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9/17/14

Managerial Accounting, 12th Edition solutions manual and test bank by Carl S. Warren | James M. Reeve | Jonathan Duchac

Managerial Accounting, 12th Edition solutions manual and test bank by Carl S. Warren | James M. Reeve | Jonathan Duchac 

CHAPTER 27 (FIN MAN); CHAPTER 12 (MAN)
COST MANAGEMENT FOR
DISCUSSION QUESTIONS
JUST-IN-TIME ENVIRONMENT

 

1.
Just-in-time processing is a philosophy that focuses on reducing time, cost, and poor quality
within manufacturing processes. The result of these efforts is a reduction in inventory levels.
2.
Move time and wait time in inventory are examples of non-value-added lead time.
3.
A product-oriented layout can be designed to minimize materials movements and reduce (or
eliminate) setup time. As a result, a product-oriented layout should have a shorter lead time
than a process-oriented layout.
4.
Long setup times lead to large production runs (batch sizes) in order to amortize the cost of
the setup. Large batch sizes result in larger inventories, which in turn lead to long wait times.
Thus, long setup times can lead directly to long lead times.
5.
Pull or “make to order” manufacturing requires the manufacturer to build product only as it is
needed for actual customer orders. As a result, finished goods, work in process, and materials
inventories are minimized. Make to order manufacturing requires a high degree of flexibility
and insignificant setup costs.
6.
Product defects can cause additional costs and unpredictability in the process in the form of
scrap, rework, record keeping, and inspection. In addition, product defects can cause a
process to shut down, because there is very little work in pro

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