Question 1

Information about Bodacious Corporation is as follows:  By how much did profits change as a result of changes in productivity related to materials?

Accepted Answer

The answer of Information about Bodacious Corporation is as follows:...

Question 2

At the end of 2014, Diatomic Company implemented a new labor process and redesigned its product with the expectation that input usage efficiency would increase. Now, at the end of 2015, the president of the company wants an assessment of the changes on the company's productivity. The data needed for the assessment are as follows:  By how much did profit change as a result of profitability changes in power?

Accepted Answer

The answer of At the end of 2014, Diatomic Company...

Question 3

At the end of 2014, Diatomic Company implemented a new labor process and redesigned its product with the expectation that input usage efficiency would increase. Now, at the end of 2015, the president of the company wants an assessment of the changes on the company's productivity. The data needed for the assessment are as follows:  By how much did profit change as a result of profitability changes in labor?

Accepted Answer

From the data provided, we can see that the labor productivity has increased by 25% [(120-96)/96]. This means that the input usage efficiency has increased, resulting in a decrease in labor cost per unit sold. However, the cost of goods sold has also increased by 10%, which could be due to an increase in raw material cost or other factors. Therefore, the overall profitability change due to labor changes is a $23,625 increase [(600,000-517,500)-(480,000-528,000)]. Hence, the correct answer is C.

Question 4

Serendipity Manufacturing implemented lean manufacturing in its Wheeling plant as a pilot program. During the most recent three weeks, the following data pertaining to a specific product line value stream was collected:

Answer:
Week 1:
Sales = 500 units @ $50 per unit selling price
Beginning inventory = 80 units @ $15 ($5 materials, $10 conversion)
Production = 500 units @ $15 ($5 materials, $10 conversion)

Week 2:
Sales = 675 units at $50 per unit selling price
Beginning inventory = 80 units at $15 ($5 materials, $10 conversion)
Production = 595 units at $15 ($5 materials, $10 conversion)

Week 3:
Sales = 650 units at $50 per unit selling price
Beginning Inventory = 0
Production = 700 units at $15 ($5 materials, $10 conversion)

Required:
1.	Prepare a traditional income statement for each week.
2.	Calculate the average value stream product cost for each week. What does this cost signal, if anything?
3.	Prepare a value stream income statement for each week. Assume that any increase in inventory is valued at average cost. Comment on the financial performance of the value stream and its relationship to traditional income measurement.

Accepted Answer

The answer of Serendipity Manufacturing implemented lean manufacturing in its...

Question 5

Lampost Manufacturing provides the following information:
To produce a unit of product:
  There is a wait time of 5 minutes before the mixing department begins a batch, 5 minutes between the mixing and molding departments, a move and pre-wait between molding and casting of 10 minutes, and a move and pre-wait between the casting and finishing departments of 8 minutes.
Required:

Accepted Answer

The answer of Lampost Manufacturing provides the following information:
To produce...

Question 6

Describe the objectives and characteristics of a Lean Manufacturing system.

Accepted Answer

The answer of Describe the objectives and characteristics of a...

Question 7

Information about Kerkonian Corporation is as follows:  What is the price-recovery component?

Accepted Answer

The answer of Information about Kerkonian Corporation is as follows:...

Question 8

At the end of 2014, Diatomic Company implemented a new labor process and redesigned its product with the expectation that input usage efficiency would increase. Now, at the end of 2015, the president of the company wants an assessment of the changes on the company's productivity. The data needed for the assessment are as follows:  What is the total change in profits from 2014 to 2015?

Accepted Answer

The answer of At the end of 2014, Diatomic Company...

Question 9

In calculating the profit linkage, PQ represents the productivity-neutral quantity of input. How is PQ calculated?

Accepted Answer

PQ is calculated as the current period output divided by the base period productivity ratio. This takes into account any changes in productivity over time and allows for an accurate calculation of profit linkage. A and D are not correct because they do not account for productivity changes, and C uses the prior period output instead of the current period output.

Question 10

Information about Roosevelt Corporation is as follows:  What is the price-recovery component?

Accepted Answer

The answer of Information about Roosevelt Corporation is as follows:...

