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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

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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

How do an income statement and a balance sheet for a manufacturing company and a merchandising company differ?

The following calendar year-end information is taken from the December 31, 2017, adjusted trial balance and other records of Leone Company.

Advertising expenses

\(28,750

Miscellaneous production costs

\)8,425

Depreciation expenses – office equipment

7,250

Office salaries expense

63,000

Depreciation expenses – selling equipment

8,600

Raw material purchases

925,000

Depreciation expenses – factory equipment

33,550

Rent expenses – office space

22,000

Factory supervision

102,600

Rent expenses – selling space

26,100

Factory supplies used

7,350

Rent expenses – factory building

76,800

Factory utilities

33,000

Maintenance expenses – factory equipment

35,400

Direct labor

675,480

Sales

4,462,500

Indirect labor

56,875

Sales salaries expenses

392,560

Required

1. Classify each cost as either a product or period cost.

2. Classify each product cost as either direct materials, direct labor, or factory overhead.

3. Classify each period cost as either selling expenses or general and administrative expenses.

Refer to the data in Exercise 14-8. For each company, prepare (1) an income statement, Ignore income taxes.

Indicate in the following chart the most likely source of information for each business decision. Use M for managerial accounting information and F for financial accounting information.

Business Decision

Primary Information Source

1. Determine whether to lend to a company.

2. Evaluate a purchasing department’s performance.

3. Report financial performance to board of directors.

4. Estimate product cost for a new line of shoes.

5. Plan the budget for next quarter.

6. Measure the profitability of an individual store.

7. Prepare financial reports according to GAAP

8. Determine location and size for a new plant.

Given the following selected account balances of Delray Mfg., prepare its schedule of cost of goods manufactured for the year ended December 31, 2017. Include a listing of the individual overhead account balances in this schedule.

Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . \(1,250,000

Raw materials inventory, Dec. 31, 2016 . . . . . . . . . 37,000

Work in process inventory, Dec. 31, 2016 . . . . . . . 53,900

Finished goods inventory, Dec. 31, 2016 . . . . . . . . 62,750

Raw materials purchases . . . . . . . . . . . . . . . . . . . . . 175,600

Direct labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 225,000

Factory computer supplies used . . . . . . . . . . . . . . . 17,840

Indirect labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47,000

Repairs—Factory equipment . . . . . . . . . . . . . . . . . \) 5,250

Rent cost of factory building . . . . . . . . . . . . . . . . . 57,000

Advertising expense . . . . . . . . . . . . . . . . . . . . . . . 94,000

General and administrative expenses . . . . . . . . . 129,300

Raw materials inventory, Dec. 31, 2017 . . . . . . . 42,700

Work in process inventory, Dec. 31, 2017 . . . . . . 41,500

Finished goods inventory, Dec. 31, 2017 . . . . . . . 67,300

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