TEST BANK MANAGERIAL ACCOUNTING: CREATING VALUE IN A DYNAMIC BUSINESS
tt tt tt tt tt tt tt tt tt
ENVIRONMENT, 13TH EDITION BY RONALD HILTON tt tt tt tt tt tt
ttV ttV ttV ttV ttV ttV ttV ttV ttV ttV ttV ttV ttV ttV ttV ttV ttV ttV ttV ttV ttV ttV ttV ttV ttV ttV ***with answers keys*** ttV ttV
Appendix III ttV
1) The VEOQ Vmodel Vis Va Vmathematical Vtool Vfor Vdetermining Vthe Vorder Vquantity Vthat:
tt tt tt tt tt tt tt tt tt tt tt tt
A) maximizes Vthe Vcosts Vof Vordering Vand Vholding Vinventory. tt tt tt tt tt tt tt
B) equals Vthe Vcosts Vof Vordering Vand Vholding Vinventory. tt tt tt tt tt tt tt
C) minimizes Vthe Vcosts Vof Vordering Vand Vholding Vinventory. tt tt tt tt tt tt tt
D) has Vno Veffect Von Vthe Vcosts Vof Vordering Vand Vholding
tt tt tt tt tt tt tt tt tt
inventory.
ttV
E) none Vof Vthese Vanswers Vare tt tt tt tt ttV correct.
2) Inventory Vdecisions Vinvolve Va Vdelicate Vbalance Vbetween Vwhich Vof Vthe Vfollowing
tt tt tt tt tt tt tt tt tt tt
ttV classes Vof Vcosts? tt tt
A) Ordering Vcosts, Vadvertising Vcosts, Vand Vshipping Vcosts tt tt tt tt tt tt
B) Advertising Vcosts, Vholding Vcosts, Vand Vshortage Vcosts tt tt tt tt tt tt
C) Ordering Vcosts, Vholding Vcosts, Vand Vshortage Vcosts tt tt tt tt tt tt
D) Ordering Vcosts, Vshipping Vcosts, Vand Vshortage Vcosts tt tt tt tt tt tt
E) Shipping Vcosts, Vholding Vcosts, Vand Vshortage Vcosts tt tt tt tt tt tt
3) Which Vone Vof Vthe Vfollowing Vis Vtrue Vof Va Vjust-in-time V(JIT) Vsystem?
tt tt tt tt tt tt tt tt tt tt tt
A) JIT Vsystem Vuses Va V“pull” Vapproach Vto Vcontrolling Vmanufacturing
tt tt tt tt tt tt tt tt
B) Inventory Vof Vraw Vmaterials Vand Vparts Vare Vkept Vas Va Vbuffer tt tt tt tt tt tt tt tt tt tt
C) Inventory Vof Vpartially Vcompleted Vparts Vare Vkept Vas Va Vbuffer tt tt tt tt tt tt tt tt tt
D) Finished Vgoods Vare Vkept Vas Va Vbuffer tt tt tt tt tt tt
E) None Vof Vthe Vanswers Vare Vcorrect tt tt tt tt tt
4) Which Vone Vof Vthe Vfollowing Vis Vtrue Vof VEconomic VOrder VQuantity V(EOQ)?
tt tt tt tt tt tt tt tt tt tt tt
A) The VEOQ Vapproach Vtakes Vthe Vview Vthat Vsome Vinventory Vis Vnecessary Vin
tt tt tt tt tt tt tt tt tt tt tt
order Vto Voptimize Vthe Vorder Vquantity
ttV tt tt tt tt tt
B) Is Vcalculates Vas Vthe Vsquare Vroot Vof Vthe Vfollowing: V(2 V× Vannual Vrequirement
tt tt tt tt tt tt tt tt tt tt tt tt
V× Vcost Vper Vorder) V÷ Vannual Vholding Vcost Vper Vunit
tt tt tt tt tt tt tt tt tt tt
C) The Vgraphical Vapproach Vis Vone Vmethod Vof Vcalculating VEOQ
tt tt tt tt tt tt tt tt
D) A Vmathematical Vtool Vfor Vdetermining Vthe Vorder Vquantity Vthat Vminimizes Vthe
tt tt tt tt tt tt tt tt tt tt
Vcost Vof Vordering Vand Vholding Vinventory
tt tt tt tt tt tt
1
,E) All Vof Vthe Vanswers Vare Vcorrect
tt tt tt tt tt
2
,5) Which Vof Vthe Vfollowing Vis Va Vway Vthat VJIT Vefficiencies Vare Vachieved?
