CH 7 - The Conversion Cycle AIS HBU Accounting Information Systems MC

b. prepares a materials requisition for each production batch

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

a. the reorder point

Lead time times daily demand is a. the reorder point b. the economic order quantity c. total inventory d. safety stock

c. proceeds from the sale of scrap

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

c. focuses on the trade-off between production costs and carrying costs

The fundamental EOQ model a. is stochastic in nature b. is best used in conjunction with a periodic inventory system c. focuses on the trade-off between production costs and carrying costs d. provides for fluctuating lead times during reorder cycles e. is relatively insensitive to errors in demand, procurement costs, and carrying costs

c. the formal plan and authority to begin production

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

d. batches are produced in accordance with detailed customer specifications

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

d. retention of excess materials by work centers

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

a. materials requirements planning

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

e. work order

Which document triggers the cost accounting process for a given production run? a. route sheet b. move ticket c. production schedule d. materials requisition e. work order

c. high employee turnover

Which of the following is not a feature of a world-class company? a. ability to profitably meet customers' needs b. ability to maintain strategic agility c. high employee turnover d. all of the above are features that characterize a world-class company

d. All of the above are principles of lean manufacturing.

Which of the following is not a principle of lean manufacturing? a. A lean manufacturing firm must achieve high inventory turnover rates. b. A lean manufacturing firm must have established and cooperative relationships with vendors. c. All activities that do not add value and maximize the use of scarce resources must be eliminated. d. All of the above are principles of lean manufacturing. e. None of the above are principles of lean manufacturing.

d. Products are pushed from the production end to the customer.

Which of the following is not a principle of lean manufacturing? a. All activities that do not add value and maximize the use of scarce resources must be eliminated. b. A goal is the achievement of a high inventory turnover rate. c. A lean manufacturing firm must have established and cooperative relationships with vendors. d. Products are pushed from the production end to the customer.

b. purchase of raw materials

Which of the following is not a process in the batch processing system? a. maintain inventory control b. purchase of raw materials c. perform production operations d. perform cost accounting e. plan and control production

a. total cost per year of placing orders is fixed

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

c. inventory control maintains custody of inventory items

Which situation violates the segregation of functions control procedure? 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

d. MRP II evolved from MRP and MRP II evolved into ERP

Which statement describes the evolution of enterprise systems? a. ERP evolved into MRP and MRP evolved into MRP II b. ERP evolved directly into MRP c. MRP evolved directly into ERP d. MRP II evolved from MRP and MRP II evolved into ERP