1. Authorization to dispose of fixed assets
Accounting in a world-class manufacturing
should be issued by the user of the asset. F
2. Fixed Asset Systems must keep track of the
physical location of each asset to promote
accountability. T
3. Fixed asset accounting systems include cost
allocation and matching procedures that are not
part of routine expenditure systems. T
4. Inventory control performs the formal record
keeping function for fixed assets. F
5. The fixed asset disposal report authorizes the
user department to dispose of a fixed asset. F
6. The depreciation schedule shows when
assets are fully depreciated. T
7. Asset maintenance involves only the
recording of depreciation charges. Physical
improvements are always expensed. F
8. The philosophy of customer satisfaction
permeates the world class firm. T
9. Reports generated by the cost accounting
system include performance reports and budget
reports. T
10. The cost accounting system authorizes the
release of raw materials into production. F
11. Batch processing creates a homogeneous
product through a continuous series of standard
procedures. F
12. The bill of materials specifies the types and
quantities of the raw materials and
subassemblies used in producing a single unit of
a finished product. T
13. A purchase requisition authorizes the store
keeper to release materials to individuals or
work centers in the production process. F
14. The work in process file is the subsidiary
ledger for the work in process control account.
T process or product. T
15. Move tickers authorize the store keeper to
release materials to work centers. F
16. Typically the only allocated cost in the value
stream is a charge per square foot for the value
stream production facility. T
17. Computer Integrated Manufacturing focuses
on reducing the complexity of the physical
manufacturing layout of the shop floor. F
18. The only objective of the Just-In-Time
philosophy is to reduce inventory levels. F
19.
environment emphasizes standard cost and
variance analysis. F
20. ABC assigns costs to objects used on their
use of activities. T
21. The complexities of ABC have caused many
firms to abandon this method in favor of a
simpler accounting model called value stream
accounting. T
22. A company's value stream includes all steps
in a process, both essential and non-essential,
for which the customer is willing to pay. F
23. Lean manufacturing evolved from the
Toyota Production System (TPS), which is based
on the just-in-time (JIT) production model. T
24. The two subsystems of a traditional
conversion cycle are the production system and
the delivery system. F
25. Manufacturing resources planning (MRP II)
has evolved into enterprise resource planning
(ERP). T
26. Pull processing involves pulling products
from the consumer end (demand), rather than
pushing them from the production end (supply).
T
27. The inventory control function updates and
maintains both raw and furnished goods
inventory subsidiary ledgers. T
28. An excess materials requisition is a control
that signals that a greater than standard
quantity of materials is being ordered from the
vendor. F
29. Cost accounting initiates a WIP account
upon receiving the first move ticket of a batch. F
30. A company's value stream map depicts only
the value added activities needed to complete a
31. The objective of the Economic Order
Quantity model is to reduce total inventory
costs by minimizing carry costs and ordering
costs. T
32. Move tickets authorize the storekeeper to
release materials to work centers. F
33. Computer Integrated Manufacturing focuses
on reducing the complexity of the physical
manufacturing layout of the shop floor. F
34. The two subsystems of a traditional
conversion cycle are the production system and
the delivery system. F
1. Which transaction is not processed in the
fixed asset system?
a. purchase of building
b. repair of equipment
c purchase of raw materials
d. sale of company van
2. Depreciation
a. is calculated by the department that uses the
fixed asset.
b allocates the cost of the asset over its useful
life.
c. is recorded weekly.
d. results in book value approximating fair
market value.
3. Depreciation records include all of the
following information about fixed assets EXCEPT
the
a economic benefit of purchasing the asset.
b. cost of the asset.
c. depreciation method being used.
d. location of the asset.
4. Which control is not a part of the fixed asset
system?
a. formal analysis of the purchase request
b. review of the assumptions used in the capital
budgeting model
c development of an economic order quantity
model
d. estimates of anticipated cost savings
5. Objectives of the fixed asset system do NOT
include
a. authorizing the acquisition of fixed assets.
b. recording depreciation expense.
c. computing gain and/or loss on the disposal of
fixed assets.
d maintaining a record of the fair market value
of all fixed assets.