Question 11

Serendipity Manufacturing implemented lean manufacturing in its Wheeling plant as a pilot program. During the most recent three weeks, the following data pertaining to a specific product line value stream was collected:

Accepted Answer

The answer of Serendipity Manufacturing implemented lean manufacturing in its...

Question 12

At the end of 2014, Diatomic Company implemented a new labor process and redesigned its product with the expectation that input usage efficiency would increase. Now, at the end of 2015, the president of the company wants an assessment of the changes on the company's productivity. The data needed for the assessment are as follows:  How much profit was generated in 2015?

Accepted Answer

The profit generated in 2015 can be calculated by subtracting the total costs from the total revenue. From the data provided in the table, we can see that the total revenue is $860,000 and the total costs are $540,050. Therefore, the profit generated in 2015 is:

Profit = Total revenue - Total costs
Profit = $860,000 - $540,050
Profit = $319,950

Hence, the best choice is B, which is $319,950.

Question 13

Information about DeLorean Corporation is as follows:  What is the price-recovery component?

Accepted Answer

The answer of Information about DeLorean Corporation is as follows:...

Question 14

The profit linkage rate

Accepted Answer

The profit linkage rate calculates the cost of the inputs that would have been used in absence of any productivity change (baseline cost) and compares it to the cost of the inputs actually used for the current period. This helps to measure the impact of changes in productivity on the firm's profitability.

Question 15

Information about Bodacious Corporation is as follows:  What is the labor productivity ratio for 2014?

Accepted Answer

The answer of Information about Bodacious Corporation is as follows:...

Question 16

At the end of 2014, Diatomic Company implemented a new labor process and redesigned its product with the expectation that input usage efficiency would increase. Now, at the end of 2015, the president of the company wants an assessment of the changes on the company's productivity. The data needed for the assessment are as follows:  By how much did profit change as a result of profitability changes in materials?

Accepted Answer

The answer of At the end of 2014, Diatomic Company...

Question 17

Information about Bodacious Corporation is as follows:  By how much did profits change as a result of changes in productivity related to labor?

Accepted Answer

The answer of Information about Bodacious Corporation is as follows:...

Question 18

At the end of 2014, Cardigan Corporation implemented a new labor process and redesigned its product with the expectation that input usage efficiency would increase. Now, at the end of 2015, the president of the company wants an assessment of the changes on the company's productivity. The data needed for the assessment are as follows:  What is the price-recovery component?

Accepted Answer

The answer of At the end of 2014, Cardigan Corporation...

Question 19

The difference between the total profit change and the profit-linked productivity change is called:

Accepted Answer

The difference between the total profit change and the profit-linked productivity change is due to the price recovery component, which reflects changes in the firm's pricing strategy and pricing power. Therefore, option D is the correct answer. Options A, B, and C are not relevant in this context.

Question 20

At the end of 2014, Diatomic Company implemented a new labor process and redesigned its product with the expectation that input usage efficiency would increase. Now, at the end of 2015, the president of the company wants an assessment of the changes on the company's productivity. The data needed for the assessment are as follows:  How much profit was generated in 2014?

Accepted Answer

The data provided in the image shows that the profit generated in 2014 was $270,000.

Quiz 15: Lean Accounting and Productivity Measurement

Information about Bodacious Corporation is as follows: By how much did profits change as a result of changes in productivity related to materials?

Describe the objectives and characteristics of a Lean Manufacturing system.

Information about Kerkonian Corporation is as follows: What is the price-recovery component?

In calculating the profit linkage, PQ represents the productivity-neutral quantity of input. How is PQ calculated?

Information about Roosevelt Corporation is as follows: What is the price-recovery component?

Serendipity Manufacturing implemented lean manufacturing in its Wheeling plant as a pilot program. During the most recent three weeks, the following data pertaining to a specific product line value stream was collected:

Information about DeLorean Corporation is as follows: What is the price-recovery component?

The profit linkage rate

Information about Bodacious Corporation is as follows: What is the labor productivity ratio for 2014?

Information about Bodacious Corporation is as follows: By how much did profits change as a result of changes in productivity related to labor?

The difference between the total profit change and the profit-linked productivity change is called: