Question 1

Which of the following is not an assumption underlying economic order quantity?

Accepted Answer

A)  Demand is known and constant. 
B)  The order is delivered as needed. 
C)  On average one-half of inventory is in stock at any one time. 
D)  Acquisition cost per unit is constant. 
A)  Demand is known and constant. 
B)  The order is delivered as needed. 
C)  On average one-half of inventory is in stock at any one time. 
D)  Acquisition cost per unit is constant.

Question 2

The Wonderlust Retail Company Ltd experiences relatively constant demand of 24 000 units per year for one of its products.The product,a coffee-making machine,costs the firm $30.Placing an order costs $200 and annual carrying costs are $2 per unit.The firm works 200 days per year and desires a safety stock of 300 units.The lead time for an order is 15 working days.The economic order quantity for Wonderlust is:

Accepted Answer

A)  1549 
B)  3098 
C)  2191 
D)  2221 
A)  1549 
B)  3098 
C)  2191 
D)  2221

Question 3

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 currently are using electronic commerce.

Accepted Answer

A) True 
 B)False

Question 4

Time-based management considers time and profitability as a main means for measuring performance.

Accepted Answer

A) True 
 B)False

Question 5

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 6

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 7

Which of the following costs should be included in customer profitability analysis?
i.Product costs
ii.Distribution
iii.Customer servicing
iv.Finished goods inspection costs

Accepted Answer

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

Question 8

Which of the following statements regarding backflush costing is false?

Accepted Answer

A)  Backflush costing is simpler and less expensive than conventional product costing. 
B)  Backflush costing provides more-detailed information than a job order costing system. 
C)  When using backflush costing,a cost-benefit decision needs to be made. 
D)  It is only likely to be used in an environment where production-related inventories are kept low. 
A)  Backflush costing is simpler and less expensive than conventional product costing. 
B)  Backflush costing provides more-detailed information than a job order costing system. 
C)  When using backflush costing,a cost-benefit decision needs to be made. 
D)  It is only likely to be used in an environment where production-related inventories are kept low.

Question 9

Firm A has the following information:
What is the economic order quantity for Firm A?

Accepted Answer

A)  2000 
B)  3000 
C)  1133 
D)  1414 
A)  2000 
B)  3000 
C)  1133 
D)  1414

Question 10

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 11

Which of the following activities does B2B include?
i.Purchasing and procurement
ii.Customer service
iii.Supplier management
iv.Inventory management

Accepted Answer

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

Question 12

The economic order quantity model:

Accepted Answer

A)  determines ordering costs 
B)  determines total costs involved in holding inventory 
C)  is a mathematical tool for determining the order quantity that minimises the costs of ordering and holding inventory 
D)  is a mathematical tool for determining shortage and ordering costs 
A)  determines ordering costs 
B)  determines total costs involved in holding inventory 
C)  is a mathematical tool for determining the order quantity that minimises the costs of ordering and holding inventory 
D)  is a mathematical tool for determining shortage and ordering costs

Question 13

A firm has the following stock and carrying costs:
The economic order quantity is:

Accepted Answer

A)  490 units 
B)  346 units 
C)  424 units 
D)  692 units 
A)  490 units 
B)  346 units 
C)  424 units 
D)  692 units

Question 14

Strategic alliances are informal arrangements between two or more suppliers and customers relating to the supply of raw materials.

Accepted Answer

A) True 
 B)False

Question 15

Select the best answer.Backflush costing is appropriate when:

Accepted Answer

A)  both just-in-time (JIT)and activity-based costing (AB
C) have been implemented 
B)  JIT purchasing has been implemented 
C)  both JIT production and JIT purchasing have been implemented 
D)  reduced set-up times have resulted from JIT's introduction 
A)  both just-in-time (JIT)and activity-based costing (AB
C) have been implemented 
B)  JIT purchasing has been implemented 
C)  both JIT production and JIT purchasing have been implemented 
D)  reduced set-up times have resulted from JIT's introduction

Question 16

The reorder point is calculated by:

Accepted Answer

A)  average usage × safety stock + lead time 
B)  average usage × safety stock × lead time 
C)  average usage × lead time + safety stock 
D)  safety stock × lead time + average usage 
A)  average usage × safety stock + lead time 
B)  average usage × safety stock × lead time 
C)  average usage × lead time + safety stock 
D)  safety stock × lead time + average usage

Question 17

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

Accepted Answer

A)  4 days 
B)  7 days 
C)  13 days 
D)  21 days 
A)  4 days 
B)  7 days 
C)  13 days 
D)  21 days

Question 18

Which of the following are examples of delivery costs?
i.Receiving
ii.Inwards inspection
iii.Opportunity cost

Accepted Answer

A)  i and ii 
B)  ii and iii 
C)  All of the given answers 
D)  None of the given answers 
A)  i and ii 
B)  ii and iii 
C)  All of the given answers 
D)  None of the given answers

Question 19

The economic order quantity is influenced by carrying costs,annual requirements and the costs to place an order.

Accepted Answer

A) True 
 B)False

Question 20

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 against 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 against 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.

Which of the following is not an assumption underlying economic order quantity?

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 currently are using electronic commerce.

Time-based management considers time and profitability as a main means for measuring performance.

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?

What types of businesses usually hold significant quantities of inventory?

Which of the following costs should be included in customer profitability analysis? i.Product costs ii.Distribution iii.Customer servicing iv.Finished goods inspection costs

Which of the following statements regarding backflush costing is false?

Firm A has the following information: What is the economic order quantity for Firm A?

The production lead time may be defined as:

Which of the following activities does B2B include? i.Purchasing and procurement ii.Customer service iii.Supplier management iv.Inventory management

The economic order quantity model:

A firm has the following stock and carrying costs: The economic order quantity is:

Strategic alliances are informal arrangements between two or more suppliers and customers relating to the supply of raw materials.

Select the best answer.Backflush costing is appropriate when:

The reorder point is calculated by:

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

Which of the following are examples of delivery costs? i.Receiving ii.Inwards inspection iii.Opportunity cost

The economic order quantity is influenced by carrying costs,annual requirements and the costs to place an order.

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

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

Filters

Exam 15: Managing Suppliers and Customers

Which of the following is not an assumption underlying economic order quantity?

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 currently are using electronic commerce.

Time-based management considers time and profitability as a main means for measuring performance.

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?

What types of businesses usually hold significant quantities of inventory?

Which of the following costs should be included in customer profitability analysis? i.Product costs ii.Distribution iii.Customer servicing iv.Finished goods inspection costs

Which of the following statements regarding backflush costing is false?

Firm A has the following information: What is the economic order quantity for Firm A?

The production lead time may be defined as:

Which of the following activities does B2B include? i.Purchasing and procurement ii.Customer service iii.Supplier management iv.Inventory management

The economic order quantity model:

A firm has the following stock and carrying costs: The economic order quantity is:

Strategic alliances are informal arrangements between two or more suppliers and customers relating to the supply of raw materials.

Select the best answer.Backflush costing is appropriate when:

The reorder point is calculated by:

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

Which of the following are examples of delivery costs? i.Receiving ii.Inwards inspection iii.Opportunity cost

The economic order quantity is influenced by carrying costs,annual requirements and the costs to place an order.

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

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

Filters