6. Which of the following is NOT a characteristic
of the fixed asset system?
a acquisitions are routine transactions requiring
general authorization
b. retirements are reported on an authorized
disposal report form
c. acquisition cost is allocated over the expected
life of the asset
d. transfer of fixed assets among departments is
recorded in the fixed asset subsidiary ledger
7. Which of the following is not a reasonable
control for fixed assets?
a. Proper authorization is required for
acquisition and disposal of fixed assets.
b. Fixed asset records show the location of each
asset.
c Fully depreciated assets are immediately
disposed of.
d. Depreciation policies are in writing.
8. Which statement is true?
a. World-class companies must maintain
strategic agility and be able to turn on a dime.
b. World-class companies motivate and treat
employees like appreciating assets.
c. Manufacturing firms that achieve world-class
status do so by following a philosophy of lean
manufacturing
d All the above are true
9. Which function is not a part of the batch
production process?
a. Plan and control production
b Prepare purchase orders
c. Maintain inventory control
d. Perform cost accounting
10. Lead time times daily demand is
a. the economic order quantity
b. safety stock
c the reorder point
d. total inventory
11. Which process creates a homogeneous
product through a continuous series of standard
procedures?
a. batch process
b. make-to-order process
c continuous process
d. none of the above
12. An example of a continuous process is the
production of
a. wedding invitations
b milk products
c. jet aircraft
d. all of the above
13. All of the following are characteristics of
batch processing except
a. each item in the batch is similar
b batches are produced in accordance with
detailed customer specifications
c. batches are produced to replenish depleted
inventory levels
d. setting up and retooling is required for
different batches
14. When one of the following statements is
true?
a. ERP evolved directly from MRP.
b. ERP evolved into MRP and MRP evolved into
MRP II
c MRP II evolved from MRP and MRP II evolved
into ERP
d. None of the above is true.
15. The production schedule is
a. the expected demand for the firm's finished
goods for a given year
b the formal plan and authority to begin
production
c. a description of the type and quantity of raw
materials and subassemblies used to produce a
single unit of finished product
d. the sequence of operations during
manufacturing
16. A move ticket
a. is the formal plan and authority to begin
production
b. specifies the materials and production
required for each batch
c records the work done in each work center
d. authorizes the storekeeper to release
materials to work centers
17. The internal control significance of the
excess materials requisition is that it
a. indicates the amount of material released to
work centers
b identifies materials used in production that
exceed the standard amount allowed
c. indicates the standard quantities required for
production
d. documents the return to raw materials
inventory of unused production materials
18. Inventory control performs all of the
following tasks except it
a. provides production planning and control
with the inventory status report of finished
goods
b. updates the raw material inventory records
c prepares a materials requisition for each
production batch
d. records the completed production as an
increase to finished goods inventory
19. The storekeeper releases raw materials
based on the
a. production schedule
b materials requisition
c. work order
d. bill of materials
20. Which of the following is not an assumption
of the Economic Order Quantity model?
a. demand for the product is known with
certainty
b total cost per year of placing orders is fixed
c. lead time is known and is constant
d. there are no quantity discounts
21. Firms hold safety stock to compensate for
a. mathematical weaknesses of the Economic
Order Quantity model
b variations in lead time or daily demand
c. fluctuations in carrying costs
d. uncertainty in the estimation of ordering
costs
22. What is the economic order quantity if the
annual demand is 10,000 units, set up cost of
placing each order is $3 and the holding cost
per unit per year is $2?
a 174
b. 123
c. 245
d. 116
23. If the daily demand is 40 units and the lead
time is 12 days, the reorder point is
a. 40 units
b. 48 units
c 480 units
d. none of the above
24. Which statement is not correct?
a General ledger creates a new cost record
upon receipt of a work order from production
planning and control.
b. Cost accounting updates the cost record with
data gathered from the materials requisition.
c. General ledger posts summary information
about the manufacturing process based on a
journal voucher prepared by cost accounting.
d. Cost accounting computes variances and
applies overhead to individual cost records.
