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

The following information applies to Krynton Corp.which supplies microscopes to laboratories throughout the country.Krynton purchases the microscopes from a manufacturer which has a reputation for very high quality in its manufacturing operation. What is the economic order quantity assuming each order was made at the economic-order-quantity amount?

All inventory costs are available in financial accounting systems.

The Allianz Company produces a specialty wood furniture product,and has the following information available concerning its inventory items: Annual demand is 30,000 packages per year.The purchase price per package is $53. Which of the following statements is true of Allianz's EOQ system costs?

Just-in-Time (JIT)production systems are also referred to as lean production.

An order is received by a company and then spends 1 day in assembly and 3 days in finishing before being stored in the warehouse.On average,the units are stored for 3 days before being shipped to a customer.Which of the following measures would be true?

Which of the following statements is true of the economic-order-quantity decision model?

Kretzinger Company makes extensive use of financial performance reports for each of its departments.Although most departments have been reporting favorable cost variances with the company's current inventory system,management is concerned about the overall performance of the purchasing department.For example,the following information is for the purchasing of materials for a product the company has been manufacturing for several years: Required: a.Compute the inventory turnover for each year.Can any conclusions be drawn for a yearly comparison of the purchase price variance and the inventory turnover? b.Identify problems likely to be caused by evaluating purchasing only on the basis of the purchase price variance. c.What recommendations will improve the evaluation process?

Which of the following is the correct mathematical expression to calculate annual relevant ordering costs?

Purchasing costs arise in preparing and issuing purchase orders,receiving and inspecting the items included in the orders,and matching invoices received,purchase orders,and delivery records to make payments.

Which of the following statements best defines a trigger point in a sequential-tracking costing system?

Which of the following statements best defines manufacturing cells?

A costing system that omits recording some or all of the journal entries relating to the cycle from purchase of direct materials to the sale of finished goods is called ________.

Which of the following costs is a relevant inventory stockout cost?

Why do conflicts arise between the EOQ model's optimal order quantity and the order quantity that managers regard as optimal?

Companies use safety stock as a buffer against unexpected decreases in demand.

The following information applies to Krynton Corp.which supplies microscopes to laboratories throughout the country.Krynton purchases the microscopes from a manufacturer which has a reputation for very high quality in its manufacturing operation. What are the annual relevant ordering costs,assuming that relevant total costs are minimal?

Which of the following statements best defines manufacturing cycle time in a JIT production system?

Which of the following statements is true of the financial and nonfinancial measures in just-in-time production systems?

Managing inventories to increase net income requires companies to effectively manage costs associated with goods for sale. Required: Classify the below listed items as either Purchasing Costs,Ordering Costs,Carrying Costs,Stockout Costs,Costs of Quality,or Shrinkage Costs.

Which of the following statements is true of relevant inventory costs?