Question 1

A "push-through" system,often described as a materials requirement planning system,focuses first on the forecasted amount and timing of finished goods and then determines the demand for materials components and subassemblies at each of the prior stages of production.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following statements is true of lean accounting?

Accepted Answer

A) It is much complex than traditional product costing but produces more accurate product unit costs. 
B) It does not always compute costs for individual products but does emphasize product costs by value stream. 
C) It omits recording some of the journal entries relating to the stages from the purchase of direct materials to the sale of finished goods. 
D) It is acceptable under GAAP.

Question 3

Companies that have low manufacturing lead time usually find that a version of backflush costing will report cost numbers totally different to what a sequential costing approach would report.

Accepted Answer

A) True 
 B)False

Question 4

Beryl Company sells 900 flash drives per week.Purchase-order lead time is 2 weeks and the economic-order quantity is 1625 units.What is the reorder point?

Accepted Answer

A) 3250 units 
B) 1450 units 
C) 1800 units 
D) 1625 units

Question 5

Which of the following statements is true of just-in-time production systems?

Accepted Answer

A) In a just-in-time production system,a master production schedule specifies the quantity and timing of each item to be produced. 
B) Sales budget triggers each step of the production process in a just in time production system. 
C) Defects arising at one workstation affect other workstations in the line quickly because of the tight links between workstations. 
D) Production is organized in manufacturing cells in a just in time production system,which are production centers that use a "push-through" approach whereby finished goods are manufactured on the basis of demand forecasts.

Question 6

Corry Corporation manufactures filters for cars,vans,and trucks.A backflush costing system is used and standard costs for a filter are as follows:
  
Filters are scheduled for production only after orders are received,and are shipped immediately upon completion.This results in product costs being charged directly to cost of goods sold.In December,3,000 filters were produced and shipped.Materials were purchased at a cost of $8,450 and actual conversion costs of $13,650 were recorded.
Required:
Prepare journal entries to record December's costs for the production of the filters.

Accepted Answer

The answer of Corry Corporation manufactures filters for cars,vans,and trucks.A...

Question 7

The supply chain 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 company or in other companies.

Accepted Answer

A) True 
 B)False

Question 8

The Allianz Company produces a specialty wood furniture product,and has the following information available concerning its inventory items:

Annual demand is 33,000 packages per year.The purchase price per package is $50.
What are the total relevant costs,assuming the quantity ordered equals 1500 units?

Accepted Answer

A) $16,405 
B) $18,280 
C) $16,780 
D) $22,405

Question 9

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 $30.00 per DVD;DVDs are shipped in packages of 66.Globe pays all incoming freight,and DVD Mart does not inspect the DVDs due to Globe's reputation for high quality.Annual demand is 312,000 DVDs at a rate of 6500 DVDs per week.DVD Mart earns 10% on its cash investments.The purchase-order lead time is one week.The following cost data are available:

How many deliveries will be made during each time period?

Accepted Answer

A) 63.71 deliveries 
B) 39.89 deliveries 
C) 90.10 deliveries 
D) 62.84 deliveries

Question 10

Carrying costs only include those costs that are entered into the financial accounting system and do not include the opportunity cost of the investment tied up in inventory.

Accepted Answer

A) True 
 B)False

Question 11

A company's inventory levels are dependent on a number of variables including the demand for the product,supplier relationships,and supplier relationships with their manufacturers.

Accepted Answer

A) True 
 B)False

Question 12

In lean accounting environments,it is critical that work-in-process and finished goods accounting be accurate for accurate financial accounting and pricing decisions.

Accepted Answer

A) True 
 B)False

Question 13

To comply with GAAP,backflush cost numbers can be adjusted by recording a journal entry.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is a disadvantage of an enterprise resource planning (ERP)system?

Accepted Answer

A) The use of standard costing systems is not allowed in an ERP system. 
B) Shifting manufacturing and distribution plans rapidly in response to changes in supply and demand is not possible in an ERP system. 
C) The ERP systems must often be customized to fit the strategic needs of the user. 
D) The ERP system increases lead times when purchasing material from a different supplier.

Question 15

Successful implementation of a JIT production system and effective accomplishments of its goals should result in a decrease in the inventory turnover ratio and a decrease in the number of days of inventory on hand.

Accepted Answer

A) True 
 B)False

Question 16

Lean accounting is much simpler than traditional product costing.Why?

Accepted Answer

The answer of Lean accounting is much simpler than traditional...

Question 17

The annual relevant carrying costs of inventory consists of the sum of the ________.

Accepted Answer

A) relevant ordering costs and the relevant costs of quality 
B) relevant ordering costs plus the relevant opportunity costs of capital 
C) relevant incremental costs plus the relevant opportunity costs of capital 
D) relevant incremental costs plus the relevant ordering costs

Question 18

Traditional normal and standard costing systems usually use 4 trigger points to record the flow of costs through the production system.Such costing is called ________.

Accepted Answer

A) backflush costing 
B) delayed costing 
C) variable tracking 
D) sequential tracking

Question 19

If Kenton Inc.has a safety stock of 215 units and the average weekly demand is 35 units,how many days can be covered if the shipment from the supplier is delayed by 16 days?

Accepted Answer

A) 16 days 
B) 43 days 
C) 59 days 
D) 27 days

Question 20

The Allianz Company produces a specialty wood furniture product,and has the following information available concerning its inventory items:

Annual demand is 33,000 packages per year.The purchase price per package is $50.
What is the annual relevant carrying costs?

Accepted Answer

A) $16,308 
B) $13,702 
C) $10,491 
D) $2894

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

A "push-through" system,often described as a materials requirement planning system,focuses first on the forecasted amount and timing of finished goods and then determines the demand for materials components and subassemblies at each of the prior stages of production.

Which of the following statements is true of lean accounting?

Companies that have low manufacturing lead time usually find that a version of backflush costing will report cost numbers totally different to what a sequential costing approach would report.

Beryl Company sells 900 flash drives per week.Purchase-order lead time is 2 weeks and the economic-order quantity is 1625 units.What is the reorder point?

Which of the following statements is true of just-in-time production systems?

The supply chain 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 company or in other companies.

Carrying costs only include those costs that are entered into the financial accounting system and do not include the opportunity cost of the investment tied up in inventory.

A company's inventory levels are dependent on a number of variables including the demand for the product,supplier relationships,and supplier relationships with their manufacturers.

In lean accounting environments,it is critical that work-in-process and finished goods accounting be accurate for accurate financial accounting and pricing decisions.

To comply with GAAP,backflush cost numbers can be adjusted by recording a journal entry.

Which of the following is a disadvantage of an enterprise resource planning (ERP) system?

Successful implementation of a JIT production system and effective accomplishments of its goals should result in a decrease in the inventory turnover ratio and a decrease in the number of days of inventory on hand.

Lean accounting is much simpler than traditional product costing.Why?

The annual relevant carrying costs of inventory consists of the sum of the ________.

Traditional normal and standard costing systems usually use 4 trigger points to record the flow of costs through the production system.Such costing is called ________.

If Kenton Inc.has a safety stock of 215 units and the average weekly demand is 35 units,how many days can be covered if the shipment from the supplier is delayed by 16 days?

The Allianz Company produces a specialty wood furniture product,and has the following information available concerning its inventory items: Annual demand is 33,000 packages per year.The purchase price per package is $50. What is the annual relevant carrying costs?