tt tt tt tt tt tt tt tt tt tt tt
A) Negotiating Vlong-term Vsupply Vagreements tt tt tt
B) Eliminating Vinspections tt
C) Reducing Vthe Vnumber Vof Vvendors tt tt tt tt
D) Making Vless Vfrequent Vpayments tt tt tt
E) All Vof Vthe Vanswers Vare Vcorrect
tt tt tt tt tt
6) Inventory Vholding Vcosts Vtypically Vinclude:
tt tt tt tt
A) clerical Vcosts Vof Vpurchase-order Vpreparation.
tt tt tt tt
B) costs Vof Vdeterioration, Vtheft, Vor Vspoilage.
tt tt tt tt tt
C) costs Vassociated Vwith Vlost Vsales Vto Vcustomers.
tt tt tt tt tt tt
D) forgone Vinterest Von Vmoney Vtied Vup Vin Vinventory.
tt tt tt tt tt tt tt
E) both Vcosts Vof Vdeterioration, Vtheft, Vor Vspoilage Vand Vforgone Vinterest Von Vmoney
tt tt tt tt tt tt tt tt tt tt tt
tied Vup Vin Vinventory.
ttV tt tt tt
7) Inventory Vholding Vcosts Vwould Vtypically Vinclude Vall Vof Vthe Vfollowing Vexcept:
tt tt tt tt tt tt tt tt tt tt
A) insurance.
B) theft.
C) transportation.
D) obsolescence.
E) warehouse Vrent. tt
8) Which Vof Vthe Vfollowing Vis Vclassified Vas Van Vinventory Vshortage Vcost?
tt tt tt tt tt tt tt tt tt tt
A) Purchase Vorder Vpreparation tt tt
B) Production Vdisruption tt
C) Lost Vsales Vand Vlost Vcustomers
tt tt tt tt
D) Spoilage
E) Both Vproduction Vdisruption Vand Vlost Vsales Vand Vlost Vcustomers
tt tt tt tt tt tt tt tt
9) At Vthe Veconomic Vorder Vquantity:
tt tt tt tt
A) total Vannual Vinventory Vcosts, Vholding Vcosts, Vand Vordering Vcosts Vare Vall Vminimized.
tt tt tt tt tt tt tt tt tt tt tt
B) total Vannual Vinventory Vcosts Vand Vholding Vcosts Vare Vminimized.
tt tt tt tt tt tt tt tt
C) total Vannual Vinventory Vcosts Vare Vminimized, Vand Vholding Vcosts Vequal Vordering Vcosts.
tt tt tt tt tt tt tt tt tt tt tt
D) total Vannual Vinventory Vcosts Vare Vminimized, Vand Vholding Vcosts Vexceed Vordering
tt tt tt tt tt tt tt tt tt tt
ttV costs.
E) total Vannual Vinventory Vcosts Vare Vminimized, Vand Vordering Vcosts Vexceed Vholding
tt tt tt tt tt tt tt tt tt tt
ttV costs.
3
, 10) Langdon VEnterprises Vuses Van Veconomic Vorder Vquantity Vmodel Vand Vhas Vdetermined Van
tt tt tt tt tt tt tt tt tt tt tt
ttV optimal Vorder Vsize Vof V2,200 Vunits. VAnnual Vdemand Vis V44,000 Vunits, Vordering Vcosts
tt tt tt tt tt tt tt tt tt tt tt tt
tt Vare V$60 Vper Vorder, Vand Vholding Vcosts Vare V$6 Vper Vunit. VThe Vcompany's Vannual
tt tt tt tt tt tt tt tt tt tt tt tt tt
tt Vholding Vcosts Vtotal: tt tt
A) $13,200.
B) $14,400.
C) $485,200.
D) $265,200.
