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!!!!!

Test Bank
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dition by Ronald Hilton
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AppendixIII vr




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. v r v r v r v r v r v r v r



B) equals the costs of ordering and holding inventory. v r vr v r v r v r v r v r




C) minimizes the costs of ordering and holding inventory. v r vr v r v r v r v r v r
All Chapters vr




D) has no effect on the costs of ordering and holding inventor y.
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E) none of these answers are correc
Answers Included
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t
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.


2) Inventory decisions involve a delicate balance between which of the following classes o f
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costs?
A) Ordering costs, advertising costs, and shipping costs vr v r v r vr v r vr



B) Advertising costs, holding costs, and shortage costs vr v r v r vr v r vr



C) Ordering costs, holding costs, and shortage costs vr v r vr v r vr vr



D) Ordering costs, shipping costs, and shortage costs vr v r vr v r v r vr



E) Shipping costs, holding costs, and shortage costs vr v r vr vr v r v r




3) Which vr 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 vr v r vr v r v r v r v r vr v r v r



C) Inventory of partially completed parts are kept as a buffer vr v r v r v r v r vr v r v r v r



D) Finished goods are kept as a buffer vr v r vr vr v r vr



E) None of the answers are correct vr v r v r v r vr




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 order to o
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ptimize the order quantity vr vr vr




B) Is calculates as the square root of the following: (2 × annual requirement × cost pe r o
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rder) ÷ 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 cost o f
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ordering and holding inventory vr vr vr




E) All of the answers are correct
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,5) Which vr of the following is a way that JIT efficiencies are achieved?
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A) Negotiating long-term supply agreements vr v r v r



B) Eliminating inspections v r



C) Reducing the number of vendors v r v r v r v r



D) Making less frequent payments vr vr v r




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 up in in
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ventory.


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. vr




8) Which vr of the following is classified as an inventory shortage cost?
v r vr v r v r v r v r v r v r v r



A) Purchase order preparation vr v r



B) Production disruption v r



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
v r vr economic order quantity: v r v r



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 optim al or
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der size of 2,200 units. Annual demand is 44,000 units, ordering costs are $60 per o rder, and
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holding costs are $6 per unit. The company's annual holding costs total:
v r v r v r v r v r v r v r v r v r v r v r v r




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




11) Langdon Enterprises uses an economic order quantity model and has determined an optim
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a
l order size of 500 units. Annual demand is 10,000 units, ordering costs are $50 per orde
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r
, 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. vr v r vr v r v r




12) Reflection Graphics uses a special purpose paper on 80% of its jobs. The paper is purchas ed in
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310-
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sheet packages at a cost of $310 per package. Management estimates that the cost of pla cing an
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d receiving a typical order is $36, and the annual cost of carrying a package in in ventory i s $3.
9% vr vr vr vr vr vr 9% vr vr vr vr vr vr vr vr vr vr vr vr




60. Reflection Graphics uses 4,700 packages of paper each year. Production is consta nt, a
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nd 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.
v r v r v r v r v r v r v r v r v r




A) 307 packages. v r



B) 4,018 packages. v r



C) 2,093 packages. v r



D) 1,636 packages. v r



E) 1,166 packages. v r




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