Question 1

A withdrawal kanban is used in conjunction with:

Accepted Answer

A)  activity-based costing. 
B)  facilitating quick and inexpensive set-ups of machines. 
C)  initiating production in a preceding production stage. 
D)  measuring the correlation between a cost driver and a cost pool. 
A)  activity-based costing. 
B)  facilitating quick and inexpensive set-ups of machines. 
C)  initiating production in a preceding production stage. 
D)  measuring the correlation between a cost driver and a cost pool.

Question 2

Nonsuch Ltd wishes to know the break-even point on its product, ADV, and provides the following data.  
What is the break-even point in years?

Accepted Answer

A)  3 
B)  4 
C)  5 
D)  6 
A)  3 
B)  4 
C)  5 
D)  6

Question 3

Time-based management is concerned with the elimination of idle time, which generates non-value-added costs in which of the following circumstances?

Accepted Answer

A)  The buildup of inventories 
B)  Loss of customers 
C)  Delay in sales revenue generation 
D)  All of the given answers 
A)  The buildup of inventories 
B)  Loss of customers 
C)  Delay in sales revenue generation 
D)  All of the given answers

Question 4

Which of the following are shortage costs?

Accepted Answer

A)  Cost of disrupted production 
B)  Lost sales resulting in unsatisfied customers 
C)  Loss of quantity discounts on purchases. 
D)  All of the given answers 
A)  Cost of disrupted production 
B)  Lost sales resulting in unsatisfied customers 
C)  Loss of quantity discounts on purchases. 
D)  All of the given answers

Question 5

GoGo Furniture has collected the following customer-related information:  
The total market level cost is:

Accepted Answer

A)  $8500 
B)  $17 000 
C)  $21 500 
D)  $27 000 
A)  $8500 
B)  $17 000 
C)  $21 500 
D)  $27 000

Question 6

Specialty Manufacturing requires 5400 gadgets per year for production. The firm decides to order 120 gadgets at a time. The costs of ordering are $50 per order and carrying costs per gadget are $2. The annual cost of the inventory policy is:

Accepted Answer

A)  $2370. 
B)  $1365. 
C)  $1584. 
D)  $2490. 
A)  $2370. 
B)  $1365. 
C)  $1584. 
D)  $2490.

Question 7

The production lead time may be defined as:

Accepted Answer

A)  the duration of the production process. 
B)  time between receipt of order and when production commences. 
C)  time between receipt of order and completion of manufacture. 
D)  time between when the order is received by production and the goods being ready for delivery. 
A)  the duration of the production process. 
B)  time between receipt of order and when production commences. 
C)  time between receipt of order and completion of manufacture. 
D)  time between when the order is received by production and the goods being ready for delivery.

Question 8

Which of the following is an appropriate way to analyse customer profitability?

Accepted Answer

A)  The cost of servicing a customer calculated as a percentage of the customer's gross margin. 
B)  The cost of servicing a customer as a percentage compared to company or industry norms. 
C)  The cost of servicing a customer calculated as a percentage of the customer's gross margin, examined over several years. 
D)  All of the given answers 
A)  The cost of servicing a customer calculated as a percentage of the customer's gross margin. 
B)  The cost of servicing a customer as a percentage compared to company or industry norms. 
C)  The cost of servicing a customer calculated as a percentage of the customer's gross margin, examined over several years. 
D)  All of the given answers

Question 9

Which of the following are customer costs at the market level?
i. Market research
ii. Regular sales calls
iii. Advertising campaigns
iv. Market development

Accepted Answer

A)  i, ii and iii 
B)  ii, iii and iv 
C)  i, iii and iv 
D)  All of the given answers 
A)  i, ii and iii 
B)  ii, iii and iv 
C)  i, iii and iv 
D)  All of the given answers

Question 10

The design of business processes and accounting systems have changed a lot over the past ten years due to the fact that so many businesses are now using electronic commerce.

