Deck 12: The Production Cycle

Question 1

The document that authorizes the removal of the necessary quantity of raw materials from storeroom to factory is referred to as

A)a bill of materials.
B)a production order.
C)a materials requisition.
D)a move ticket.

Answer 1

C

Question 2

The second step in the production cycle is planning and scheduling.One of the methods of production planning is referred to as pull manufacturing.This method is also known as

A)manufacturing resource planning (MRP).
B)just-in-time manufacturing system (JIT).
C)the economic order quantity (EOQ)system.
D)ahead-of-time production implementation (ATPI).

Answer 2

B

Question 3

The operations list shows

A)the labor and machine requirements.
B)the steps and operations in the production cycle.
C)the time expected to complete each step or operation.
D)all of the above

Answer 3

D

Question 4

The production planning department develops the master production schedule based on information from several sources.What information is necessary to create this schedule?

A)engineering department specifications and inventory levels
B)engineering department specifications and sales forecasts
C)special orders information and engineering department specifications
D)sales forecasts,special orders information,and inventory levels

Question 5

The basic activities in the production cycle are

A)product design and production operations.
B)planning,scheduling,and cost accounting.
C)raw materials requisitioning,planning,and scheduling.
D)Both A and B are correct.

Question 6

Information found on the materials requisition form is based in part on information obtained from which other form?

A)a bill of materials.
B)a move ticket.
C)a production order.
D)a picking list.

Question 7

What document authorizes the manufacturing of a product?

A)master production schedule
B)materials requisition
C)move ticket
D)production order

Question 8

The list which specifies the labor and machine requirements needed to manufacture a product is called the

A)bill of materials.
B)bill of lading.
C)master production schedule.
D)operations list.

Question 9

A master production schedule is used to

A)develop detailed timetables of daily production and determine raw material purchasing.
B)develop detailed reports on daily production and material usage.
C)develop daily direct labor needs.
D)develop detailed inventory charts.

Question 10

The form in the production cycle that specifies how much of each product is to be produced during the planning period and when product should begin is the

A)bill of materials.
B)bill of lading.
C)master production schedule.
D)operations list.

Question 11

Whether a company uses an AIS,ERP,or incorporates some degree of CIM into its production process,it still needs to collect data about four basic facets of its production operations.The facet that impacts the company's human resource cycle the most is

A)the amount of raw material used in a production order.
B)the labor hours expended to complete a production order.
C)the machine operations performed during a production order.
D)the tracking of manufacturing overhead costs incurred for a production order.

Question 12

The first step in the production cycle is product design.There are several objectives connected with this step.Which objective below is not a product design objective?

A)to design a product that meets customer requirements
B)to design a quality product
C)to minimize production costs
D)to make the design easy to track for cost accounting purposes

Question 13

MRP-II and JIT manufacturing systems both plan production in advance.What is the main difference between these two systems?

A)the length of the planning horizon
B)JIT uses long-term customer demand for planning purposes
C)MRP-II relies on EDI
D)There are no differences between the two systems.

Question 14

A __________ is used to document the subsequent relocation of materials through the factory for manufacturing in process.

A)master production schedule
B)materials requisition
C)move ticket
D)production order

Question 15

An integral part of the production process is the use of raw materials.One way to enable an AIS to efficiently track and process information about raw materials used in production is to implement __________.

A)a just-in-time inventory system
B)bar coding
C)a materials resources planning inventory system
D)job-order costing

Question 16

A __________ authorizes the transfer of raw goods needed for production from the storeroom to the production facilities.

A)master production schedule
B)materials requisition
C)move ticket
D)production order

Question 17

An AIS should be designed to provide timely and accurate information about production cycle activities that impact the other business cycles.One type of information deals with planning and controlling manufacturing costs and evaluating performance.This type of information is called

A)product mix.
B)product pricing.
C)resource allocation.
D)cost management.

Question 18

The second step in the production cycle is planning and scheduling.One of the methods of production planning is referred to as push manufacturing.This method is also known as

A)manufacturing resource planning (MRP).
B)just-in-time manufacturing system (JIT).
C)the economic order quantity (EOQ)system.
D)ahead-of-time production implementation (ATPI).

Question 19

The AIS compiles and feeds information among the business cycles.What is the relationship between the revenue and production cycles regarding the exchange of information?