25. Which of the following is not a problem
associated with standard cost accounting?
a. Standard costing motivates management to
produce large batches of products and build
inventory.
b. Applying standard costing leads to product
cost distortions in a lean environment.
c. Standard cost data are associated with
excessive time lags that reduce its usefulness.
d. The financial orientation of standard costing
may promote bad decisions.
e All of the above are problems with standard
costing.
26. Computer integrated manufacturing
includes all of the following technologies except
a. Robotics
b materials requirements planning
c. automated storage and retrieval systems
d. computer aided design
27. Which of the following would not be
included as a value stream cost?
a. Labor costs of employees who simply
transport the product from cell to cell.
b. Labor costs of employees who design the
product.
c. A charge per square foot for the value stream
production facility including cost of rent and
building maintenance.
d All of the above are value stream costs
28. Which situation violates the segregation of
functions control procedure?
a. production planning and control is located
apart from the work centers
b inventory control maintains custody of
inventory items
c. cost accounting has custody of and makes
entries on cost records
d. work centers record direct labor on job
tickets
29. All of the following are internal control
procedures that should be in place in the
conversion cycle except
a. calculation and analysis of direct material and
direct labor variances
b retention of excess materials by work centers
c. physical count of inventory items on hand
d. limited access to raw material and finished
goods inventories
30. Which of the following is not true regarding
ABC?
a. ABC is too time-consuming and complicated
for practical applications over a sustained
period.
b. ABC identifies the most and least profitable
products and customers.
c ABC promotes the lean manufacturing
philosophies of process simplification and waste
elimination.
d. All of the statements are true.
31. A manufacturing process that is organized
into group technology cells utilizing no human
labor is called
a. islands of technology
b. process simplification
c computer integrated manufacturing
d. traditional manufacturing
32. An example of automation of manufacturing
design is
a Computer Aided Engineering
b. Automated Storage and Retrieval Systems
c. Computer Numerical Control
d. Robotics
33. An example of automation of manufacturing
planning is
a. Computer Aided Engineering
b. Automated Storage and Retrieval Systems
c Materials Requirements Planning
d. Computer Numerical Control
34. Which of the following is not true?
a. The complexities of ABC have caused many
firms to pursue value stream accounting.
b Value stream accounting captures costs
related to value added activities within a
specified department or activity.
c. An essential aspect in implementing value
stream accounting is defining the product
family.
d. Value stream accounting makes no
distinction between direct costs and indirect
costs.
35. Characteristics of lean manufacturing
include all of the following except
a push manufacturing
b. zero defects
c. reduced setup time and small lot sizes
d. reliable vendors
36. The cost of poor quality includes all of the
following except
a. cost of rework
b. warranty claims
c. scheduling delays
d proceeds from the sale of scrap
37. A flexible manufacturing system
a. creates bottlenecks in the process
b. leads to an "us" versus "them" attitude
among workers
c shortens the physical distance between
activities
d. is organized along functional lines
38. Deficiencies of the traditional cost
accounting information system include all of the
following except
a. an emphasis on financial performance
b. inaccurate cost allocations
c. an emphasis on standard costs
d immediate feedback about deviations from
the norm
39. Which statement is not correct?
a. cost objects are the reasons for performing
activities
b cost object describes the work performed in a
firm
c. activities cause costs
d. cost objects create a demand for activities
40. Firms are abandoning Activity Based Costing
(ABC) because
a. it does not facilitates the analysis of variances
b it is complex and time consuming
c. it does not recognize the importance of direct
labor as a component of total manufacturing
cost
d. the financial nature of the reports does not
permit comparisons to be made among
different types of products
41. Which of the following is not an example of
waste?
a. Overproduction of products.
b. Safety hazards that cause injury.
c. Stand-alone processes that are not linked to
upstream or downstream processes.
d All of the above are examples of waste.
