Value Stream Income Statements, Which Are Part of a Lean

question 76

Multiple Choice

Value stream income statements, which are part of a lean accounting system, have all the following characteristics except:

• A) They report segment profits in the form of value streams.
• B) They attempt to separate out the short-term effects of reductions in inventory.
• C) They separate traceable from non-traceable costs on the income statement.
• D) They calculate average costs for units in each value stream.
• E) They eliminate the need to deal with indirect costs.

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Definitions:

Overstated

A situation where the reported value or figures are higher than the true or accurate value, often unintentionally.

Cost of Goods Sold

The direct costs attributable to the production of goods sold by a company, including materials and labor.

Average Number

A value found by adding all numbers in a set together and then dividing by the quantity of numbers in that set.

Inventory

The unfinished materials, items in production, and completed products that form part of a company's assets, which are available for sale or will soon be.