E) none Vof Vthe Vanswers Vis Vcorrect. tt tt tt tt tt
11) Langdon VEnterprises Vuses Van Veconomic Vorder Vquantity Vmodel Vand Vhas Vdetermined Van
tt tt tt tt tt tt tt tt tt tt tt
optimal Vorder Vsize Vof V500 Vunits. VAnnual Vdemand Vis V10,000 Vunits, Vordering Vcosts Vare
ttV tt tt tt tt tt tt tt tt tt tt tt tt tt
V$50 Vper Vorder, Vand Vholding Vcosts Vare V$4 Vper Vunit. VThe Vcompany's Vannual Vholding
tt tt tt tt tt tt tt tt tt tt tt tt tt tt
Vcosts Vtotal:
tt tt
A) $2,000.
B) $3,000.
C) $21,000.
D) $41,000.
E) none Vof Vthe Vanswers Vis Vcorrect. tt tt tt tt tt
12) Reflection VGraphics Vuses Va Vspecial Vpurpose Vpaper Von V80% Vof Vits Vjobs. VThe Vpaper Vis
tt tt tt tt tt tt tt tt tt tt tt tt tt tt
purchased Vin V310-sheet Vpackages Vat Va Vcost Vof V$310 Vper Vpackage. VManagement
ttV tt tt tt tt tt tt tt tt tt tt tt
Vestimates Vthat Vthe Vcost Vof Vplacing Vand Vreceiving Va Vtypical Vorder Vis V$36, Vand Vthe
tt tt tt tt tt tt tt tt tt tt tt tt tt tt tt
Vannual Vcost Vof Vcarrying Va Vpackage Vin Vinventory Vis V$3.60. VReflection VGraphics Vuses
tt tt tt tt tt tt tt tt tt tt tt tt tt
V4,700 Vpackages Vof Vpaper Veach V year. VProduction Vis Vconstant, Vand Vthe Vlead Vtime Vto
tt tt tt tt tt tt tt tt tt tt tt tt tt tt
Vreceive Van Vorder Vis Vtwo Vweek.
tt tt tt tt tt tt
The Veconomic Vorder Vquantity Vis Vapproximately:
tt tt tt tt tt
Note: VRound Vyour Vfinal Vanswer Vto Vthe Vnearest Vwhole Vnumber.
tt tt tt tt tt tt tt tt tt
A) 307 Vpackages. tt
B) 4,018 Vpackages. tt
C) 2,093 Vpackages. tt
D) 1,636 Vpackages. tt
E) 1,166 Vpackages. tt
4
tt tt tt tt tt tt tt tt tt
ENVIRONMENT, 13TH EDITION BY RONALD HILTON tt tt tt tt tt tt
ttV ttV ttV ttV ttV ttV ttV ttV ttV ttV ttV ttV ttV ttV ttV ttV ttV ttV ttV ttV ttV ttV ttV ttV ttV ttV ***with answers keys*** ttV ttV
Appendix III ttV
1) The VEOQ Vmodel Vis Va Vmathematical Vtool Vfor Vdetermining Vthe Vorder Vquantity Vthat:
tt tt tt tt tt tt tt tt tt tt tt tt
A) maximizes Vthe Vcosts Vof Vordering Vand Vholding Vinventory. tt tt tt tt tt tt tt
B) equals Vthe Vcosts Vof Vordering Vand Vholding Vinventory. tt tt tt tt tt tt tt
C) minimizes Vthe Vcosts Vof Vordering Vand Vholding Vinventory. tt tt tt tt tt tt tt
D) has Vno Veffect Von Vthe Vcosts Vof Vordering Vand Vholding
tt tt tt tt tt tt tt tt tt
inventory.
ttV
E) none Vof Vthese Vanswers Vare tt tt tt tt ttV correct.
2) Inventory Vdecisions Vinvolve Va Vdelicate Vbalance Vbetween Vwhich Vof Vthe Vfollowing
tt tt tt tt tt tt tt tt tt tt
ttV classes Vof Vcosts? tt tt
A) Ordering Vcosts, Vadvertising Vcosts, Vand Vshipping Vcosts tt tt tt tt tt tt
B) Advertising Vcosts, Vholding Vcosts, Vand Vshortage Vcosts tt tt tt tt tt tt
C) Ordering Vcosts, Vholding Vcosts, Vand Vshortage Vcosts tt tt tt tt tt tt
D) Ordering Vcosts, Vshipping Vcosts, Vand Vshortage Vcosts tt tt tt tt tt tt
E) Shipping Vcosts, Vholding Vcosts, Vand Vshortage Vcosts tt tt tt tt tt tt
3) Which Vone Vof Vthe Vfollowing Vis Vtrue Vof Va Vjust-in-time V(JIT) Vsystem?
