Question 1

Safety stock is

Accepted Answer

A)  the cost of holding inventory. 
B)  a non-value activity and should never be considered. 
C)  not considered when calculating the reorder point. 
D)  extra inventory carried to serve as insurance against fluctuations in demand. 
A)  the cost of holding inventory. 
B)  a non-value activity and should never be considered. 
C)  not considered when calculating the reorder point. 
D)  extra inventory carried to serve as insurance against fluctuations in demand.

Question 2

Comfy Wheels Bus Company produces buses. In order to produce the seats for the buses, special equipment must be set up. The setup cost per frame is $35. The cost of carrying seats in inventory is $6 per seat per year. The company produces 90,000 buses per year. The number of seats that should be produced per setup in order to minimize the total setup and carrying costs is

Accepted Answer

A)  933 seats. 
B)  2,050 seats. 
C)  1,025 seats. 
D)  513 seats. 
A)  933 seats. 
B)  2,050 seats. 
C)  1,025 seats. 
D)  513 seats.

Question 3

Which of the following is NOT a common reason for shutdowns?

Accepted Answer

A)  safety stock of inventory 
B)  defective materials or subassemblies 
C)  machine failure 
D)  unavailability of a material of subassembly 
A)  safety stock of inventory 
B)  defective materials or subassemblies 
C)  machine failure 
D)  unavailability of a material of subassembly

Question 4

Knoxville Manufacturing Company produces X and Y with contribution margins per unit of $10 and $90, respectively. Only 200 labor hours and 400 machine hours are available for production. Time requirements to produce one unit of X and Y are as follows:
  What is the objective function to maximize profits for Knoxville Manufacturing Company?

Accepted Answer

A)  Minimize 10X + 90Y 
B)  Maximize 10X + 90Y 
C)  Maximize 1X + 2Y 
D)  Minimize 1X + 2Y 
A)  Minimize 10X + 90Y 
B)  Maximize 10X + 90Y 
C)  Maximize 1X + 2Y 
D)  Minimize 1X + 2Y

Question 5

The Kanban system is used to

Accepted Answer

A)  ensure parts or materials are available when needed. 
B)  signal when preventive maintenance is needed. 
C)  signal when a defective unit has been produced. 
D)  ensure idle time of workers is not wasted. 
A)  ensure parts or materials are available when needed. 
B)  signal when preventive maintenance is needed. 
C)  signal when a defective unit has been produced. 
D)  ensure idle time of workers is not wasted.

Question 6

Aeroboats Frame Corporation increased the size of several inventory order quantities that had previously been determined using the EOQ model. What is the impact on the total annual ordering costs?

Accepted Answer

A)  increase 
B)  decrease 
C)  no change 
D)  cannot be determined 
A)  increase 
B)  decrease 
C)  no change 
D)  cannot be determined

Question 7

Figure 20 -2 Walrus Company has the following information available concerning one of its inventory items:
  Refer to Figure 20-2. If there is a delay in shipping the item, approximately how many days can be covered by the safety stock?

Accepted Answer

A)  5 days 
B)  31 days 
C)  26 days 
D)  110 days 
A)  5 days 
B)  31 days 
C)  26 days 
D)  110 days

Safety stock is

Which of the following is NOT a common reason for shutdowns?

The Kanban system is used to

Aeroboats Frame Corporation increased the size of several inventory order quantities that had previously been determined using the EOQ model. What is the impact on the total annual ordering costs?

Figure 20 -2 Walrus Company has the following information available concerning one of its inventory items: Refer to Figure 20-2. If there is a delay in shipping the item, approximately how many days can be covered by the safety stock?

Introduction to Cost Management

Basic Cost Management Concepts

Cost Behavior

Activity-Based Costing

Product and Service Costing: Job-Order System

Process Costing

Allocating Costs of Support Departments and Joint Products

Budgeting for Planning and Control Key

Standard Costing: a Functional-Based Control Approach

Decentralization: Responsibility Accounting, Performance Evaluation, and Transfer Pricing

Strategic Cost Management

Activity-Based Management

The Balanced Scorecard: Strategic-Based Control

Quality and Environmental Cost Management

Lean Accounting and Productivity Measurement

Cost-Volume-Profit Analysis

Activity Resource Usage Model and Tactical Decision Making

Pricing and Profitability Analysis

Capital Investment

Filters

Exam 20: Inventory Management: Economic Order Quantity, Jit, and the Theory of Constraints

Safety stock is

Which of the following is NOT a common reason for shutdowns?

The Kanban system is used to

Aeroboats Frame Corporation increased the size of several inventory order quantities that had previously been determined using the EOQ model. What is the impact on the total annual ordering costs?

Figure 20 -2 Walrus Company has the following information available concerning one of its inventory items: Refer to Figure 20-2. If there is a delay in shipping the item, approximately how many days can be covered by the safety stock?

Introduction to Cost Management

Basic Cost Management Concepts

Cost Behavior

Activity-Based Costing

Product and Service Costing: Job-Order System

Process Costing

Allocating Costs of Support Departments and Joint Products

Budgeting for Planning and Control Key

Standard Costing: a Functional-Based Control Approach

Decentralization: Responsibility Accounting, Performance Evaluation, and Transfer Pricing

Strategic Cost Management

Activity-Based Management

The Balanced Scorecard: Strategic-Based Control

Quality and Environmental Cost Management

Lean Accounting and Productivity Measurement

Cost-Volume-Profit Analysis

Activity Resource Usage Model and Tactical Decision Making

Pricing and Profitability Analysis

Capital Investment

Filters