AIS Chapter 10 Quiz Review

When one of the following statements is true? Select one: a.ERP evolved into MRP and MRP evolved into MRP II b.None of the above is true. c.ERP evolved directly from MRP. d.MRP II evolved from MRP and MRP II evolved into ERP

MRP II evolved from MRP and MRP II evolved into ERP

An example of automation of manufacturing planning is Select one: a.Computer Aided Engineering b.Materials Requirements Planning c.Automated Storage and Retrieval Systems d.Computer Numerical Control

Materials Requirements Planning

The purpose of the cost accounting system is to Select one: a.direct the movement of work-in-process b.determine material requirements c.produce information for inventory valuation d.authorize release of raw materials

produce information for inventory valuation

Characteristics of lean manufacturing include all of the following except Select one: a.zero defects b.push manufacturing c.reliable vendors d.reduced setup time and small lot sizes

push manufacturing

A move ticket Select one: a.is the formal plan and authority to begin production b.records the work done in each work center c.authorizes the storekeeper to release materials to work centers d.specifies the materials and production required for each batch

records the work done in each work center

A flexible manufacturing system Select one: a.is organized along functional lines b.shortens the physical distance between activities c.leads to an "us" versus "them" attitude among workers d.creates bottlenecks in the process

shortens the physical distance between activities

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? Select one: a.123 b.245 c.none of the above d.174

174

If the daily demand is 40 units and the lead time is 12 days, the reorder point is Select one: a.52 units b.none of the above c.480 units d.48 units

480 units

Which of the following is not a problem associated with standard cost accounting? Select one: a.All of the above are problems with standard costing. b.The financial orientation of standard costing may promote bad decisions. c.Standard costing motivates management to produce large batches of products and build inventory. d.Applying standard costing leads to product cost distortions in a lean environment. e.Standard cost data are associated with excessive time lags that reduce its usefulness.

All of the above are problems with standard costing.

Which of the following would not be included as a value stream cost? Select one: a.Labor costs of employees who simply transport the product from cell to cell. b.All of the above are value stream costs c.Labor costs of employees who design the product. d.A charge per square foot for the value stream production facility including cost of rent and building maintenance.

All of the above are value stream costs

An example of automation of manufacturing design is Select one: a.Computer Aided Engineering b.Automated Storage and Retrieval Systems c.Computer Numerical Control d.robotics

Computer Aided Engineering

Which of the following is not true? Select one: a.Value stream accounting makes no distinction between direct costs and indirect costs. b.Value stream accounting captures costs related to value added activities within a specified department or activity. c.The complexities of ABC have caused many firms to pursue value stream accounting. d.An essential aspect in implementing value stream accounting is defining the product family.

Value stream accounting captures costs related to value added activities within a specified department or activity.

All of the following are characteristics of batch processing except Select one: a.each item in the batch is similar b.batches are produced to replenish depleted inventory levels c.setting up and retooling is required for different batches d.batches are produced in accordance with detailed customer specifications

batches are produced in accordance with detailed customer specifications

A manufacturing process that is organized into group technology cells utilizing no human labor is called Select one: a.computer integrated manufacturing b.process simplification c.islands of technology d.traditional manufacturing

computer integrated manufacturing

Which process creates a homogeneous product through a continuous series of standard procedures? Select one: a.make-to-order process b.none of the above c.continuous process d.batch process Feedback

continuous process

Which statement is not correct? Select one: a.general ledger posts summary information about the manufacturing process based on a journal voucher prepared by cost accounting b.general ledger creates a new cost record upon receipt of a work order from production planning and control c.cost accounting computes variances and applies overhead to individual cost records d.cost accounting updates the cost record with data gathered from the materials requisition

general ledger creates a new cost record upon receipt of a work order from production planning and control

The internal control significance of the excess materials requisition is that it Select one: a.documents the return to raw materials inventory of unused production materials b.indicates the amount of material released to work centers c.indicates the standard quantities required for production d.identifies materials used in production that exceed the standard amount allowed

identifies materials used in production that exceed the standard amount allowed

Deficiencies of the traditional cost accounting information system include all of the following except Select one: a.an emphasis on standard costs b.an emphasis on financial performance c.immediate feedback about deviations from the norm d.inaccurate cost allocations

immediate feedback about deviations from the norm

Which situation violates the segregation of functions control procedure? Select one: a.production planning and control is located apart from the work centers b.work centers record direct labor on job tickets c.inventory control maintains custody of inventory items d.cost accounting has custody of and makes entries on cost records

inventory control maintains custody of inventory items

Computer integrated manufacturing includes all of the following technologies except Select one: a.robotics b.materials requirements planning c.automated storage and retrieval systems d.computer aided design

materials requirements planning

The storekeeper releases raw materials based on the Select one: a.production schedule b.work order c.materials requisition d.bill of materials

materials requisition

An example of a continuous process is the production of Select one: a.wedding invitations b.milk products c.jet aircraft d.all of the above

milk products

Which function is not a part of the batch production process? Select one: a.Maintain inventory control b.Perform cost accounting c.Prepare purchase orders d.Plan and control production

prepare purchase orders

Inventory control performs all of the following tasks except it Select one: a.provides production planning and control with the inventory status report of finished goods b.records the completed production as an increase to finished goods inventory c.updates the raw material inventory records d.prepares a materials requisition for each production batch

prepares a materials requisition for each production batch

The cost of poor quality includes all of the following except Select one: a.scheduling delays b.warranty claims c.proceeds from the sale of scrap d.cost of rework

proceeds from the sale of scrap

Process simplification focuses on Select one: a.reducing the complexity of the physical manufacturing layout of the shop floor b.completely automating the manufacturing environment c.organizing the process into functional departments d.using Computer Numerical Controlled machines which stand alone within a traditional setting

reducing the complexity of the physical manufacturing layout of the shop floor

All of the following are internal control procedures that should be in place in the conversion cycle except Select one: a.calculation and analysis of direct material and direct labor variances b.retention of excess materials by work centers c.limited access to raw material and finished goods inventories d.physical count of inventory items on hand

retention of excess materials by work centers

The production schedule is Select one: a.a description of the type and quantity of raw materials and subassemblies used to produce a single unit of finished product b.the expected demand for the firm's finished goods for a given year c.the formal plan and authority to begin production d.the sequence of operations during manufacturing

the formal plan and authority to begin production

Which of the following is not an assumption of the Economic Order Quantity model? Select one: a.there are no quantity discounts b.total cost per year of placing orders is fixed c.lead time is known and is constant d.demand for the product is known with certainty

total cost per year of placing orders is fixed

Firms hold safety stock to compensate for Select one: a.mathematical weaknesses of the Economic Order Quantity model b.fluctuations in carrying costs c.variations in lead time or daily demand d.uncertainty in the estimation of ordering costs

variations in lead time or daily demand