42. Which of the following statements about
the EOQ inventory model assumptions is
incorrect?
a. Demand for the product is constant and
known with certainty.
b The lead time is a variable.
c. All inventories in the order arrive at the same
time.
d. Total ordering cost is a variable
43. Which statement is not correct?
a Inventories provide a competitive advantage.
b. Inventories can invite overproduction.
c. Inventories are expensive to maintain.
d. Inventories may conceal problems.
44. All of the following are documents in batch
process production systems except
a. production schedule
b. route sheet
c. materials requisition
d bill of manufacturing
45. Transaction authorization occurs in a
traditional manufacturing environment in all of
the following ways except
a. production planning and control initiates
production with a work order
b. movement of the work through the
production process follows the move ticket
c the sales department modifies work orders to
match changes in demand
d. the materials requisition authorizes the
storekeeper to release materials to the work
centers
46. Which of the following is not a principle of
lean manufacturing?
a Products are pushed from the production end
to the customer
b. All activities that do not add value and
maximize the use of scarce resources must be
eliminated
c. Achieve high inventory turnover rate.
d. A lean manufacturing firm must have
established and cooperative relationships with
vendors
e. All of the above are lean manufacturing
principles.
47. All of the following are problems with
traditional accounting information except:
a. Managers in a lean setting require immediate
information. d. Vendors
b. The measurement principle tends to ignore e. All of the above
standards other than money. 53. Which of the following sales and collection
c. Standard costing motivates nonlean behavior process activities can result in the creation of an
in operations. account receivable?
d. The overhead component in a manufacturing a. Receiving a sales order from a customer
company is usually very large. b Shipping ordered products to the customer
e All of the above are problems associated with c. Billing the customer
traditional accounting information. d. Recording payment from the customer
48. Firms implement a Just-In-Time inventory e. None of the above
approach to: 54. Which of the following methods for
a reduce investment in inventories determining inventory cost is not allowed by
b. determine the optimum inventory level using GAAP?
the EOQ model a. Average cost.
c. camouflage production problems b. FIFO.
d. ensure overproduction of inventory c. LIFO.
49. Which of the following is an activity in the d Standard cost.
conversion process? 55. Which cycle is not directly linked to the
a. Authorize Production production cycle?
b. Issue Raw Material a. Acquisition and expenditure cycle.
c. Perform Work b. Payroll cycle.
d. Transfer completed work to finished goods c. Revenue and collection cycle.
e All of the Above d Finance and investment cycle.
50. Which of the following is a business rule 56. To determine the client's planned amount
implementing access control for the conversion and timing of production of a product, the
process? auditor
a. Employee authorizing production cannot reviews the
modify inventory records a. Sales forecast.
b. System must provide control numbers b. Inventory reports.
c. Employee preparing quotes cannot modify c Production plan.
established prices d. Purchases journal.
d. System must create audit trail whenever 57. An auditor reviews job cost sheets to test
records are changed which transaction assertion?
e None of the above a. Occurrence.
51. Which of the following is not an activity b. Completeness.
within the sales and collection process? c Accuracy.
a. Selling products and services d. Classification.
b. Billing customers 58. Which of the following is an internal control
c. Managing inventory weakness for a company whose inventory of
d. Recording payments from customers supplies consists of a large number of individual
e. All of the above are sales and collection items?
activities. a. Supplies of relatively little value are expensed
52. The sales and collection process is the point when purchased.
of contact between the firm and which set of b. The cycle basis is used for physical inventory
external business partners? counts.
a. Investors c The warehouse manager is responsible for
b Customers maintenance of perpetual inventory records.
c. Employees
d. Perpetual inventory records are maintained B. The treatment of patients in a medical
only for items of significant value. facility.
59. To make a year-to-year comparison of C. Providing consulting services.
inventory turnover most meaningful, the D All of the above, A, B, and C, are considered
auditor performs the analysis productive activities.
a. For the company as a whole. 66. The process of logical, systematic flow of
b. By division. resources throughout the organization is
c By product. referred to as:
d. All of the above. A Logistics.
