BUS 301 Final exam
Study online at https://quizlet.com/_i20a1v
1. 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?: 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
2. 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: 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
3. 1. For the P2P (Purchasing) goods receipt step, which of the following post-
ings will you make using the following information? Total cost of raw materials
, BUS 301 Final exam
Study online at https://quizlet.com/_i20a1v
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:: 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.
4. 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 produc-
tion order? (Write down this labor expense, you will need it later in the exam): 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
5. 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): a. $1,950
b. Explanation: production output is valued at standard price x quantity produced. $13 x 150 = $1,950
6. 1. Using the actual expenses you have written down and the planned output
value of the production order you can calculate the variance. This difference
between the planned and actual production costs is entered in the Production
Order Settlement Expense G/L. What amount will you record in the Production
Variance account?: a. $240 credit
b. Explanation: Each pen uses $7 in raw materials and $4.40 in labor, so each pen has actual costs of $11.40. $11.40 x
150 = $1,710. The planned output is $1,950 ($13 x 150), $1950 - $1,710 = $240
7. 1. Pen Inc. receives a sales order from Air Bear Bakery for 50 EPENs for $15.00
each. When processing the goods issue step for the sales order created in the
Study online at https://quizlet.com/_i20a1v
1. 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?: 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
2. 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: 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
3. 1. For the P2P (Purchasing) goods receipt step, which of the following post-
ings will you make using the following information? Total cost of raw materials
, BUS 301 Final exam
Study online at https://quizlet.com/_i20a1v
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:: 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.
4. 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 produc-
tion order? (Write down this labor expense, you will need it later in the exam): 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
5. 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): a. $1,950
b. Explanation: production output is valued at standard price x quantity produced. $13 x 150 = $1,950
6. 1. Using the actual expenses you have written down and the planned output
value of the production order you can calculate the variance. This difference
between the planned and actual production costs is entered in the Production
Order Settlement Expense G/L. What amount will you record in the Production
Variance account?: a. $240 credit
b. Explanation: Each pen uses $7 in raw materials and $4.40 in labor, so each pen has actual costs of $11.40. $11.40 x
150 = $1,710. The planned output is $1,950 ($13 x 150), $1950 - $1,710 = $240
7. 1. Pen Inc. receives a sales order from Air Bear Bakery for 50 EPENs for $15.00
each. When processing the goods issue step for the sales order created in the
