81. 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
82. 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
83. 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 causes inventories to increase
D. the lack of work in process inventory creates the problems
84. 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 to have to sell
85. Which of the following is characteristic of a just-in-time (JIT) 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
86. Which of the following is characteristic of a 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
87. Which of the following is an example of a nonfinancial measure?
A. Lead time
B. Setup time
C. Units scrapped
D. All of the above
88. Which of the following is best suited to providing timely and focused performance information?
A. Nonfinancial information
B. Financial accounting information
C. Cost accounting information
D. Variance analysis
89. Rabbitt Co. operates in a just-in-time (JIT) manufacturing environment. For June production, Rabbitt purchased 5,000 units of raw materials at $5.00 per unit on account. The journal entry required to record this transaction is:
A. Raw and In Process Inventory 25,000
Accounts Payable 25,000
B. Cost of Goods Manufactured 25,000
Accounts Payable 25,000
C. Finished Goods 25,000
Accounts Payable 25,000
D. Raw Materials Inventory 25,000
Accounts Payable 25,000
90. Kilbuck Manufacturing operates in a just-in-time (JIT) manufacturing environment. Kilbuck’s actual conversion costs for the month of April follow:
Direct and indirect labor
$120,000
Machine depreciation
85,000
Maintenance and supplies
60,000
Total conversion costs
$265,000
========
The journal entry to record April’s conversion costs will include:
A. a debit to Work in Process Inventory
B. a debit to Raw Materials Inventory
C. a credit to Raw and In Process Inventory
D. a debit to Raw and In Process Inventory
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