60. A company's conversion processes includes B. Planning.
all of the following except: C. Reporting.
A. Materials. D. Sales forecast.
B Office supplies. 67. The component of the logistics function that
C. Labor. directs the focus of operations is referred to as:
D. Overhead A. Logistics.
61. A company must have systems in place to B Planning.
accomplish all of the following except: C. Reporting.
A. Capture data. D. Sales forecast.
B Vocalize data. 68. The form that specifies the components of a
C. Record data. product, including descriptions and quantities of
D. Summarize data. materials and parts needed is the:
62. The conversion process is initiated when the A. Operations list.
company recognizes: B Bill of materials.
A. The receipt of raw materials. C. Engineering.
B. The shipment of finished goods to customers. D. Capital budgeting.
C The need to conduct operations. 69. The form that describes the chain of events
D. None of the above. that constitute a product's production is
63. Overhead includes all of the following referred to as the:
except: A Operations list.
A. Various other expenses necessary to run the B. Bill of materials.
operating facility. C. Engineering.
B The president's salary. D. Capital budgeting.
C. Indirect labor. 70. The process that plans the timing for
D. Indirect materials. production activities is referred to as:
64. The major activities within the conversion A. Operations list.
process include all but B. Bill of materials.
A Strategic planning that supports the C Scheduling.
company's operational goals. D. Capital budgeting.
B. Optimizing the use of the employees, 71. The form that authorizes production
property, and inventories that are needed in activities for a particular sales order or
operations. forecasted needs is referred to as the:
C. Controlling production flows, ensuring A. Production schedule.
product quality. B Production orders.
D. Preparing the related cost accounting and C. Maintenance and control process.
financial accounting records. D. Human resources process.
65. Which of the following company activities 72. The process that is concerned with
would NOT be considered a productive activity? maintaining the capital resources used to
A. The manufacture of automobiles. support production is referred to as:
A. The production schedule. B. Shipping notices
B. Production orders. C. Purchase requisitions
C Maintenance and control. D Inventory warehousing
D. The human resources process.
73. This schedule outlines the specific timing 79. The major function within the conversion
required for a sales order, including the dates process is the:
and times designated for the production run. A. Sales order function.
A Production schedule B. Sales forecast function.
B. Production orders schedule C Logistics function.
C. Maintenance and control schedule D. Reporting function.
D. Human resources schedule 80. The component of the logistics function that
74. The responsible for managing the placement directs the focus of operations is the:
and development of sufficient qualified A. Operations component.
personnel which includes hiring and training B. Resource management component.
workers as well as maintaining records of their C Planning component.
performance is the task of the: D. The sales component.
A. Production schedule department. 81.The planning component of the logistics
B. Production orders department. function has all of the following elements
C. Maintenance and control department. except:
D Human resources department. A Maintenance and control.
75. The responsibility for managing and B. Engineering.
recording the movement of inventory in the C. Scheduling.
many different directions that it may go D. Capital budgeting
throughout the conversion process is assigned 82. The resource management component of
to the: the logistics function has all of the following
A. Production schedule department. elements except:
B Inventory control department. A. Maintenance and control.
C. Maintenance and control department. B. Human resources.
D. Human resources department. C. Inventory control.
76. The issuance and movement of materials D Capital budgeting.
into the various production phases is referred 83. The operations component of the logistics
to as: function has which of the following elements?
A. Production scheduling process. A. Maintenance and control.
B. Inventory control process. B Production.
C The routing process. C. Inventory control.
D. The production orders process. D. Capital budgeting.
77. Which document provides the descriptions 84. The responsibility to conduct make/buy
and quantities of materials taken into decisions is usually given to:
production for a specified sale or other A. Engineering.
authorized production activity? B. Capital budgeting.
A The routing slip. C. Operations.
B. The shipping notice. D Research and development.
C. The purchase requisition. 85. Capital budgeting:
D. The sales order. A. Is responsible for the issuance of stocks and
78. Which of the following involves managing bonds to finance operations.
the holding area for finished goods awaiting B Plans the capital resources needed to support
sale? operations.