Accepted Answer

A) True 
 B)False

Question 11

GoGo Furniture has collected the following customer-related information:  
The total customer level cost is:

Accepted Answer

A)  $8500 
B)  $18 500 
C)  $30 500 
D)  $35 500 
A)  $8500 
B)  $18 500 
C)  $30 500 
D)  $35 500

Question 12

Which of the following statements about just-in-time purchasing, compared with traditional purchasing systems, is/are true?

Accepted Answer

A)  Quality control by the supplier is more crucial. 
B)  Adherence to delivery schedules by the suppliers is more crucial. 
C)  Vendors can be dropped or added quickly. 
D)  Quality control by the supplier is more crucial AND adherence to delivery schedules by the suppliers is more crucial. 
A)  Quality control by the supplier is more crucial. 
B)  Adherence to delivery schedules by the suppliers is more crucial. 
C)  Vendors can be dropped or added quickly. 
D)  Quality control by the supplier is more crucial AND adherence to delivery schedules by the suppliers is more crucial.

Question 13

What types of businesses usually hold significant quantities of inventory?

Accepted Answer

A)  Manufacturing and wholesale 
B)  Wholesale and retail 
C)  Manufacturing, wholesale and retail 
D)  Retail, manufacturing and service 
A)  Manufacturing and wholesale 
B)  Wholesale and retail 
C)  Manufacturing, wholesale and retail 
D)  Retail, manufacturing and service

Question 14

Doron Ltd has just computed the supplier performance index (SPI) of the company's two suppliers, Xema and Zetta. Xema's SPI is 2.11 and Zetta's SPI is 0.99. Which of the following statements is correct?

Accepted Answer

A)  Xema is a preferred supplier because it has a higher SPI than Zetta. 
B)  Xema is a preferred supplier because its SPI is greater than 1.0. 
C)  Both suppliers are considered poor quality suppliers, because their SPI is higher than 0.50. 
D)  The SPI indices suggest that for every $1 purchase price, Doron has to incur $2.11 supplier activity costs for Xema and $0.99 activity costs for Zetta. 
A)  Xema is a preferred supplier because it has a higher SPI than Zetta. 
B)  Xema is a preferred supplier because its SPI is greater than 1.0. 
C)  Both suppliers are considered poor quality suppliers, because their SPI is higher than 0.50. 
D)  The SPI indices suggest that for every $1 purchase price, Doron has to incur $2.11 supplier activity costs for Xema and $0.99 activity costs for Zetta.

Question 15

James Bond Pty Ltd uses 960 tonnes of a particular chemical each year. Monthly usage fluctuates between 70 tonnes and 90 tonnes. The lead time for each order is six weeks and the economic order quantity is 160 tonnes. The safety stock for Bond's chemical would be:

Accepted Answer

A)  10 tonnes. 
B)  20 tonnes. 
C)  30 tonnes. 
D)  None of the given answers 
A)  10 tonnes. 
B)  20 tonnes. 
C)  30 tonnes. 
D)  None of the given answers

Question 16

Which of the following are examples of inventory holding costs?
i. Inwards inspection
ii. Rental
iii. Opportunity cost
iv. Insurance

Accepted Answer

A)  i, ii and iii 
B)  ii, iii and iv 
C)  i, ii and iv 
D)  i, iii and iv 
A)  i, ii and iii 
B)  ii, iii and iv 
C)  i, ii and iv 
D)  i, iii and iv

Question 17

Which of the following can have a negative impact on a customer's profitability?

Accepted Answer

A)  Number of required sales contacts (phone calls, visits etc.) 
B)  Accounts receivable collection time 
C)  Purchase order amendments 
D)  All of the given answers 
A)  Number of required sales contacts (phone calls, visits etc.) 
B)  Accounts receivable collection time 
C)  Purchase order amendments 
D)  All of the given answers

Question 18

Which of the following set of measures are appropriate in monitoring 'customer retention'?