tt tt tt tt tt tt tt tt tt tt tt
A) JIT Vsystem Vuses Va V“pull” Vapproach Vto Vcontrolling Vmanufacturing
tt tt tt tt tt tt tt tt
B) Inventory Vof Vraw Vmaterials Vand Vparts Vare Vkept Vas Va Vbuffer tt tt tt tt tt tt tt tt tt tt
C) Inventory Vof Vpartially Vcompleted Vparts Vare Vkept Vas Va Vbuffer tt tt tt tt tt tt tt tt tt
D) Finished Vgoods Vare Vkept Vas Va Vbuffer tt tt tt tt tt tt
E) None Vof Vthe Vanswers Vare Vcorrect tt tt tt tt tt
4) Which Vone Vof Vthe Vfollowing Vis Vtrue Vof VEconomic VOrder VQuantity V(EOQ)?
tt tt tt tt tt tt tt tt tt tt tt
A) The VEOQ Vapproach Vtakes Vthe Vview Vthat Vsome Vinventory Vis Vnecessary Vin
tt tt tt tt tt tt tt tt tt tt tt
order Vto Voptimize Vthe Vorder Vquantity
ttV tt tt tt tt tt
B) Is Vcalculates Vas Vthe Vsquare Vroot Vof Vthe Vfollowing: V(2 V× Vannual Vrequirement
tt tt tt tt tt tt tt tt tt tt tt tt
V× Vcost Vper Vorder) V÷ Vannual Vholding Vcost Vper Vunit
tt tt tt tt tt tt tt tt tt tt
C) The Vgraphical Vapproach Vis Vone Vmethod Vof Vcalculating VEOQ
tt tt tt tt tt tt tt tt
D) A Vmathematical Vtool Vfor Vdetermining Vthe Vorder Vquantity Vthat Vminimizes Vthe
tt tt tt tt tt tt tt tt tt tt
Vcost Vof Vordering Vand Vholding Vinventory
tt tt tt tt tt tt
1
,E) All Vof Vthe Vanswers Vare Vcorrect
tt tt tt tt tt
2
,5) Which Vof Vthe Vfollowing Vis Va Vway Vthat VJIT Vefficiencies Vare Vachieved?
tt tt tt tt tt tt tt tt tt tt tt
A) Negotiating Vlong-term Vsupply Vagreements tt tt tt
B) Eliminating Vinspections tt
C) Reducing Vthe Vnumber Vof Vvendors tt tt tt tt
D) Making Vless Vfrequent Vpayments tt tt tt
E) All Vof Vthe Vanswers Vare Vcorrect
tt tt tt tt tt
6) Inventory Vholding Vcosts Vtypically Vinclude:
tt tt tt tt
A) clerical Vcosts Vof Vpurchase-order Vpreparation.
tt tt tt tt
B) costs Vof Vdeterioration, Vtheft, Vor Vspoilage.
tt tt tt tt tt
C) costs Vassociated Vwith Vlost Vsales Vto Vcustomers.
tt tt tt tt tt tt
D) forgone Vinterest Von Vmoney Vtied Vup Vin Vinventory.
tt tt tt tt tt tt tt
E) both Vcosts Vof Vdeterioration, Vtheft, Vor Vspoilage Vand Vforgone Vinterest Von Vmoney
tt tt tt tt tt tt tt tt tt tt tt
tied Vup Vin Vinventory.
ttV tt tt tt
7) Inventory Vholding Vcosts Vwould Vtypically Vinclude Vall Vof Vthe Vfollowing Vexcept:
tt tt tt tt tt tt tt tt tt tt
A) insurance.
B) theft.
C) transportation.
D) obsolescence.