A. Purchase orders C. Is responsible for the procurement of
production materials.
D. Is not a function of a company once
established and functioning.
86. Engineering is responsible for:
A. Designing the product while operations is
responsible the bill of materials and the
operations list.
B. Designing the plant and equipment used in
manufacturing.
C. Is responsible for the procurement of
production equipment.
D Designing the product and creating the bill of
materials and the operations list.
87. The bill of materials is the:
A. Cost of raw materials purchased from a
vendor.
B. Document of instructions utilized to assemble
a product.
C. Form that specifies the components of a
product.
D Designing the product and creating the bill of
materials and the operations list.
88. The operations list is the:
A. Schedule of production for the day, week, or
month as specified by the company.
B. Document of instructions utilized to assemble
a product.
C Form that specifies the components of a
product.
D. Designing the product and creating the bill of
materials.
89. Scheduling:
A. Plans the timing for acquisition of fixed
assets.
B. Does not take into account machine
breakdowns.
C Takes into consideration all the open sales
orders.
D. Does not take inventory needs.
90. Production orders:
A. Outline the specific timing required for sales
orders.
B Authorize production activities for a particular
need or order.
C. Are forecasts of needs based on known and
anticipated sales.
D. Are issued by the engineering department to
correct product deficiency issues.
91. A production schedule:
A. Does not contain requirements due to sales
forecasts.
B. Does not contain information from the bill of
materials.
C Contains information from the operations list.
D. Are issued by the maintenance and control
department.
92. The department responsible for training
production personnel is the:
A. Production department.
B Human resources department.
C. Engineering department.
D. None of the above.
93. Economic order quantity (EOQ) is a function:
A. Of the purchasing customer or client.
B. Of the sales force to provide the purchasing
customer or client with the greatest value.
C. Of the responsibility of engineering through
the operations list.
D Associated with inventory control.
94. Routing is the:
A. Path electronic messages follow in the
inventory system.
B Issuance and movement of materials into the
various production phases.
C. Physical movement of materials from the
point of sale to the customer.
D. Physical movement of materials from the
vendor to the inventory stores facility.
95. Inventory status reports are:
A. Generated only for raw materials.
B. Only generated for finished goods.
C Prepared at various stages of the production
process.
D. Only generated for work in process.
96. Select the true statement from the choices
below.
A. Inventory stores and warehousing are both
concerned with raw materials.
B. Neither inventory stores nor warehousing are
concerned with raw materials.
C Inventory stores is concerned with raw
materials and warehousing is concerned with
finished goods.
D. Inventory stores is concerned with finished
goods and warehousing is concerned with raw
materials.
97. The term "operations" is commonly used to
refer to:
A The main function of the business.
B. Any function of the business which generates
revenues.
C. Only those functions of the business
accomplished by the operations department.
D. Only those functions which move inventory
through the production cycle.
98. Operations may be performed by all of the
following except:
A. Continuous processing of homogeneous
products.
B. Batch processing.
C. Custom, made-to-order processing.
D Each of the above is a valid form of
operations.
99. The final hub in the logistics function is:
A. Packaging.
B Quality control.
C. Sales.
D. Shipping to the customer.
100. Rework refers to:
A. Generating a better quote for a customer.
B. Overhaul of a manufacturing machine.
C Additional procedures to bring a product up
to specifications.
D. Parts that are beyond repair at any cost.
101. The final hub in the logistics function which
involves a follow-up to production, where the
products are inspected before they are moved
to the warehouse or shipping area is referred to
as:
A Quality control.
B. Shipping notice.
C. Purchase requisition.
D. Warehousing.
102. The expected cost based on projections of
a product's required resources which includes
direct materials, direct labor and overhead is
referred to as:
A. Quality control costs.
B. Sales order cost.
C. Rework costs.
D Standard costs.
103. A system which involves recording
purchases of raw materials inventory, recording
all the components of work in process, and
recording the total cost of sales for products
completed and sold is referred to as:
A A perpetual inventory system.
