Question 1

One DISADVANTAGE of an enterprise resource planning (ERP)system is:

Accepted Answer

A) the use of standard costing systems is not allowed 
B) these systems are not in accordance with Generally Accepted Accounting Principles (GAAP) 
C) the systems must often be customized to fit the strategic needs of the user 
D) the systems increase lead times when purchasing material from a supplier 
A) the use of standard costing systems is not allowed 
B) these systems are not in accordance with Generally Accepted Accounting Principles (GAAP) 
C) the systems must often be customized to fit the strategic needs of the user 
D) the systems increase lead times when purchasing material from a supplier

Question 2

Retailers generally have a high percentage of net income to revenues.

Accepted Answer

A) True 
 B)False

Question 3

Video Images is a distributor of DVDs. Quick-Disk Mart is a local retail outlet which sells blank and recorded DVDs. Quick-Disk Mart purchases tapes from Video Images at $3.00 per DVD. DVDs are shipped in packages of 20. Video Images pays all incoming freight, and Quick-Disk Mart does not inspect the DVDs due to Video Images reputation for high quality. Annual demand is 104,000 DVDs at a rate of 4,000 DVDs per week. Quick-Disk Mart earns 20% on its cash investments. The purchase-order lead time is two weeks. The following cost data are available:   What is the required annual return on investment per package?

Accepted Answer

A) $60.00 
B) $2.50 
C) $12.00 
D) $0.60 
A) $60.00 
B) $2.50 
C) $12.00 
D) $0.60

Question 4

Answer the following questions using the information below:
Short Grass Incorporated is a distributor of golf balls. Martin's Golf Supplies is a local retail outlet which sells golf balls. Martin's purchases the golf balls from Short Grass Incorporated at $0.75 per ball; the golf balls are shipped in cartons of 72. Short Grass Incorporated pays all incoming freight, and Martin's Golf Supplies does not inspect the balls due to Short Grass' reputation for high quality. Annual demand is 155,520 golf balls at a rate of 2,991 balls per week. Martin's Golf Supplies earns 12% on its cash investments. The purchase-order lead time is one week. The following cost data are available:
  
-If Martin's makes an order (1/12 of annual demand)once per month, what are the relevant total costs?

Accepted Answer

A) $1,500 
B) $652.50 
C) $2,152.50 
D) $3,000.00 
A) $1,500 
B) $652.50 
C) $2,152.50 
D) $3,000.00

Question 5

The annual relevant carrying costs of inventory consists of the sum of the:

Accepted Answer

A) ordering costs and carrying costs 
B) stockout costs and carrying costs 
C) incremental costs plus the opportunity costs of capital 
D) incremental costs plus the carrying costs 
A) ordering costs and carrying costs 
B) stockout costs and carrying costs 
C) incremental costs plus the opportunity costs of capital 
D) incremental costs plus the carrying costs

Question 6

Just-in-time purchasing describes the flow of goods, services, and information from the initial sources of materials and services to the delivery of products to consumers, regardless of whether those activities occur in the same organization or in other organizations.

Accepted Answer

A) True 
 B)False

Question 7

Lean accounting:

Accepted Answer

A) is much simpler than traditional product costing. 
B) does not compute costs for individual products. 
C) Neither of these answers is correct. 
D) Both of these answers are correct. 
A) is much simpler than traditional product costing. 
B) does not compute costs for individual products. 
C) Neither of these answers is correct. 
D) Both of these answers are correct.

Question 8

What is a supply chain, and what are the benefits of a supply chain analysis? Provide an example of these benefits.

Accepted Answer

The supply chain describes the flow of g

Question 9

Party Animals sells stuffed tigers. Products, Inc., manufactures many different stuffed animals. Party Animals orders 10,400 tigers per year, 200 per week, at $10 per tiger. The manufacturer covers all shipping costs. Party Animals earns 12% on its cash investments. The purchase-order lead time is 3 weeks. Party Animals sells 210 tigers per week. The following data are available (based on management's estimates):   What is the economic order quantity using the estimated amounts?