E) warehouse Vrent. tt
8) Which Vof Vthe Vfollowing Vis Vclassified Vas Van Vinventory Vshortage Vcost?
tt tt tt tt tt tt tt tt tt tt
A) Purchase Vorder Vpreparation tt tt
B) Production Vdisruption tt
C) Lost Vsales Vand Vlost Vcustomers
tt tt tt tt
D) Spoilage
E) Both Vproduction Vdisruption Vand Vlost Vsales Vand Vlost Vcustomers
tt tt tt tt tt tt tt tt
9) At Vthe Veconomic Vorder Vquantity:
tt tt tt tt
A) total Vannual Vinventory Vcosts, Vholding Vcosts, Vand Vordering Vcosts Vare Vall Vminimized.
tt tt tt tt tt tt tt tt tt tt tt
B) total Vannual Vinventory Vcosts Vand Vholding Vcosts Vare Vminimized.
tt tt tt tt tt tt tt tt
C) total Vannual Vinventory Vcosts Vare Vminimized, Vand Vholding Vcosts Vequal Vordering Vcosts.
tt tt tt tt tt tt tt tt tt tt tt
D) total Vannual Vinventory Vcosts Vare Vminimized, Vand Vholding Vcosts Vexceed Vordering
tt tt tt tt tt tt tt tt tt tt
ttV costs.
E) total Vannual Vinventory Vcosts Vare Vminimized, Vand Vordering Vcosts Vexceed Vholding
tt tt tt tt tt tt tt tt tt tt
ttV costs.
3
, 10) Langdon VEnterprises Vuses Van Veconomic Vorder Vquantity Vmodel Vand Vhas Vdetermined Van
tt tt tt tt tt tt tt tt tt tt tt
ttV optimal Vorder Vsize Vof V2,200 Vunits. VAnnual Vdemand Vis V44,000 Vunits, Vordering Vcosts
tt tt tt tt tt tt tt tt tt tt tt tt
tt Vare V$60 Vper Vorder, Vand Vholding Vcosts Vare V$6 Vper Vunit. VThe Vcompany's Vannual
tt tt tt tt tt tt tt tt tt tt tt tt tt
tt Vholding Vcosts Vtotal: tt tt
A) $13,200.
B) $14,400.
C) $485,200.
D) $265,200.
E) none Vof Vthe Vanswers Vis Vcorrect. tt tt tt tt tt
11) Langdon VEnterprises Vuses Van Veconomic Vorder Vquantity Vmodel Vand Vhas Vdetermined Van
tt tt tt tt tt tt tt tt tt tt tt
optimal Vorder Vsize Vof V500 Vunits. VAnnual Vdemand Vis V10,000 Vunits, Vordering Vcosts Vare
ttV tt tt tt tt tt tt tt tt tt tt tt tt tt
V$50 Vper Vorder, Vand Vholding Vcosts Vare V$4 Vper Vunit. VThe Vcompany's Vannual Vholding
tt tt tt tt tt tt tt tt tt tt tt tt tt tt
Vcosts Vtotal:
tt tt
A) $2,000.
B) $3,000.
C) $21,000.
D) $41,000.
E) none Vof Vthe Vanswers Vis Vcorrect. tt tt tt tt tt
12) Reflection VGraphics Vuses Va Vspecial Vpurpose Vpaper Von V80% Vof Vits Vjobs. VThe Vpaper Vis
tt tt tt tt tt tt tt tt tt tt tt tt tt tt
purchased Vin V310-sheet Vpackages Vat Va Vcost Vof V$310 Vper Vpackage. VManagement
ttV tt tt tt tt tt tt tt tt tt tt tt
Vestimates Vthat Vthe Vcost Vof Vplacing Vand Vreceiving Va Vtypical Vorder Vis V$36, Vand Vthe
tt tt tt tt tt tt tt tt tt tt tt tt tt tt tt
Vannual Vcost Vof Vcarrying Va Vpackage Vin Vinventory Vis V$3.60. VReflection VGraphics Vuses
tt tt tt tt tt tt tt tt tt tt tt tt tt
V4,700 Vpackages Vof Vpaper Veach V year. VProduction Vis Vconstant, Vand Vthe Vlead Vtime Vto
tt tt tt tt tt tt tt tt tt tt tt tt tt tt
Vreceive Van Vorder Vis Vtwo Vweek.
tt tt tt tt tt tt
The Veconomic Vorder Vquantity Vis Vapproximately:
tt tt tt tt tt
Note: VRound Vyour Vfinal Vanswer Vto Vthe Vnearest Vwhole Vnumber.
tt tt tt tt tt tt tt tt tt
A) 307 Vpackages. tt
B) 4,018 Vpackages. tt
C) 2,093 Vpackages. tt
D) 1,636 Vpackages. tt
E) 1,166 Vpackages. tt
4
