TEST BANK FOR Managerial Accounting: Creating Value in a Dynamic Business Environment, 13th Edition by Ronald Hilton and David Platt ISBN: 9781265046798 COMPLETE GUIDE ALL CHAPTERS COVERED 100% VERIFIED A+ GRADE ASSURED!!!!NEW LATEST UPDATE!!!!!

Test Bank
8%




1

,Managerial Accounting: Creating Value in a Dynamic Business Environment, 13t
gx gx gx gx gx gx gx gx gx




h Edition by Ronald Hilton
gx gx gx gx




Appendix III gx




1) The EOQ model is a mathematical tool for determining the order quantity that:
gx gx gx gx gx gx gx gx gx gx gx gx




A) maximizes the costs of ordering and holding inventory. gx gx gx gx gx gx gx



B) equals the costs of ordering and holding inventory.
gx gx gx gx gx gx gx




C) minimizes the costs of ordering and holding inventory.gx gx gx gx gx gx gx
All Chapters gx




D) has no effect on the costs of ordering and holding inventor
gx gx gx gx gx gx gx gx gx gx gx



y.
E) none of these answers are correc
Answers Included
gx gx gx gx gx



t
gx




.


2) Inventory decisions involve a delicate balance between which of the following classes
gx gx gx gx gx gx gx gx gx gx gx gx



of costs?
gx




A) Ordering costs, advertising costs, and shipping costs
gx gx gx gx gx gx




B) Advertising costs, holding costs, and shortage costs gx gx gx gx gx gx




C) Ordering costs, holding costs, and shortage costs
gx gx gx gx gx gx




D) Ordering costs, shipping costs, and shortage costs
gx gx gx gx gx gx




E) Shipping costs, holding costs, and shortage costs
gx gx gx gx gx gx




3) Which gx one of the following is true of a just-in-time (JIT) system?
gx gx gx gx gx gx gx gx gx gx




A) JIT system uses a “pull” approach to controlling manufacturing
gx gx gx gx g x gx gx gx




B) Inventory of raw materials and parts are kept as a buffer
gx gx gx gx gx gx gx gx gx gx




C) Inventory of partially completed parts are kept as a buffer
gx gx gx gx gx gx gx gx gx




D) Finished goods are kept as a buffer
gx gx gx gx gx gx




E) None of the answers are correct
gx gx gx gx gx




4) Which one of the following is true of Economic Order Quantity (EOQ)?
gx gx gx gx gx gx gx gx gx gx gx




A) The EOQ approach takes the view that some inventory is necessary in order t
gx gx gx gx gx gx gx gx gx gx gx gx gx



o optimize the order quantity
gx gx gx gx




B) Is calculates as the square root of the following: (2 × annual requirement × cost p
gx gx gx gx gx gx gx gx gx gx gx gx gx gx gx




er order) ÷ annual holding cost per unit
gx gx gx gx gx gx gx




C) The graphical approach is one method of calculating EOQ
gx gx gx gx gx gx gx gx




D) A mathematical tool for determining the order quantity that minimizes the cost
gx gx gx gx gx gx gx gx gx gx gx gx



of ordering and holding inventory
gx gx gx gx




E) All of the answers are correct
gx gx gx gx gx




2

,5) Which gx of the following is a way that JIT efficiencies are achieved?
gx gx gx gx gx gx gx gx gx gx




A) Negotiating long-term supply agreements gx gx gx




B) Eliminating inspections gx




C) Reducing the number of vendors gx gx gx gx




D) Making less frequent payments
gx gx gx




E) All of the answers are correct
gx gx gx gx gx




6) Inventory holding costs typically include:
gx gx gx gx




A) clerical costs of purchase-order preparation.
gx gx gx gx




B) costs of deterioration, theft, or spoilage.
gx gx gx gx gx




C) costs associated with lost sales to customers.
gx gx gx gx gx gx




D) forgone interest on money tied up in inventory.
gx gx gx gx gx gx gx




E) both costs of deterioration, theft, or spoilage and forgone interest on money tied up i
gx gx gx gx gx gx gx gx gx gx gx gx gx gx



n inventory.
gx




7) Inventory holding costs would typically include all of the following except:
gx gx gx gx gx gx gx gx gx gx




A) insurance.
B) theft.
C) transportation.
D) obsolescence.
E) warehouse rent. gx




8) Which gx of the following is classified as an inventory shortage cost?
gx gx gx gx gx gx gx gx gx




A) Purchase order preparation gx gx




B) Production disruption gx




C) Lost sales and lost customers
gx gx gx gx




D) Spoilage
E) Both production disruption and lost sales and lost customers
gx gx gx gx gx gx gx gx




9) At the
gx gx economic order quantity: gx gx




A) total annual inventory costs, holding costs, and ordering costs are all minimized.
gx gx gx gx gx gx gx gx gx gx gx




B) total annual inventory costs and holding costs are minimized.
gx gx gx gx gx gx gx gx




C) total annual inventory costs are minimized, and holding costs equal ordering costs.
gx gx gx gx gx gx gx gx gx gx gx




D) total annual inventory costs are minimized, and holding costs exceed ordering costs.
gx gx gx gx gx gx gx gx gx gx gx




E) total annual inventory costs are minimized, and ordering costs exceed holding costs.
gx gx gx gx gx gx gx gx gx gx gx




3

, 10) Langdon Enterprises uses an economic order quantity model and has determined an optim a
gx gx gx gx gx gx gx gx gx gx gx gx gx




l order size of 2,200 units. Annual demand is 44,000 units, ordering costs are $60 per o rder
gx gx gx gx gx gx gx gx gx gx gx gx gx gx gx gx gx




, and holding costs are $6 per unit. The company's annual holding costs total:
g x g x g x g x g x g x g x g x g x g x g x g x g x




A) $13,200.
B) $14,400.
C) $485,200.
D) $265,200.
E) none of the answers is correct. gx gx gx gx gx




11) Langdon Enterprises uses an economic order quantity model and has determined an optim
gx gx gx gx gx gx gx gx gx gx gx gx g x




al order size of 500 units. Annual demand is 10,000 units, ordering costs are $50 per orde
gx gx gx gx gx gx gx gx gx gx gx gx gx gx gx gx




r
, and holding costs are $4 per unit. The company's annual holding costs total:
gx gx gx gx gx gx gx gx gx gx gx gx gx




A) $2,000.
B) $3,000.
C) $21,000.
D) $41,000.
E) none of the answers is correct. gx gx gx gx gx




12) Reflection Graphics uses a special purpose paper on 80% of its jobs. The paper is purchas e
gx gx gx gx gx gx gx gx gx gx gx gx gx gx gx gx




d in 310-
gx gx




sheet packages at a cost of $310 per package. Management estimates that the cost of pla cin
gx gx gx gx gx gx gx gx gx gx gx gx gx gx gx gx




g and receiving a typical order is $36, and the annual cost of carrying a package in in ventor
gx gx gx gx gx gx gx gx gx gx gx gx gx gx gx gx gx gx




y is $3.60. Reflection Graphics uses 4,700 packages of paper each year. Production is con
gx gx gx gx gx gx gx gx gx gx gx gx g x g x




stant, and the lead time to receive an order is two week.
g x g x g x g x g x g x g x g x g x g x g x




The economic order quantity is approximately:
gx gx gx gx gx




Note: Round your final answer to the nearest whole number.
gx g x gx g x gx g x gx g x gx




A) 307 packages. gx




B) 4,018 packages. gx




C) 2,093 packages. gx




D) 1,636 packages. gx




E) 1,166 packages. gx




4