Accepted Answer

A) 119 stuffed tigers 
B) 223 stuffed tigers 
C) 273 stuffed tigers 
D) 325 stuffed tigers 
A) 119 stuffed tigers 
B) 223 stuffed tigers 
C) 273 stuffed tigers 
D) 325 stuffed tigers

Question 10

To determine the Economic Order Quantity, the relevant ordering costs are maximized and the relevant carrying costs are minimized.

Accepted Answer

A) True 
 B)False

Question 11

Shrinkage is measured by adding (a)the cost of the inventory recorded on the books in the absence of theft and other incidents just mentioned, and (b)the cost of inventory when physically counted.

Accepted Answer

A) True 
 B)False

Question 12

Answer the following questions using the information below:
Complete Digital Products manufactures digital cameras. For October, there were no beginning inventories of direct materials and no beginning or ending work in process. Conversion costs is the only indirect manufacturing cost category currently used. Journal entries are recorded when materials are purchased and when units are sold.
  
-Which of the following journal entries would be recorded when units are sold for the month?

Accepted Answer

A)   
B)   
C)   
D)   
A)   
B)   
C)   
D)

Question 13

The time from when an order is received by manufacturing until it becomes a finished good is referred to as:

Accepted Answer

A) work-in-process time 
B) manufacturing lead time 
C) pass-through time 
D) None of these answers is correct. 
A) work-in-process time 
B) manufacturing lead time 
C) pass-through time 
D) None of these answers is correct.

Question 14

The management accountant aids in MRP by:

Accepted Answer

A) doing journal entries as requested 
B) preparing plant appropriation requests 
C) maintaining accurate records of inventory and its costs 
D) contacting vendors to make sure they can deliver the materials in time 
A) doing journal entries as requested 
B) preparing plant appropriation requests 
C) maintaining accurate records of inventory and its costs 
D) contacting vendors to make sure they can deliver the materials in time

Question 15

Obsolescence is an example of which cost category?

Accepted Answer

A) carrying costs 
B) labor costs 
C) ordering costs 
D) quality costs 
A) carrying costs 
B) labor costs 
C) ordering costs 
D) quality costs

Question 16

Shrinkage costs result from theft by outsiders, embezzlement by employees, misclassifications, and clerical errors.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following statements about the economic-order-quantity decision model is FALSE?

Accepted Answer

A) It assumes purchasing costs are relevant when the cost per unit changes due to the quantity ordered. 
B) It assumes quality costs are irrelevant if quality is unaffected by the number of units purchased. 
C) It assumes stockout costs are irrelevant if no stockouts occur. 
D) It assumes ordering costs and carrying costs are relevant. 
A) It assumes purchasing costs are relevant when the cost per unit changes due to the quantity ordered. 
B) It assumes quality costs are irrelevant if quality is unaffected by the number of units purchased. 
C) It assumes stockout costs are irrelevant if no stockouts occur. 
D) It assumes ordering costs and carrying costs are relevant.

Question 18

What are the major relevant costs in maintaining safety stock?

Accepted Answer

A) carrying costs and purchasing costs 
B) ordering costs and purchasing costs 
C) ordering costs and stockout costs 
D) stockout costs and carrying costs 
A) carrying costs and purchasing costs 
B) ordering costs and purchasing costs 
C) ordering costs and stockout costs 
D) stockout costs and carrying costs

Question 19

Answer the following questions using the information below:
The Wood Furniture company produces a specialty wood furniture product, and has the following information available concerning its inventory items:
   Annual demand is 20,000 packages per year. The purchase price per package is $32.
-What is the economic order quantity?

Accepted Answer

A) 2,000,000 units 
B) 1,414.21 units 
C) 150,000 units 
D) 3,464.00 units 
A) 2,000,000 units 
B) 1,414.21 units 
C) 150,000 units 
D) 3,464.00 units

Question 20

The costs of goods acquired from suppliers including incoming freight or transportation costs are:

Accepted Answer

A) purchasing costs 
B) ordering costs 
C) stockout costs 
D) carrying costs 
A) purchasing costs 
B) ordering costs 
C) stockout costs 
D) carrying costs

One DISADVANTAGE of an enterprise resource planning (ERP)system is:

Retailers generally have a high percentage of net income to revenues.