Accepted Answer

A)  Proportion of sales from existing customers, number of repeat purchases, sales growth from customers using loyalty cards 
B)  Customer satisfaction rating, number of repeat purchases, customer acquisition costs 
C)  Customer satisfaction rating, sales growth from customers using loyalty cards, customer profitability per quarter 
D)  Proportion of sales from existing customers, market share, profit attributable to customers in the 21-30 age group 
A)  Proportion of sales from existing customers, number of repeat purchases, sales growth from customers using loyalty cards 
B)  Customer satisfaction rating, number of repeat purchases, customer acquisition costs 
C)  Customer satisfaction rating, sales growth from customers using loyalty cards, customer profitability per quarter 
D)  Proportion of sales from existing customers, market share, profit attributable to customers in the 21-30 age group

Question 19

What kind of costs are transportation and receiving costs?

Accepted Answer

A)  Ordering costs 
B)  Shortage costs 
C)  Carrying costs 
D)  Production costs 
A)  Ordering costs 
B)  Shortage costs 
C)  Carrying costs 
D)  Production costs

Question 20

The following dates apply to a specific order processed by Hamilton Ltd:  
What is the waiting time?

Accepted Answer

A)  4 days 
B)  7 days 
C)  10 days 
D)  13 days 
A)  4 days 
B)  7 days 
C)  10 days 
D)  13 days

Exam 15: Managing Suppliers and Customers

A withdrawal kanban is used in conjunction with:

Nonsuch Ltd wishes to know the break-even point on its product, ADV, and provides the following data. What is the break-even point in years?

Time-based management is concerned with the elimination of idle time, which generates non-value-added costs in which of the following circumstances?

Which of the following are shortage costs?

GoGo Furniture has collected the following customer-related information: The total market level cost is:

Specialty Manufacturing requires 5400 gadgets per year for production. The firm decides to order 120 gadgets at a time. The costs of ordering are $50 per order and carrying costs per gadget are $2. The annual cost of the inventory policy is:

The production lead time may be defined as:

Which of the following is an appropriate way to analyse customer profitability?

Which of the following are customer costs at the market level? i. Market research ii. Regular sales calls iii. Advertising campaigns iv. Market development

The design of business processes and accounting systems have changed a lot over the past ten years due to the fact that so many businesses are now using electronic commerce.

GoGo Furniture has collected the following customer-related information: The total customer level cost is:

Which of the following statements about just-in-time purchasing, compared with traditional purchasing systems, is/are true?

What types of businesses usually hold significant quantities of inventory?

Doron Ltd has just computed the supplier performance index (SPI) of the company's two suppliers, Xema and Zetta. Xema's SPI is 2.11 and Zetta's SPI is 0.99. Which of the following statements is correct?

James Bond Pty Ltd uses 960 tonnes of a particular chemical each year. Monthly usage fluctuates between 70 tonnes and 90 tonnes. The lead time for each order is six weeks and the economic order quantity is 160 tonnes. The safety stock for Bond's chemical would be:

Which of the following are examples of inventory holding costs? i. Inwards inspection ii. Rental iii. Opportunity cost iv. Insurance

Which of the following can have a negative impact on a customer's profitability?

Which of the following set of measures are appropriate in monitoring 'customer retention'?

What kind of costs are transportation and receiving costs?

The following dates apply to a specific order processed by Hamilton Ltd: What is the waiting time?

Management Accounting: Information for Creating Value and Managing Resources

Management Accounting: Cost Terms and Concepts

Cost Behaviour, Cost Drivers and Cost Estimation

Product Costing Systems

Process Costing and Operation Costing

Service Costing

A Closer Look at Overhead Costs

Activity-Based Costing

Budgeting Systems

Standard Costs for Control: Direct Material and Direct Labour

Standard Costs for Control: Flexible Budgets and Manufacturing Overhead

Managing and Reporting Performance

Financial Performance Measures and Incentive Schemes

Strategic Performance Measurement Systems

Managing Costs and Quality

Sustainability and Management Accounting

Cost Volume Profit Analysis

Information for Decisions: Relevant Costs and Benefits

Pricing and Product Mix Decisions

Information for Capital Expenditure Decisions

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