B. The accounting information system.
C. A periodic inventory system.
D. None of the above.
104. Perpetual inventory systems:
A. Record changes in inventory categories only
at the end of each period.
B. Record changes in inventory categories only
when sales are made.
C Record changes in inventory categories
whenever material is moved from one category
to another.
D. Does not address raw materials.
105. Variances represent the differences
between:
A actual costs and the standard costs applied.
B. raw materials ordered and raw materials
received.
C. the sales targets and sales accomplishments.
D. actual quantity on hand and quantity
according to the inventory system.
106. Standard costs are the:
A. Responsibility of production accountants.
B Expected costs based on required resources.
C. Costs normally paid for a component.
D. Prices the customer is expected to pay upon
sale.
107. Standard costs take into consideration all
of the following except:
A. The cost of materials utilized to maintain
production equipment.
B. The cost of labor used to operate the
production machinery.
C The cost of the sales manager's salary.
D. Factory overhead items that cannot be
directly correlated to product production.
108. Perpetual inventory systems:
A. Are only updated at the end of each fiscal
period.
B. Are concerned only with finished goods.
C. Are not concerned with raw materials.
D Involve every level of inventory necessary for
production.
109. Periodic inventory systems:
A. Are only updated at the end of each fiscal
period.
B. Are concerned only with finished goods.
C. Are not concerned with raw materials.
D May not reflect current inventory levels.
110. Variances:
A Represent the differences between actual
costs and the standard costs applied.
B. Represent the difference between design
specifications and production results.
C. Represent flaws in the production results.
D. Each of the answers, A, B, and C are correct.
111. Variances:
A. Are only investigated if they are unfavorable.
B. Are always investigated.
C. Will always result in the improvement of the
logistics function.
D May not result in any changes in the logistics
function.
112. Which of the following is NOT a
responsibility given to the individuals making
purchases for the company?
A. Purchasing raw materials for production.
B Specifying the order and sequence of
payments to vendors.
C. Selecting vendors.
D. Specifying the quantities to be ordered.
113. Which of the following activities in the
conversion process does NOT require express
authorization?
A. Initiation of production orders.
B. Issuance of materials into the production
process.
C. Transfer of finished goods to the warehouse
or shipping areas.
D Initiation of a sales order.
114. Segregation of duties is accomplished by
which of the following?
A Accounting personnel having restricted
access to physical inventory.
B. Warehouse personnel signing all documents
related to material movements.
C. Production personnel restricted to one
manufacturing station at all times.
D. None of the above.
115. Security of assets and documents include
all of the following except:
A. Water sprinklers.
B. Adequate insurance coverage.
C Restricted movement of office supplies.
D. Security guards.
116. In inventory systems, when the actual
quantity and the accounting records quantity
are compared it is referred to as:
A. Perpetual inventory.
B. Inventory resolution.
C The physical inventory reconciliation.
D. Periodic inventory.
117. Cost-benefit can be defined as:
A. Gross profit after sales are made.
B. Cameras and security guards to protect
construction materials in a restricted access
warehouse.
C. Verifying inventory levels at the end of each
working shift.
D Alarm systems and vaults for fine jewelry
inventories.
118. The activity in the conversion process that
does NOT require express authorization is the:
A. Initiation of production orders.
B. Issuance of materials into the production
process.
C. Transfer of finished goods to the warehouse
or shipping areas.
D Movement of production pieces from one
stage of production to the next.
119. Within the logistics function, segregation
of duties means:
A One person should not have both inventory
and accounting responsibilities.
B. One person should not have production
responsibilities over more than one station.
C. One person should not have quality
assurance responsibilities over a work station
other than his own.
D. Each person can only have one duty or
function in the production function.
120. Physical controls include all but:
A. Fences and alarm systems.
B. Security guards.
C. High tech security tools.
D Each of the answers, A, B, and C are correct.
