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

Globe Inc.is a distributor of DVDs.DVD Mart is a local retail outlet which sells blank and recorded DVDs.DVD Mart purchases DVDs from Globe at $25.00 per DVD;DVDs are shipped in packages of 63.Globe pays all incoming freight,and DVD Mart does not inspect the DVDs due to Globe's reputation for high quality.Annual demand is 314,000 DVDs at a rate of 6600 DVDs per week.DVD Mart earns 15% on its cash investments.The purchase-order lead time is one week.The following cost data are available: What are the annual relevant ordering costs?

A grouping of all the different types of equipment used to make a given product is referred to as ________.

The Allianz Company produces a specialty wood furniture product,and has the following information available concerning its inventory items: Annual demand is 34,000 packages per year.The purchase price per package is $51. What is the annual relevant ordering costs?

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

Vision Company sells optical equipment.Blitz Company manufactures special glass lenses.Vision orders 11,700 lenses per year,260 per week,at $38 per lens.Blitz covers all shipping costs.Vision earns 22% on its cash investments.The purchase-order lead time is 4.0 weeks.Vision sells 315 lenses per week.The following data are available: What is the economic order quantity for Vision?

The accounting procedures in a backflush-costing system strictly adhere to Generally Accepted Accounting Principles (GAAP).

Among different types of costs associated with inventory,four categories of quality costs are ________.

Which of the following terms is defined as the time required to get equipment,tools,and materials ready to start production?

Games R Us manufactures various games.For March,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 conversion costs are allocated under backflush costing. Which of the following journal entries properly records the purchase of direct materials?

For supply item ABC,Andrews Company has been ordering 125 units based on the recommendation of the salesperson who calls on the company monthly.A new purchasing agent has been hired by the company who wants to start using the economic-order-quantity method and its supporting decision elements.She has gathered the following information: Required: Determine the EOQ,average inventory,orders per year,average daily demand,reorder point,annual ordering costs,and annual carrying costs.

Vision Company sells optical equipment.Blitz Company manufactures special glass lenses.Vision orders 11,400 lenses per year,220 per week,at $40 per lens.Blitz covers all shipping costs.Vision earns 22% on its cash investments.The purchase-order lead time is 3.0 weeks.Vision sells 315 lenses per week.The following data are available: What is the reorder point?

Among different types of costs associated with inventory,the opportunity cost of the investment tied up in inventory is a(n)________.

Which of the following statements best defines backflush costing system?

Games R Us manufactures various games.For March,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 conversion costs are allocated under backflush costing. Which of the journal entries properly records conversion costs?

All of the following are reasons why a company might carry a safety stock except:

The demand-pull feature of JIT production systems results in close coordination among workstations and smooths the flow of goods.

In a just-in-time system,suppliers are selected primarily on the basis of their ability to provide materials and products at the lowest possible price.

Sharing sales information throughout the supply chain leads to which of the following?

Under economic-order-quantity decision model,which of the following is an assumption? assumed that ________.

A system that emphasizes lean production techniques,low quantities of inventory,and close coordination among production workstations is called ________.