BUS 301 Final Exam UPDATED Study
ACTUAL QUESTIONS AND CORRECT
ANSWERS
1. The planned independent requirements (PIR) for EPEN is 200. Pen Inc. currently has 100
EPENs in stock and has a safety stock value of 50. The material shortage calculated for
EPEN by MRP is what? - CORRECT ANSWER a. 150
b. Explanation: 100 pens in stock, but 50 are safety stock, so there are 50 available. We need
200, so 200-50 = 150
1. Pen Inc. currently has no raw materials in stock and no safety stock level has been defined.
Considering the EPEN Bill of Material (BOM) below and based on the material shortage that
MRP calculated for EPENS, what is the material shortage for raw materials (quantity of each
raw material) that need to be purchased?
EPEN BOM
Material
Quantity
Clip
1
Cap
1
Crown
1
Barrel
1
Cartridge
2
Band
1 - CORRECT ANSWER a. We need 150 EPENs, so with no raw materials and no
safety stock requirement, we need:
b. Clip 150
, c. Cap 150
d. Crown 150
e. Barrel 150
f. Cartridge 300
g. Band 100
1. For the P2P (Purchasing) goods receipt step, which of the following postings will you
make using the following information? Total cost of raw materials per EPEN is $7.00 from
Pen Parts. You receive all the goods that you are purchasing at this time based on the MRP
shortage you found above. Using the quantities that you determined above and the prices
listed in this question, what are the G/L postings: - CORRECT ANSWER a. Debit raw
materials and credit the GR/IR for $1,050.00
b. Explanation: we bought 150 EPENs worth of raw materials. 150 x $7 = $1,050. On goods
receipt, RM inventory (an asset) goes up (debit) and the offset is the credit to GR/IR.
1. The activity type of labor is valued at 40 cents per minute for work center 100 in the
production cost center. Upon checking the EPEN routing, we see that there are 4 steps to
making the EPEN.
o step 1 takes 2 minutes
o Step 2 takes 3 minutes
o step 3 takes 2 minutes
o step 4 takes 4 minutes
Using the per unit labor cost and the number of materials produced, what amount will you
calculate for your labor expense recorded against your production order? (Write down this
labor expense, you will need it later in the exam) - CORRECT ANSWER a. $660
b. Explanation: totals time per pen is 11 minutes. 11 x $.40 = $4.40 per pen. We're making
150 pens, so 150 x $4.40 = $660
1. The standard price for a EPEN is $13.00. What is the value of the planned output
(materials produced) from your production order? (Write down this planned output value, you
will need it later in the exam) - CORRECT ANSWER a. $1,950
b. Explanation: production output is valued at standard price x quantity produced. $13 x 150
= $1,950
ACTUAL QUESTIONS AND CORRECT
ANSWERS
1. The planned independent requirements (PIR) for EPEN is 200. Pen Inc. currently has 100
EPENs in stock and has a safety stock value of 50. The material shortage calculated for
EPEN by MRP is what? - CORRECT ANSWER a. 150
b. Explanation: 100 pens in stock, but 50 are safety stock, so there are 50 available. We need
200, so 200-50 = 150
1. Pen Inc. currently has no raw materials in stock and no safety stock level has been defined.
Considering the EPEN Bill of Material (BOM) below and based on the material shortage that
MRP calculated for EPENS, what is the material shortage for raw materials (quantity of each
raw material) that need to be purchased?
EPEN BOM
Material
Quantity
Clip
1
Cap
1
Crown
1
Barrel
1
Cartridge
2
Band
1 - CORRECT ANSWER a. We need 150 EPENs, so with no raw materials and no
safety stock requirement, we need:
b. Clip 150
, c. Cap 150
d. Crown 150
e. Barrel 150
f. Cartridge 300
g. Band 100
1. For the P2P (Purchasing) goods receipt step, which of the following postings will you
make using the following information? Total cost of raw materials per EPEN is $7.00 from
Pen Parts. You receive all the goods that you are purchasing at this time based on the MRP
shortage you found above. Using the quantities that you determined above and the prices
listed in this question, what are the G/L postings: - CORRECT ANSWER a. Debit raw
materials and credit the GR/IR for $1,050.00
b. Explanation: we bought 150 EPENs worth of raw materials. 150 x $7 = $1,050. On goods
receipt, RM inventory (an asset) goes up (debit) and the offset is the credit to GR/IR.
1. The activity type of labor is valued at 40 cents per minute for work center 100 in the
production cost center. Upon checking the EPEN routing, we see that there are 4 steps to
making the EPEN.
o step 1 takes 2 minutes
o Step 2 takes 3 minutes
o step 3 takes 2 minutes
o step 4 takes 4 minutes
Using the per unit labor cost and the number of materials produced, what amount will you
calculate for your labor expense recorded against your production order? (Write down this
labor expense, you will need it later in the exam) - CORRECT ANSWER a. $660
b. Explanation: totals time per pen is 11 minutes. 11 x $.40 = $4.40 per pen. We're making
150 pens, so 150 x $4.40 = $660
1. The standard price for a EPEN is $13.00. What is the value of the planned output
(materials produced) from your production order? (Write down this planned output value, you
will need it later in the exam) - CORRECT ANSWER a. $1,950
b. Explanation: production output is valued at standard price x quantity produced. $13 x 150
= $1,950
