Just-in-time inventory assumes all of the following, except:1. Zero defects.2. Resources will only be introduced as they are needed.3. Just-in-time inventory presumes rst-in, rst-out costing.4. Production of components only occurs only when requested further downstream in the manufacturing cycle.

Just-in-time inventory assumes all of the following, except:1. Zero defects.2. Resources will only be introduced as they are needed.3. Just-in-time inventory presumes rst-in, rst-out costing.4. Production of components only occurs only when requested further downstream in the manufacturing cycle.

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Description: Just-in-time inventory assumes all of the following, except:1. Zero defects.2. Resources will only be introduced as they are needed.3. Just-in-time inventory presumes rst-in, rst-out costing.4. Production of components only occurs only when requested

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter13: Lean Manufacturing And Activity Analysis

Section: Chapter Questions

Problem 9DQ

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Concept explainers

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.

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Just-in-time inventory assumes all of the following, except:
1. Zero defects.
2. Resources will only be introduced as they are needed.
3. Just-in-time inventory presumes rst-in, rst-out costing.
4. Production of components only occurs only when requested further downstream in the manufacturing cycle.

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Just-in-time inventory assumes all of the following, except: 1. Zero defects. 2. Resources will only be introduced as they are needed. 3. Just-in-time inventory presumes first-in, first-out costing. 4. Production of components only occurs only when requested further downstream in the manufacturing cycle.
I.-When assigning costs to partially completed units in the ending work in process inventory, it is not necessary to consider the percentage completion of the units under the weighted-average method. II.-The cost per equivalent unit for conversion costs will always be the same under both the FIFO and the weighted-average methods if there is no ending work in process inventory A. Only statement I is true B. Both statements are false C. Both statements are true D. Only statement II is true
0. The weighted-average method of process costing differs from the FIFO method of process costing in that the weighted-average method: a. can be used under any cost flow assumption. b. does not require the use of predetermined overhead rates. C. keeps costs in the beginning inventory separate from current period costs. d. does not consider the degree of completion of units in the beginning work in process inventory when computing equivalent units of production.
Under absorption costing, fixed manufacturing overhead costs are:A. are deferred in inventory when production exceeds sales.B. are always treated as period costs.C. are released from inventory when production exceeds sales.D. none of the above
The average and FIFO process costing methods differ in that the average method: a. Can be used under any cost flow assumption. b. Does not consider the degree of completion of beginning work in process inventory when computing equivalent units of production. c. Is much more difficult to apply than the FIFO method. D. Considers the ending work in process inventory only partially complete.
The weighted-average method of process costing: a. can be used under any cost flow assumption. b. does not require the use of predetermined overhead rates. c. keeps costs in the beginning inventory separate from current period costs. d. does not consider the degree of completion of units in the beginning work in process inventory when computing equivalent units of production.
The fundamental EOQ model a. provides for fluctuating lead times during reorder cycles. b. is relatively insensitive to errors in demand, procurement costs, and carrying costs. c. focuses on the trade-off between production costs and carrying costs. d. is stochastic in nature. e. is best used in conjunction with a periodic inventory system.
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.
4. Under Just-in-time inventory system and Backflush Costing, what costing method is ideally employed? A.Normal Costing B.Actual Costing C.Standard Costing D.Budgeted Costing E.None of the above
The FIFO method of process costing intermingles current costs of production with costs of beginning inventory in computing the cost per equivalent unit. True False
The FIFO method provides a major advantage over the weighted-average method in that: a. the calculation of equivalent units is less complex under the FIFO method. b. the FIFO method treats units in the beginning inventory as if they were started and completed during the current period. c. the FIFO method provides measurements of work done during the current period. d. the weighted-average method ignores units in the beginning and ending work in process inventories.
S1: Abnormal spoilage is considered a period cost.S2: Backflush costing requires fewer allocations than traditional accounting methods.S3: Lean manufacturing and just-in-time (JIT) systems are both concerned with reduction of inventory levels. Group of answer choices True; False; False True; True; False False; True; True False; False; True False; False; False True; True; True