A)The revenue cycle provides sales forecast and customer order information to the production cycle,but the production cycle sends information back to revenue about finished goods production.
B)The revenue cycle receives information from the production cycle about raw materials needs.
C)The production cycle sends cost of goods manufactured information back to the revenue cycle.
D)The production cycle does not exchange information with the revenue cycle.

Question 20

The bill of materials shows the __________ of each product component.

A)part number and description
B)quantity used
C)quantity ordered
D)both A and B

Question 21

Inaccurate recording and processing of production activities can diminish the overall effectiveness of production operations.One of the application controls that can help to ensure accounting records are accurate is to restrict the rights of authorized users only to the portion of the database needed to complete job duties.What specific control can help achieve this objective?

A)an access control matrix
B)passwords and user IDs
C)closed-loop verification
D)bar-code scanners

Question 22

The general threat of the loss of production data can greatly slow or halt production activity within an organization.To counteract such a major threat,which of the following organization controls should be implemented and maintained?

A)store key master inventory and production order files on-site only to prevent their theft
B)back up data files only after a production run has been physically completed
C)access controls should apply to all terminals within the organization
D)allow access to inventory records from any terminal within the organization to provide efficient data entry

Question 23

The use of various forms of information technology in the production process is referred to as

A)computerized investments and machines.
B)computerized integration of machines.
C)computer-integrated manufacturing.
D)computer intense manufacturing.

Question 24

Job-time tickets are used to

A)specify each production task.
B)collect the time spent by a worker on a specific task.
C)allocate machine costs.
D)All of the above are correct.

Question 25

For replacement of inventories and assets destroyed by fire or other disasters,an organization needs

A)stand-by facilities.
B)adequate insurance coverage.
C)source data automation.
D)All of the above are correct.

Question 26

There are four basic activities in the production cycle.The step that may incorporate robots and computer-controlled machinery to achieve its goals is

A)product design.
B)planning and scheduling.
C)production operations.
D)cost accounting.

Question 27

Which of the following is not a type of cost accounting system?

A)activity-based costing
B)just-in-time costing
C)job order costing
D)process costing

Question 28

Which type of information below should not be maintained by the AIS in accounting for fixed assets?

A)identification/serial number
B)cost
C)improvements
D)market value

Question 29

The best control procedure for accurate data entry is

A)the use of on-line terminals.
B)an access control matrix.
C)passwords and user IDs.
D)the automation of data collection.

Question 30

Detailed data about warranty and repair costs is considered an applicable control used to mitigate the threat of

A)underproduction.
B)overproduction.
C)poor product design.
D)suboptimal investment of fixed assets.

Question 31

The threat of loss of data exposes the company to

A)the loss of assets.
B)ineffective decision making.
C)inefficient manufacturing.
D)All of the above are correct.

Question 32

Direct labor must be tracked and accounted for as part of the production process.Traditionally,direct labor was tracked using __________ but an AIS enhancement is to use __________ to record and track direct labor costs.

A)job-time tickets; coded identification cards
B)move tickets; coded identification cards
C)employee earnings records; job-time tickets
D)time cards; electronic time entry terminals

Question 33

A company's production process may incorporate various forms of information technology such as robots and computer-controlled machinery.One effect of using such a process is a shift from mass production to custom order manufacturing.This process is called

A)ERP.
B)CRM.
C)AIS.
D)CIM.

Question 34

To curtail the threat of theft or destruction of inventories and other fixed assets,the organization may wish to implement which of the following controls?

A)review and approval of fixed asset acquisitions
B)improved and timelier reporting
C)better production and planning systems
D)document all movement of inventory through the production process

Question 35

Manufacturing overhead consists of all manufacturing costs that are not economically feasible to trace directly to specific jobs or processes.Which of the costs below would not be considered an overhead cost?

A)utilities
B)rent
C)earnings of factory production employees
D)salaries of factory production supervisors

Question 36

Overproduction or underproduction can be a threat to an organization.To which process or activity does this threat relate?

A)product design
B)planning and scheduling
C)production operations
D)cost accounting

Question 37

The type of cost accounting system that primarily assigns costs to specific batches,or jobs,and is used where production items can be discretely identified is known as __________ cost accounting.

A)just-in-time
B)process
C)job-order
D)manufacturing resources

Question 38

The final step in the production cycle is the cost accounting function.There are several principal objectives of the cost accounting system.Which objective listed below is not a principal cost accounting objective?

