materials
B) Low cost materials
C) On-time deliveries
D) All of the above

Question 73

____ manufacturing philosophy emphasizes quality and zero defects.

A) Traditional
B) Just-In-Time
C) Zero-Based
D) Strategic

Question 74

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

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

Question 75

Set up time is disregarded as an improvement priority under the ____ manufacturing concept.

A) traditional
B) just-in-time
C) total quality management
D) product cost

Question 76

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 the above

Question 77

Which of the following drives work-in-process inventory levels higher?

A) Machine breakdowns
B) Production rate losses
C) Rework processes
D) All of the above

Question 78

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) Both B and C

Question 79

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

A) Product-oriented production layout
B) Employee involvement
C) Supplier partnering
D) All of the above

Question 80

Which of the following is characteristic of a just-in-time (JIT) production layout?

A) Decentralized maintenance
B) Small production batches
C) Organization around processes
D) Both A and B