Question 1

Vander Belt Manufacturing, Inc., is considering reorganizing its plant into manufacturing cells. The following estimates have been prepared to evaluate the benefits from the reorganization:
 
-As a result of the layout reorganization,reduced levels of work-in-process inventory are projected to decrease inventory carrying costs annually by:

Accepted Answer

A) (Before: $100,000 × 11%)less ( After: $80,000 × 11%)equals cost savings of $2,200.

Question 2

Experience shows that it is more expensive to prevent defects than to detect and repair them.

Accepted Answer

Experience shows that it is less expensive to prevent defects than to detect and repair them.

Question 3

Vander Belt Manufacturing, Inc., is considering reorganizing its plant into manufacturing cells. The following estimates have been prepared to evaluate the benefits from the reorganization:
 
-As a result of the layout reorganization,incremental manufacturing costs are projected to:

Accepted Answer

C)(Before: $500,000 × 40%)less (After: $750,000 × 30%)equals additional costs of $25,000.

Question 4

________ is the most common method of gathering information where companies independently obtain information about one or several other companies that excel in the area of interest.

Accepted Answer

Unilateral (covert) benchmarking is the most common method of gathering information where companies independently obtain information about one or several other companies that excel in the area of interest. It is a one-sided approach where a company gathers information without the knowledge or participation of the benchmarked company. This method provides an opportunity for companies to avoid potential resistance from the benchmarked company and to gather information more efficiently.

Question 5

Vander Belt Manufacturing, Inc., is considering reorganizing its plant into manufacturing cells. The following estimates have been prepared to evaluate the benefits from the reorganization:
 
-As a result of switching to a cellular manufacturing operation,total benefits are projected to increase annually by:

Accepted Answer

B)
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Question 6

All of the following are true regarding benchmarking EXCEPT:

Accepted Answer

Benchmarking initiatives do not necessarily result in quick changes to the work environment. The information gathered through benchmarking may require analysis and customization to fit the specific needs and constraints of an organization, which may take time to implement.

Question 7

Bingington Corporation is using the Kaizen approach to budgeting for 2011.The budgeted income statement for the month ended January 31,2011 is as follows:

Under the Kaizen approach,cost of goods sold and variable operating expenses are budgeted to decline by 2% per month.
Required:
Prepare a Kaizen-based budgeted income statement for the month ended February 28,2011.Assume sales are constant each month.

Accepted Answer

The answer of Bingington Corporation is using the Kaizen approach...

Question 8

Allscott Company is developing its budgets for 2012 and,for the first time,they will use the Kaizen approach.The initial 2012 income statement,based on static data from 2011,is as follows:

Selling prices for 2012 are expected to increase by 8%, and sales volume in units will decrease by 10%. The cost of goods sold as estimated by the Kaizen approach will decline by 10% per unit. Other than depreciation, all other operating costs are expected to decline by 5%.
Required:
Prepare a Kaizen-based budgeted income statement for the year ended December 31,2012.

Accepted Answer

The answer of Allscott Company is developing its budgets for...

Question 9

DJK Enterprises are using the Kaizen approach to budgeting for 2011 . The budgeted income statement for January 2011 is as follows:

Under the Kaizen approach, cost of goods sold and variable operating expenses are budgeted to decline by 1% per month.
-What is the budgeted gross margin for March 2011?

Accepted Answer

D)$500,000 - $294,030 = $205,970

Question 10

________ is where participants meet openly to discuss their methods,visit each other's sites,and generally have a long-run association.

Accepted Answer

Group benchmarking is a type of benchmarking where participants meet openly to discuss their methods, visit each other's sites, and generally have a long-run association.

Question 11

Vander Belt Manufacturing, Inc., is considering reorganizing its plant into manufacturing cells. The following estimates have been prepared to evaluate the benefits from the reorganization:
 
-After the change,work-in-process inventory carrying costs are projected to decrease because of:

Accepted Answer

Reorganizing the plant into manufacturing cells will result in several benefits, including reduced costs in materials handling, lower financing costs, and decreased need for inventory storage. Therefore, all of the choices (A, B, and C) are correct.

Question 12

Benchmarking requires that organizational members first look to the best practices of other organizations for guidance on improving and then understand their current operations and approaches to conducting business,

Accepted Answer

Benchmarking requires that organizational members first understand their current operations and approaches to conducting business and then look to the best practices of other organizations for guidance on improving.

Question 13

After the change,direct labor costs as a percentage of sales are projected to decrease because:

Accepted Answer

The new work design is anticipated to require fewer employees, which should result in lower direct labor costs as a percentage of sales. The other options may have effects on cost but are not directly related to direct labor costs as a percentage of sales.

Question 14

After the change,a decreased amount of work-in-process inventory is projected because:

Accepted Answer

The decreased amount of work-in-process inventory is projected because of reduced cycle times resulting from a more continuous production flow. This means that products move more quickly and smoothly through the production process, reducing the need for excess inventory to manage bottlenecks or delays. Options B and C are not relevant to the explanation given.

Question 15

Vander Belt Manufacturing, Inc., is considering reorganizing its plant into manufacturing cells. The following estimates have been prepared to evaluate the benefits from the reorganization:
 
-After the change,sales are projected to increase because:

Accepted Answer

The answer of Vander Belt Manufacturing, Inc., is considering reorganizing...

Question 16

DJK Enterprises are using the Kaizen approach to budgeting for 2011 . The budgeted income statement for January 2011 is as follows:

Under the Kaizen approach, cost of goods sold and variable operating expenses are budgeted to decline by 1% per month.
-What is the budgeted cost of goods sold for March 2011?

Accepted Answer

A)$300,000 × 0.99 × 0.99 = $294,030

Question 17

Work-in-process inventory generally decreases after the implementation of a just-in-time inventory system.

Accepted Answer

A just-in-time inventory system aims to minimize inventory levels, including work-in-process inventory, and improve overall production efficiency by producing and delivering products to customers only when they are needed. Therefore, it is likely that work-in-process inventory would decrease after the implementation of a just-in-time inventory system.

Question 18

________ can be a cost beneficial way to gather information because the company can avoid mistakes other companies have made.

Accepted Answer

Benchmarking is the process of comparing one's business processes and performance metrics to industry bests or best practices from other companies. This can help a company understand where it stands in comparison to others and avoid common pitfalls, making it a cost-effective way to gather information.

Quiz 7: Measuring and Managing Process Performance