A)to provide information for planning,controlling,and evaluating the performance of production operations
B)to provide cost data about products used in pricing and product mix decisions
C)to collect and process the information used to calculate inventory and cost of goods sold amounts that appear in the financial statements
D)to provide tests of audit control functions as part of the AIS

Question 39

Factory supervisory costs would be assigned to departments for

A)product-mix decisions.
B)pricing decisions.
C)performance evaluation purposes.
D)All of the above are correct.

Question 40

The accountant's role in the __________ step of production cycle activities is to understand how CIM affects the AIS.

A)production operations
B)product design
C)planning and scheduling
D)cost accounting methods

Question 41

__________ represent testing to identify defective units before they are ready for sale.

A)External failure costs
B)Inspection costs
C)Internal failure costs
D)Prevention costs

Question 42

Quality control problems and inefficiencies in production operations will most likely result in increased expenses.The AIS can produce a measure of throughput to quantify and measure the number of "good" units produced in a time period.What does the first term in the throughput formula,productive capacity,represent?

A)the maximum number of units that can be produced given current technology
B)the percentage of total production time used to manufacture a product
C)the percentage of "good" units produced given current technology
D)the percentage of "bad" units produced given current technology

Question 43

__________ links costs to the corporation's strategy for production of goods and services.

A)Activity-based costing
B)Job-order costing
C)Process costing
D)Manufacturing costing

Question 44

Throughput is a measure of

A)production yield.
B)production effectiveness.
C)production capacity.
D)production quality.

Question 45

Wee Bee Trucking determines the cost per delivery by identifying variables as cost drivers and allocating overhead accordingly.This is an example of _______ costing.

A)job-order
B)unit-based
C)activity-based
D)process

Question 46

Dolly Salem owns and operates a bakery in Charleston,South Carolina.Each afternoon she prepares a shopping list that describes the number and variety of ingredients that she will purchase in the evening from a local food wholesaler.This list is an example of a(an)

A)bill of materials.
B)operations list.
C)production order.
D)materials requisition.
E)move ticket.

Question 47

Activity-based costing (ABC)can refine and improve cost allocations using either job-order or process cost systems.There are three significant differences between ABC and traditional cost accounting approaches.One difference between the two systems is how clearly the results of management activities are measured on overall profitability.This benefit is better known as

A)batch related overhead.
B)improved cost management.
C)product related overhead.
D)improved cost drivers.

Question 48

Wee Bee Trucking determines the cost per delivery by averaging total cost over number of deliveries.This is an example of _______ costing.

A)job-order
B)unit-based
C)activity-based
D)process

Question 49

Dolly Salem owns and operates a bakery in Charleston,South Carolina.She maintains a file that lists the sequence of procedures required to make each of her famous cakes and cookies.These instructions are examples of a(an)

A)bill of materials.
B)operations list.
C)production order.
D)materials requisition.
E)move ticket.

Question 50

There are various costs associated with quality control,or its absence in a production operation.Such information can help a company determine the effects of actions taken to improve production and identify areas of improvement.The cost of a product liability claim can be classified as a(n)

A)prevention cost.
B)inspection cost.
C)internal failure cost.
D)external failure cost.

Question 51

Activity-based costing (ABC)can refine and improve cost allocations using either job-order or process cost systems.There are three significant differences between ABC and traditional cost accounting approaches.An ABC system attempts to identify anything that has a cause-and-effect relationship on costs.This cause-and-effect relationship is known as a

A)cost stimulator.
B)overhead stimulator.
C)cost driver.
D)cost catalyst.

Question 52

__________ are associated with testing to ensure that products meet quality standards.

A)External failure costs
B)Inspection costs
C)Internal failure costs
D)Prevention costs

Question 53

What may be perceived as a drawback of using an activity-based costing (ABC)system?

A)The ABC system may provide more accurate data results.
B)The ABC system may help to establish a better product mix.
C)The ABC system may improve management's ability to control total costs.
D)The ABC may cost more to run and be more complex in nature.

Question 54

There are several criticisms of traditional cost accounting systems.One criticism is that the traditional cost system uses a volume-driven base,such as direct labor or machine hours,to apply overhead to products.What is the drawback to the use of such a measurement in a traditional cost accounting system?

