CH 7 AIS

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

D

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

D

Firms are abandoning activity-based costing (ABC) because a. the financial nature of the reports does not permit comparisons to be made among different types of products b. it does not recognize the importance of direct labor as a component of total manufacturing cost c. it does not facilitate the analysis of variances d. it is complex and time consuming

D

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

D

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.

D

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.

D

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

A

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

A

Firms hold safety stock to compensate for a. variations in lead time or daily demand b. fluctuations in carrying costs c. mathematical weaknesses of the economic order quantity model d. uncertainty in the estimation of ordering costs

A

Inventory control performs all of the following tasks except it a. prepares a materials requisition for each production batch b. updates the raw material inventory records 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 internal control significance of the excess materials requisition is that it a. identifies materials used in production that exceed the standard amount allowed b. indicates the amount of material released to work centers c. documents the return to raw materials inventory of unused production materials d. indicates the standard quantities required for production

A

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. 116 d. 245

A

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. A goal is the achievement of a high inventory turnover rate. d. A lean manufacturing firm must have established and cooperative relationships with vendors

A

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

A

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

B

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

B

An example of automation of manufacturing planning is a. automated storage and retrieval systems b. materials requirements planning c. computer numerical control d. computer-aided engineering

B

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

B

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

B

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

B

Which of the following statements about the EOQ inventory model assumptions is incorrect? a. Total ordering cost is a variable. b. The lead time is a variable. c. Demand for the product is constant and known with certainty. d. All inventories in the order arrive at the same time.

B

Which statement is not true? a. World-class companies must maintain strategic agility and be able to turn on a dime. b. All world-class companies use ERP to integrate all company functions. c. Manufacturing firms that achieve world-class status do so by following a philosophy of lean manufacturing. d. World-class companies motivate and treat employees like appreciating assets.

B

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

C

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

C

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.

C

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

C

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

C

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

C

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

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

D