Question 1

In a just-in-time (JIT)environment,the optimal situation is to have only one vendor for any given item.

Accepted Answer

A) True 
 B)False

Question 2

Kaizen costing helps to

Accepted Answer

A) reduce product costs of products in the design and development stage. 
B) keep the target cost as the primary focus after a product enters production. 
C) keep profit margin relatively stable as product price declines over the product life cycle. 
D) reduce the cost of engineering change orders during each stage of the product life cycle. 
A) reduce product costs of products in the design and development stage. 
B) keep the target cost as the primary focus after a product enters production. 
C) keep profit margin relatively stable as product price declines over the product life cycle. 
D) reduce the cost of engineering change orders during each stage of the product life cycle.

Question 3

Projected sales price minus a reasonable profit equals

Accepted Answer

A) the standard cost. 
B) contribution margin. 
C) projected Cost of Goods Sold. 
D) target cost. 
A) the standard cost. 
B) contribution margin. 
C) projected Cost of Goods Sold. 
D) target cost.

Question 4

The economic order quantity is not affected by the

Accepted Answer

A) estimate of the annual material consumption. 
B) cost of insuring a unit of inventory for a year. 
C) cost of purchase-order forms. 
D) safety stock level. 
A) estimate of the annual material consumption. 
B) cost of insuring a unit of inventory for a year. 
C) cost of purchase-order forms. 
D) safety stock level.

Question 5

With JIT manufacturing,which of the following costs would be considered a direct product cost?

Accepted Answer

A) insurance on the plant 
B) utilities used for manufacturing 
C) janitors' salaries 
D) salary of the plant supervisor 
A) insurance on the plant 
B) utilities used for manufacturing 
C) janitors' salaries 
D) salary of the plant supervisor

Question 6

Successful product development should include

Accepted Answer

A) kaizen costing. 
B) value engineering. 
C) kanban implementation. 
D) all of the above. 
A) kaizen costing. 
B) value engineering. 
C) kanban implementation. 
D) all of the above.

Question 7

Crosson Corporation
Crosson Corporation operates its factory 300 days per year.Its annual consumption of Material Y is 1,200,000 gallons.It carries a 10,000 gallon safety stock of Material Y and its lead time is 12 business days.
Refer to Crosson Corporation.If the EOQ for Material Y is 30,000 gallons,and the carrying cost per gallon per year is $.25,what is the total annual carrying cost for Material Y?

Accepted Answer

A) $3,750 
B) $7,500 
C) $6,250 
D) $10,000 
A) $3,750 
B) $7,500 
C) $6,250 
D) $10,000

Question 8

Buxton Corporation produces lawn chairs.In order to produce the frames for the furniture,special equipment must be set up.The setup cost per frame is $50.The cost of carrying frames in inventory is $4 per frame per year.The company produces 10,000 lawn chairs per year.
1.Compute the number of frames that should be produced per setup in order to minimize total setup and carrying costs.
2.Compute the total setup and carrying costs associated with the economic order quantity?

Accepted Answer

@#LAT-DLM& 
EOQ = 500 frames should be p

Question 9

The role of safety stock in an organization is to

Accepted Answer

A) reduce the lead time for an order to be received. 
B) reduce the probability of a stockout. 
C) reduce the order point. 
D) decrease the economic order quantity. 
A) reduce the lead time for an order to be received. 
B) reduce the probability of a stockout. 
C) reduce the order point. 
D) decrease the economic order quantity.

Question 10

Quality inspection points should

Accepted Answer

A) precede bottlenecks. 
B) follow bottlenecks. 
C) be placed at the end of all production processes. 
D) be placed at random points in the manufacturing process. 
A) precede bottlenecks. 
B) follow bottlenecks. 
C) be placed at the end of all production processes. 
D) be placed at random points in the manufacturing process.

Question 11

Kanban is the Japanese word for

Accepted Answer

A) production. 
B) just-in-time. 
C) card. 
D) target costing. 
A) production. 
B) just-in-time. 
C) card. 
D) target costing.

Question 12

Just-in-time (JIT)inventory systems

Accepted Answer

A) result in a greater number of suppliers for each production process. 
B) focus on a "push" type of production system. 
C) can only be used with automated production processes. 
D) result in inventories being either greatly reduced or eliminateD. 
A) result in a greater number of suppliers for each production process. 
B) focus on a "push" type of production system. 
C) can only be used with automated production processes. 
D) result in inventories being either greatly reduced or eliminateD.

Question 13

Which of the following formulas is the best representation of the concept of target costing?

Accepted Answer

A) target cost + profit margin = selling price 
B) selling price - target cost = profit margin 
C) selling price - profit margin = target cost 
D) target cost - standard cost = profit margin 
A) target cost + profit margin = selling price 
B) selling price - target cost = profit margin 
C) selling price - profit margin = target cost 
D) target cost - standard cost = profit margin

Question 14

Flexible manufacturing systems are

Accepted Answer

A) designed to provide more flexibility in a firm's manufacturing process by using computer-aided machinery. 
B) the same as computer-aided design systems. 
C) commonly used by firms that need to make large quantities of one product. 
D) are very complicated and cause increased defect rates in output. 
A) designed to provide more flexibility in a firm's manufacturing process by using computer-aided machinery. 
B) the same as computer-aided design systems. 
C) commonly used by firms that need to make large quantities of one product. 
D) are very complicated and cause increased defect rates in output.

Question 15

A company annually consumes 10,000 units of Part C.The carrying cost of this part is $2 per year and the ordering costs are $100.The company uses an order quantity of 500 units.If the company operates 200 days per year,and the lead time for ordering Part C is 5 days,what is the order point?