A)The cost accountant may not fully understand how to track direct labor or machine hours.
B)It is difficult for an AIS to incorporate such a measurement into its system.
C)It is difficult for an ERP to incorporate such a measurement into its integrated system.
D)Many overhead costs are incorrectly allocated to products since they do not vary with production volume.

Question 55

In activity-based costing,expenses associated with the purchase of health care insurance for employees are _______ overhead.

A)batch-related
B)product-related
C)companywide
D)expenditure-based

Question 56

Dolly Salem owns and operates a bakery in Charleston,South Carolina.Each morning she prepares a list that describes the number and variety of cakes and cookies that will be prepared during the day.This list is an example of a(an)

A)bill of materials.
B)operations list.
C)production order.
D)materials requisition.
E)move ticket.

Question 57

__________ are incurred to ensure that products are created without defects the first time.

A)External failure costs
B)Inspection costs
C)Internal failure costs
D)Prevention costs

Question 58

In activity-based costing,the expenses associated with research and development are _______ overhead.

A)batch-related
B)product-related
C)companywide
D)expenditure-based

Question 59

Dolly Salem owns and operates a bakery in Charleston,South Carolina.She maintains a file of recipes that list the ingredients used to make her famous cakes and cookies.These recipes are examples of a(an)

A)bill of materials.
B)operations list.
C)production order.
D)materials requisition.
E)move ticket.

Question 60

Wee Bee Trucking determines the cost per delivery by summing the average cost of loading,unloading,transporting,and maintenance.This is an example of _______ costing.

A)job-order
B)unit-based
C)activity-based
D)process

Question 61

At the end of each production run,preventive maintenance is done on the assembly line.The expenses associated with this maintenance are _______ overhead.

A)batch-related
B)product-related
C)companywide
D)expenditure-based

Question 62

Labor productivity is measured by the average product of labor; i.e.,the quantity produced divided by the labor time required to produce it.All other things held constant,an increase in labor productivity will increase throughput by

A)increasing productive capacity.
B)increasing productive processing time.
C)increasing yield.
D)increasing all components of throughput.

Question 63

Folding Squid Technologies initiated a just-in-time inventory system in 2007.Now the production manager,Chan Ziaou,wants to apply the same principles to the entire production process.His recommendation is the firm adopt a

A)lean manufacturing system.
B)master production scheduling system.
C)manufacturing resource planning system.
D)computer-integrated manufacturing system.

Question 64

What types of data are accumulated by cost accounting? What is the accountant's role in this phase?

Question 65

What is a master production schedule (MPS)?

Question 66

What is the production cycle.

Question 67

What are the basic activities in a production cycle?

Question 68

What role does the AIS play in the production cycle?

Question 69

Folding Squid Technologies has installed a new production monitoring system that is expected to reduce system breakdowns by 28%.This system will increase throughput by

A)increasing productive capacity.
B)increasing productive processing time.
C)increasing yield.
D)increasing all components of throughput.

Question 70

What is CIM?

Question 71

Clint Smith operates a machine shop in Burbank,California.He places bids on small lot production projects submitted by firms throughout the Los Angeles area.Which of the following is most likely to be a cost driver for the allocation of utility costs?

A)Number of units produced
B)Number of labor hours
C)Number of projects completed
D)Sales revenue

Question 72

The expenses associated with a product recall are ______ costs.

A)prevention
B)inspection
C)internal failure
D)external failure

Question 73

The expenses associated with quality assurance activities are ______ costs.

A)prevention
B)inspection
C)internal failure
D)external failure

Question 74

The expenses associated with disposal of defective products are ______ costs.

A)prevention
B)inspection
C)internal failure
D)external failure

Question 75

Identify and discuss the two documents that are the result of product design activities.

Question 76

Explain the difference between job-order and process costing.

Question 77

Define the following: production order,materials requisition,and move ticket.

Question 78

The expenses associated with the use of clean rooms in the production of computer hard drives are ______ costs.

A)prevention
B)inspection
C)internal failure
D)external failure

Question 79

Which of the following is not a benefit of activity-based costing?

A)Lower cost
B)Better decisions
C)Improved cost management
D)Identification of cost drivers

Question 80

In addition to identifying and dealing with defective products before they reach customers,quality management is concerned with initiating process changes that will reduce the number of defective units produced.All other things held constant,a decrease in the number of defective units will increase throughput by

A)increasing productive capacity.
B)increasing productive processing time.
C)increasing yield.
D)increasing all components of throughput.