Test Bank - Managerial Accounting: Creating Value in a Dynamic Business Environment, 13th Edition by Hilton

Test Bank Managerial Accounting: Creating Value in a Dynamic Business
Environment, 13th Edition by Ronald Hilton


Appendix IIIv


1) ThevEOQvmodelvisvavmathematicalvtoolvforvdeterminingvthevordervquantityvthat:
A) maximizesvthevcostsvofvorderingvandvholdingvinventory.
B) equalsvthevcostsvofvorderingvandvholdingvinventory.
C) minimizesvthevcostsvofvorderingvandvholdingvinventory. All Chapters
v


D) hasvnoveffectvonvthevcostsvofvorderingvandvholdingvinventory.
E) nonevofvthesevanswersvarevcorrect.
Answers Included
v




2) Inventoryvdecisionsvinvolvevavdelicatevbalancevbetweenvwhichvofvthevfollowingvclassesvofvc
osts?
A) Orderingvcosts,vadvertisingvcosts,vandvshippingvcosts
B) Advertisingvcosts,vholdingvcosts,vandvshortagevcosts
C) Orderingvcosts,vholdingvcosts,vandvshortagevcosts
D) Orderingvcosts,vshippingvcosts,vandvshortagevcosts
E) Shippingvcosts,vholdingvcosts,vandvshortagevcosts


3) Whichvonevofvthevfollowingvisvtruevofvavjust-in-timev(JIT)vsystem?
A) JITvsystemvusesvav“pull”vapproachvtovcontrollingvmanufacturing
B) Inventoryvofvrawvmaterialsvandvpartsvarevkeptvasvavbuffer
C) Inventoryvofvpartiallyvcompletedvpartsvarevkeptvasvavbuffer
D) Finishedvgoodsvarevkeptvasvavbuffer
E) Nonevofvthevanswersvarevcorrect



4) WhichvonevofvthevfollowingvisvtruevofvEconomicvOrdervQuantityv(EOQ)?
A) ThevEOQvapproachvtakesvthevviewvthatvsomevinventoryvisvnecessaryvinvordervtovo
ptimizevthevordervquantity
B) Isvcalculatesvasvthevsquarevrootvofvthevfollowing:v(2v×vannualvrequirementv×vcostvpervo
rder)v÷vannualvholdingvcostvpervunit
C) ThevgraphicalvapproachvisvonevmethodvofvcalculatingvEOQ
D) Avmathematicalvtoolvforvdeterminingvthevordervquantityvthatvminimizesvthevcostvofv
orderingvandvholdingvinventory
E) Allvofvthevanswersvarevcorrect




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,5) WhichvofvthevfollowingvisvavwayvthatvJITvefficienciesvarevachieved?
A) Negotiatingvlong-termvsupplyvagreements
B) Eliminatingvinspections
C) Reducingvthevnumbervofvvendors
D) Makingvlessvfrequentvpayments
E) Allvofvthevanswersvarevcorrect



6) Inventoryvholdingvcostsvtypicallyvinclude:
A) clericalvcostsvofvpurchase-ordervpreparation.
B) costsvofvdeterioration,vtheft,vorvspoilage.
C) costsvassociatedvwithvlostvsalesvtovcustomers.
D) forgonevinterestvonvmoneyvtiedvupvinvinventory.
E) bothvcostsvofvdeterioration,vtheft,vorvspoilagevandvforgonevinterestvonvmoneyvtiedvupvinvi
nventory.


7) Inventoryvholdingvcostsvwouldvtypicallyvincludevallvofvthevfollowingvexcept:
A) insurance.
B) theft.
C) transportation.
D) obsolescence.
E) warehousevrent.



8) Whichvofvthevfollowingvisvclassifiedvasvanvinventoryvshortagevcost?
A) Purchasevordervpreparation
B) Productionvdisruption
C) Lostvsalesvandvlostvcustomers
D) Spoilage
E) Bothvproductionvdisruptionvandvlostvsalesvandvlostvcustomers



9) Atvtheveconomicvordervquantity:
A) totalvannualvinventoryvcosts,vholdingvcosts,vandvorderingvcostsvarevallvminimized.
B) totalvannualvinventoryvcostsvandvholdingvcostsvarevminimized.
C) totalvannualvinventoryvcostsvarevminimized,vandvholdingvcostsvequalvorderingvcosts.
D) totalvannualvinventoryvcostsvarevminimized,vandvholdingvcostsvexceedvorderingvcosts.
E) totalvannualvinventoryvcostsvarevminimized,vandvorderingvcostsvexceedvholdingvcosts.




