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Many fast-food restaurants compete on lean business practices. Match each of the following activities at a fast-food restaurant with one of the three lean business practices a, b, or c that it strives to achieve. Some activities might relate to more than one lean business practice.

1. Courteous employees a. Just-in-time (JIT)

2. Food produced to order b. Continuous improvement (CI)

3. Clean tables and floors c. Total quality management (TQM)

4. Orders filled within three minutes

5. Standardized food-making processes

6. New product development

Short Answer

Expert verified

All the activities are assigned with appropriate business practices.

Step by step solution

01

Courteous Employees

The courteous employees will come under Total quality management (TQM) as TQM focuses on enhancing the quality of business operations. The goal of managers and staff is to find waste in all aspects of the organization, including accounting processes like payroll and disbursements.

02

Food produced to order

The food produced to order will come under Just-in-time (JIT) because the food order is on time and JIT manufacturing is a system that acquires inventory and produces only when needed.

03

Clean tables and floors

The clean tables and floors will come under Total quality management (TQM) as in this all the clean tables and floors shows the quality management of the company.

04

Orders filled within three minutes

The orders filled within three minutes will come under Just-in-time (JIT) as the timely delivered order is done by the system of just in time in which only that much produced which is required.

05

Standardized food-making processes

The standardized food-making processes will come under Total quality management (TQM) as the standard process will reduce the wastage of the company’s resources.

06

New product development

The new product development will come under continuous improvement. Every business should make new developments to survive and compete with other companies.

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Most popular questions from this chapter

What are the three categories of manufacturing costs?

Should we evaluate a production manager’s performance on the basis of operating expenses? Why?

Using the data from Problem 14-2A and the following additional inventory information for Leone Company, complete the requirements below. Assume income tax expense is \(233,725 for the year.

Inventories

Raw material, December 31, 2016

\)166,850

Raw materials, December 31, 2017

182,000

Work in process, December 31, 2016

15,700

Work in process, December 31, 2017

19,380

Finished goods, December 31, 2016

167,350

Finished goods, December 31, 2017

136,490

Required

1. Prepare the company’s 2017 schedule of cost of goods manufactured.

2. Prepare the company’s 2017 income statement that reports separate categories for (a) selling expenses and (b) general and administrative expenses.

Analysis Component

3. Compute the (a) inventory turnover, defined as cost of goods sold divided by average inventory, and (b) days’ sales in inventory, defined as 365 times ending inventory divided by cost of goods sold, for both its raw materials inventory and its finished goods inventory. (To compute turnover and days’ sales in inventory for raw materials, use raw materials used rather than cost of goods sold.) Discuss some possible reasons for differences between these ratios for the two types of inventories. Round answers to one decimal place.

Question: Listed below are product costs for production of footballs. Classify each cost as either variable (V) or fixed (F).

  1. Leather covers for footballs
  2. Machinery depreciation (straight-line)
  3. Wages of assembly workers
  4. Lace to hold footballs together
  5. Insurance premium on building
  6. Factory supervisor salary

Listed here are the total costs associated with the 2017 production of 1,000 drum sets manufactured by TrueBeat. The drum sets sell for \(500 each.

COSTSVariable or fixed
Product or period

Variable

Variable

Fixed

Product

Period

1. Plastic for casting - \)17,000


2. Wages of assembly workers - \(82,000


3. Property taxes on factory—\)5,000


4. Accounting staff salaries—\(35,000


5. Drum stands (1,000 stands purchased)—\)26,000


6. Rent cost of equipment for sales staff—\(10,000


7. Upper management salaries—\)125,000


8. Annual flat fee for factory maintenance service—\(10,000


9. Sales commissions—\)15 per unit


10. Machinery depreciation, straight-line—$40,000


Required

1. Classify each cost and its amount as (a) either variable or fixed and (b) either product or period. (The first cost is completed as an example.)

2. Compute the manufacturing cost per drum set.

Analysis Component

3. Assume that 1,200 drum sets are produced in the next year. What do you predict will be the total cost of plastic for the casings and the per unit cost of the plastic for the casings? Explain.

4. Assume that 1,200 drum sets are produced in the next year. What do you predict will be the total cost of property taxes and the per unit cost of the property taxes? Explain.

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