The annual relevant carrying costs of inventory consists of the sum of the:

Just-in-time purchasing describes the flow of goods, services, and information from the initial sources of materials and services to the delivery of products to consumers, regardless of whether those activities occur in the same organization or in other organizations.

Lean accounting:

What is a supply chain, and what are the benefits of a supply chain analysis? Provide an example of these benefits.

To determine the Economic Order Quantity, the relevant ordering costs are maximized and the relevant carrying costs are minimized.

Shrinkage is measured by adding (a)the cost of the inventory recorded on the books in the absence of theft and other incidents just mentioned, and (b)the cost of inventory when physically counted.

The time from when an order is received by manufacturing until it becomes a finished good is referred to as:

The management accountant aids in MRP by:

Obsolescence is an example of which cost category?

Shrinkage costs result from theft by outsiders, embezzlement by employees, misclassifications, and clerical errors.

Which of the following statements about the economic-order-quantity decision model is FALSE?

What are the major relevant costs in maintaining safety stock?

The costs of goods acquired from suppliers including incoming freight or transportation costs are:

The Accountants Role in the Organization

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Activity-Based Management

Master Budget and Responsibility Accounting

Flexible Budgets, Direct-Cost Variances, and Management Control

Flexible Budgets, Overhead Cost Variances, and Management Control

Inventory Costing and Capacity Analysis

Determining How Costs Behave

Decision Making and Relevant Information

Pricing Decisions and Cost Management

Strategy, Balanced Scorecard, and Strategic Profitability Analysis

Cost Allocation, Customer-Profitability Analysis, and Sales-Variance Analysis

Allocation of Support-Department Costs, Common Costs, and Revenues

Cost Allocation: Joint Products and Byproducts

Process Costing

Spoilage, Rework, and Scrap

Balanced Scorecard: Quality, Time, and the Theory of Constraints

Capital Budgeting and Cost Analysis

Management Control Systems, Transfer Pricing, and Multinational Considerations

Performance Measurement, Compensation, and Multinational Considerations

Filters

Exam 20: Inventory Management, Just-In-Time, and Simplified Costing Methods

One DISADVANTAGE of an enterprise resource planning (ERP)system is:

Retailers generally have a high percentage of net income to revenues.

The annual relevant carrying costs of inventory consists of the sum of the:

Just-in-time purchasing describes the flow of goods, services, and information from the initial sources of materials and services to the delivery of products to consumers, regardless of whether those activities occur in the same organization or in other organizations.

Lean accounting:

What is a supply chain, and what are the benefits of a supply chain analysis? Provide an example of these benefits.

To determine the Economic Order Quantity, the relevant ordering costs are maximized and the relevant carrying costs are minimized.

Shrinkage is measured by adding (a)the cost of the inventory recorded on the books in the absence of theft and other incidents just mentioned, and (b)the cost of inventory when physically counted.

The time from when an order is received by manufacturing until it becomes a finished good is referred to as:

The management accountant aids in MRP by:

Obsolescence is an example of which cost category?

Shrinkage costs result from theft by outsiders, embezzlement by employees, misclassifications, and clerical errors.

Which of the following statements about the economic-order-quantity decision model is FALSE?

What are the major relevant costs in maintaining safety stock?

The costs of goods acquired from suppliers including incoming freight or transportation costs are:

The Accountants Role in the Organization

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Activity-Based Management

Master Budget and Responsibility Accounting

Flexible Budgets, Direct-Cost Variances, and Management Control

Flexible Budgets, Overhead Cost Variances, and Management Control

Inventory Costing and Capacity Analysis

Determining How Costs Behave

Decision Making and Relevant Information

Pricing Decisions and Cost Management

Strategy, Balanced Scorecard, and Strategic Profitability Analysis

Cost Allocation, Customer-Profitability Analysis, and Sales-Variance Analysis

Allocation of Support-Department Costs, Common Costs, and Revenues

Cost Allocation: Joint Products and Byproducts

Process Costing

Spoilage, Rework, and Scrap

Balanced Scorecard: Quality, Time, and the Theory of Constraints

Capital Budgeting and Cost Analysis

Management Control Systems, Transfer Pricing, and Multinational Considerations

Performance Measurement, Compensation, and Multinational Considerations

Filters