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,10) LangdonvEnterprisesvusesvanveconomicvordervquantityvmodelvandvhasvdeterminedvanvoptimalv
ordervsizevofv2,200vunits.vAnnualvdemandvisv44,000vunits,vorderingvcostsvarev$60vpervorder,van
dvholdingvcostsvarev$6vpervunit.vThevcompany'svannualvholdingvcostsvtotal:
A) $13,200.
B) $14,400.
C) $485,200.
D) $265,200.
E) nonevofvthevanswersvisvcorrect.



11) LangdonvEnterprisesvusesvanveconomicvordervquantityvmodelvandvhasvdeterminedvanvoptimalvo
rdervsizevofv500vunits.vAnnualvdemandvisv10,000vunits,vorderingvcostsvarev$50vpervorder,vandvho
ldingvcostsvarev$4vpervunit.vThevcompany'svannualvholdingvcostsvtotal:
A) $2,000.
B) $3,000.
C) $21,000.
D) $41,000.
E) nonevofvthevanswersvisvcorrect.



12) ReflectionvGraphicsvusesvavspecialvpurposevpapervonv80%vofvitsvjobs.vThevpapervisvpurchasedvi
nv310-
sheetvpackagesvatvavcostvofv$310vpervpackage.vManagementvestimatesvthatvthevcostvofvplacingv
andvreceivingvavtypicalvordervisv$36,vandvthevannualvcostvofvcarryingvavpackagevinvinventoryvisv
$3.60.vReflectionvGraphicsvusesv4,700vpackagesvofvpaperveachvyear.vProductionvisvconstant,va
ndvthevleadvtimevtovreceivevanvordervisvtwovweek.
Theveconomicvordervquantityvisvapproximately:
Note:vRoundvyourvfinalvanswervtovthevnearestvwholevnumber.
A) 307vpackages.
B) 4,018vpackages.
C) 2,093vpackages.
D) 1,636vpackages.
E) 1,166vpackages.




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, 13) ReflectionvGraphicsvusesvavspecialvpurposevpapervonv80%vofvitsvjobs.vThevpapervisvpurchasedvi
nv100-
sheetvpackagesvatvavcostvofv$100vpervpackage.vManagementvestimatesvthatvthevcostvofvplacingv
andvreceivingvavtypicalvordervisv$15,vandvthevannualvcostvofvcarryingvavpackagevinvinventoryvisv
$1.50.vReflectionvGraphicsvusesv2,600vpackagesvofvpaperveachvyear.vProductionvisvconstant,va
ndvthevleadvtimevtovreceivevanvordervisvonevweek.
Theveconomicvordervquantityvisvapproximately:
A) 203vpackages.
B) 225vpackages.
C) 228vpackages.
D) 565vpackages.
E) 631vpackages.



14) ReflectionvGraphicsvusesvavspecialvpurposevpapervonv80%vofvitsvjobs.vThevpapervisvpurchasedvi
nv350-
sheetvpackagesvatvavcostvofv$350vpervpackage.vManagementvestimatesvthatvthevcostvofvplacingv
andvreceivingvavtypicalvordervisv$40,vandvthevannualvcostvofvcarryingvavpackagevinvinventoryvisv
$4.00.vReflectionvGraphicsvusesv5,100vpackagesvofvpaperveachvyear.vProductionvisvconstant,va
ndvthevleadvtimevtovreceivevanvordervisvthreevweeks.
Note:vAssumev52vweeksvinvavyear.vDovnotvroundvyourvintermediatevcalculations.vRoundvyo
urvfinalvanswervtovnearestvwholevdollarvamount.
Thevreordervpointvis:
A) 147vpackages.
B) 1,440vpackages.
C) 5,600vpackages.
D) 350vpackages.
E) 294vpackages.



15) ReflectionvGraphicsvusesvavspecialvpurposevpapervonv80%vofvitsvjobs.vThevpapervisvpurchasedvi
nv100-
sheetvpackagesvatvavcostvofv$100vpervpackage.vManagementvestimatesvthatvthevcostvofvplacingv
andvreceivingvavtypicalvordervisv$15,vandvthevannualvcostvofvcarryingvavpackagevinvinventoryvisv
$1.50.vReflectionvGraphicsvusesv2,600vpackagesvofvpaperveachvyear.vProductionvisvconstant,va
ndvthevleadvtimevtovreceivevanvordervisvonevweek.
Thevreordervpointvis:
A) 25vpackages.
B) 50vpackages.
C) 100vpackages.
D) 203vpackages.
E) 225vpackages.

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