TEST BANK FOR Managerial Accounting: Creating Value in a Dynamic Business Environment, 13th Edition by Ronald Hilton and David Platt ISBN: 978-1264445820 COMPLETE GUIDE ALL CHAPTERS COVERED 100% VERIFIED A+ GRADE ASSURED!!!!NEW LATEST UPDATE!!!!!

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,Test Bank Managerial Accounting: Creating Value in a Dynamic Business E
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nvironment, 13th Edition by Ronald Hilton X# X# X# X# X#




Appendix III X#



1) The EOQ model is a mathematical tool for determining the order quantity that:
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A) maximizes the costs of ordering and holding inventory.
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B) equals the costs of ordering and holding inventory.
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C) minimizes the costs of ordering and holding inventory.
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D) has no effect on the costs of ordering and holding invent
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ory.
E) none of these answers are correc
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t.


2) Inventory decisions involve a delicate balance between which of the following classe
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s of costs?
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A) Ordering costs, advertising costs, and shipping costs
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B) Advertising costs, holding costs, and shortage costs X# X# X# X# X# X#


C) Ordering costs, holding costs, and shortage costs
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D) Ordering costs, shipping costs, and shortage costs
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E) Shipping costs, holding costs, and shortage costs
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3) Which one of the following is true of a just-in-time (JIT) system?
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A) JIT system uses a “pull” approach to controlling manufacturing
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B) Inventory of raw materials and parts are kept as a buffer
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C) Inventory of partially completed parts are kept as a buffer
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D) Finished goods are kept as a buffer
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E) None of the answers are correct
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4) Which one of the following is true of Economic Order Quantity (EOQ)?
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A) The EOQ approach takes the view that some inventory is necessary in ord
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er to optimize the order quantity
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B) Is calculates as the square root of the following: (2 × annual requirement × cos
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t per order) ÷ annual holding cost per unit
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C) The graphical approach is one method of calculating EOQ
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D) A mathematical tool for determining the order quantity that minimizes the co
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st of ordering and holding inventory
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E) All of the answers are correct
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,5) Which of the following is a way that JIT efficiencies are achieved?
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A) Negotiating long-term supply agreements X# X# X#


B) Eliminating inspections X#


C) Reducing the number of vendors X# X# X# X#


D) Making less frequent payments
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E) All of the answers are correct
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6) Inventory holding costs typically include:
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A) clerical costs of purchase-order preparation.
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B) costs of deterioration, theft, or spoilage.
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C) costs associated with lost sales to customers.
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D) forgone interest on money tied up in inventory.
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E) both costs of deterioration, theft, or spoilage and forgone interest on money tied
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up in inventory.
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7) Inventory holding costs would typically include all of the following except:
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A) insurance.
B) theft.
C) transportation.
D) obsolescence.
E) warehouse rent. X#




8) Which of the following is classified as an inventory shortage cost?
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A) Purchase order preparation X# X#


B) Production disruption X#


C) Lost sales and lost customers
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D) Spoilage
E) Both production disruption and lost sales and lost customers
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9) At the
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A) total annual inventory costs, holding costs, and ordering costs are all minimized.
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B) total annual inventory costs and holding costs are minimized.
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C) total annual inventory costs are minimized, and holding costs equal ordering costs.
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D) total annual inventory costs are minimized, and holding costs exceed ordering costs.
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E) total annual inventory costs are minimized, and ordering costs exceed holding costs.
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, 10) Langdon Enterprises uses an economic order quantity model and has determined an opt
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imal order size of 2,200 units. Annual demand is 44,000 units, ordering costs are $60
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per order, and holding costs are $6 per unit. The company's annual holding costs total:
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A) $13,200.
B) $14,400.
C) $485,200.
D) $265,200.
E) none of the answers is correct. X# X# X# X# X#




11) Langdon Enterprises uses an economic order quantity model and has determined an opt
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imal order size of 500 units. Annual demand is 10,000 units, ordering costs are $50 per
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#order, and holding costs are $4 per unit. The company's annual holding costs total:
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A) $2,000.
B) $3,000.
C) $21,000.
D) $41,000.
E) none of the answers is correct. X# X# X# X# X#




12) Reflection Graphics uses a special purpose paper on 80% of its jobs. The paper is purc
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hased in 310- X# X#


sheet packages at a cost of $310 per package. Management estimates that the cost of p
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lacing and receiving a typical order is $36, and the annual cost of carrying a package
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in inventory is $3.60. Reflection Graphics uses 4,700 packages of paper each year. Pro
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duction is constant, and the lead time to receive an order is two week.
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The economic order quantity is approximately:
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Note: Round your final answer to the nearest whole number.
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A) 307 packages. X#


B) 4,018 packages. X#


C) 2,093 packages. X#


D) 1,636 packages. X#


E) 1,166 packages. X#




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