121. Physical inventory counts should only
include:
A. Finished goods.
B. Finished goods and raw materials.
C. Finished goods and work-in-process.
D Raw materials, work-in-process, and finished
goods.
122. When there is a difference between the
inventory records quantity and the physical
count of inventory:
A. There is a variance.
B. The difference can be ignored if minor.
C The difference is resolved through inventory
reconciliation.
D. The difference is ignored if the physical
quantity exceeds inventory record quantity.
123. Which of the following factors does NOT
influence the need to safeguard and monitor
inventory movement?
A. Inconsistent or high levels of inventory
movement.
B. If the inventory is held at various locations.
C. If a company's inventory items are difficult to
differentiate.
D Each of the answers, A, B, and C are correct.
124. This software allows engineers to work
with advanced graphics at electronic work
stations to create 3-D models that depict the
production environment.
A. Computer-integrated manufacturing systems
(CIMs)
B Computer aided design (CAD)
C. Material resource planning (MRP)
D. Computer aided manufacturing (CAM)
125. _________________ involves the
automated scheduling of production orders and
movement of materials in the production
process.
A. Computer-integrated manufacturing systems
(CIMs)
B. Computer aided design (CAD)
C Material resource planning (MRP)
D. Computer aided manufacturing (CAM)
126. _____________ integrates all of the
conversion processes to allow for minimal
disruptions due to reporting requirements or
inventory movement issues.
A Computer-integrated manufacturing systems
(CIMs)
B. Computer aided design (CAD)
C. Material resource planning (MRP)
D. Computer aided manufacturing (CAM)
127. IT systems permit or allow all of the
following except:
A. Automatic computation of materials
requirements based on sales orders.
B Reduced internal security measures.
C. Automatic updating of inventory status
reports
D. Timely transfer of inventories throughout the
process.
128. Computerization of the conversion process
results in all except:
A Automatic computation of materials
requirements based on purchase orders.
B. Timely transfer of inventories throughout the
process.
C. Automatic updating of inventory status
reports.
D. Automatic computation of materials
requirements based on sales orders.
129. Select the false completion to the
statement which starts "A computer-based
conversion process:"
A Requires less data input into the system.
B. Automatically prepares financial accounting
entries and cost accounting reports.
C. Yields greater benefits in terms of workforce
efficiency.
D. Permits more systematic scheduling which
allows for greater flexibility.
130. Select the true statement.
A. Computer-aided manufacturing (CAM)
requires computer-aided design.
B. Computer-aided design is always two
dimensional.
C Computer-aided design may be three
dimensional.
D. Computer-aided design requires additional
manpower during assembly.
131. Just-in-time (JIT) production systems:
A. Require close communications with the
engineering department.
B. Do not require close communications with
vendors.
C Require closely controlled inventory levels.
D. Do not require additional monitoring.
132. The act of misstating financial information
in order to improve financial statement results
is referred to as:
A. Just in time production systems.
B. Manufacturing resource planning.
C Earning management.
D. Absorption costing.
133. Which of the following involves the
inclusion of both variable and fixed costs in the
determination of unit costs for ending
inventories and cost of goods sold?
A. Just in time production systems
B. Manufacturing resource planning
C. Earning management
D Absorption costing
134. Ethical issues of manufacturing include all
except:
A. Reassignment or retraining employees
terminated due to automation.
B Absorption costing.
C. Production of excessive inventory levels.
D. Earnings management.
135. When absorption costing is used:
A. Production inefficiencies are immediately
identified.
B. Production to absorb the cost of waste and
yield factors not considered in other costing
methods.
C Both variable and fixed costs are included in
unit costs.
D. The transfer of values to the income
statement through inventory accounts.
136. Earnings management:
A Is the act of misstating financial information.
B. Is the goal of cost/benefit relationships.
C. Accomplished through the proper
management of inventory and sales.
D. Is an ethical goal of management.
137. Manpower displacement through
automation:
A. Is considered a benefit through cost/benefit
analysis.
B Should be a concern of management.
C. Is the goal of proper engineering.
D. Seldom results in termination of employees.