Accepted Answer

A) 250 units 
B) 1,000 units 
C) 500 units 
D) 2,000 units 
A) 250 units 
B) 1,000 units 
C) 500 units 
D) 2,000 units

Question 16

A system of inventory production where goods are produced in anticipation of customer orders is referred to as a _________________________.

Accepted Answer

The answer of A system of inventory production where goods...

Question 17

Life-cycle costing is especially important in which of the following types of companies?
$\begin{array}{ll}
\underline{\text { Computers }} & \underline{\text {Furiniture} }& \underline{\text { Textbooks }} &\underline{\text { Automobiles } }
\end{array}$

Accepted Answer

A) yes yes yes yes 
B) no yes yes no 
C) yes no no yes 
D) yes no yes yes 
A) yes yes yes yes 
B) no yes yes no 
C) yes no no yes 
D) yes no yes yes

Question 18

If no safety stock is carried,the average inventory is equal to the

Accepted Answer

A) order point/2. 
B) order point ´ 2. 
C) economic order quantity/2. 
D) economic order quantity ´ 2. 
A) order point/2. 
B) order point ´ 2. 
C) economic order quantity/2. 
D) economic order quantity ´ 2.

Question 19

Product profit margins are typically judged on a

$\begin{array}{ll}
\underline{\text { Peniod-by-period basis }} & \underline{\text{Life-cycle basis} }
\end{array}$

Accepted Answer

A) yes yes 
B) yes no 
C) no yes 
D) no no 
A) yes yes 
B) yes no 
C) no yes 
D) no no

Question 20

Reducing setup time is a major aspect of

Accepted Answer

A) all push inventory systems. 
B) the determination of safety stock quantities. 
C) a JIT system. 
D) an EOQ system. 
A) all push inventory systems. 
B) the determination of safety stock quantities. 
C) a JIT system. 
D) an EOQ system.

In a just-in-time (JIT)environment,the optimal situation is to have only one vendor for any given item.

Kaizen costing helps to

Projected sales price minus a reasonable profit equals

The economic order quantity is not affected by the

With JIT manufacturing,which of the following costs would be considered a direct product cost?

Successful product development should include

The role of safety stock in an organization is to

Quality inspection points should

Kanban is the Japanese word for

Just-in-time (JIT)inventory systems

Which of the following formulas is the best representation of the concept of target costing?

Flexible manufacturing systems are

A company annually consumes 10,000 units of Part C.The carrying cost of this part is $2 per year and the ordering costs are $100.The company uses an order quantity of 500 units.If the company operates 200 days per year,and the lead time for ordering Part C is 5 days,what is the order point?

A system of inventory production where goods are produced in anticipation of customer orders is referred to as a _________________________.

Life-cycle costing is especially important in which of the following types of companies?

If no safety stock is carried,the average inventory is equal to the

Product profit margins are typically judged on a

Reducing setup time is a major aspect of

Introduction to Cost Accounting

Cost Terminology and Cost Behaviors

Predetermined Overhead Rates, Flexible Budgets, and Absorptionvariable Costing

Activity-Based Management and Activity-Based Costing

Job Order Costing

Process Costing

Standard Costing and Variance Analysis

The Master Budget

Break-Even Point and Cost-Volume-Profit Analysis

Relevant Information for Decision Making

Allocation of Joint Costs and Accounting for By-Products

Introduction to Cost Management Systems

Responsibility Accounting,support Department Allocations,and Transfer Pricing

Performance Measurement, balanced Scorecards, and Performance Rewards

Capital Budgeting

Managing Costs and Uncertainty

Implementing Quality Concepts

Emerging Management Practices

Filters

Exam 18: Inventory and Production Management

In a just-in-time (JIT)environment,the optimal situation is to have only one vendor for any given item.

Kaizen costing helps to

Projected sales price minus a reasonable profit equals

The economic order quantity is not affected by the

With JIT manufacturing,which of the following costs would be considered a direct product cost?

Successful product development should include

The role of safety stock in an organization is to

Quality inspection points should

Kanban is the Japanese word for

Just-in-time (JIT)inventory systems

Which of the following formulas is the best representation of the concept of target costing?

Flexible manufacturing systems are

A company annually consumes 10,000 units of Part C.The carrying cost of this part is $2 per year and the ordering costs are $100.The company uses an order quantity of 500 units.If the company operates 200 days per year,and the lead time for ordering Part C is 5 days,what is the order point?

A system of inventory production where goods are produced in anticipation of customer orders is referred to as a _________________________.

Life-cycle costing is especially important in which of the following types of companies?

If no safety stock is carried,the average inventory is equal to the

Product profit margins are typically judged on a

Reducing setup time is a major aspect of

Introduction to Cost Accounting

Cost Terminology and Cost Behaviors

Predetermined Overhead Rates, Flexible Budgets, and Absorptionvariable Costing

Activity-Based Management and Activity-Based Costing

Job Order Costing

Process Costing

Standard Costing and Variance Analysis

The Master Budget

Break-Even Point and Cost-Volume-Profit Analysis

Relevant Information for Decision Making

Allocation of Joint Costs and Accounting for By-Products

Introduction to Cost Management Systems

Responsibility Accounting,support Department Allocations,and Transfer Pricing

Performance Measurement, balanced Scorecards, and Performance Rewards

Capital Budgeting

Managing Costs and Uncertainty

Implementing Quality Concepts

Emerging Management Practices

Filters