Test Bank Managerial Accounting: Creating Value in a Dynamic Business
ii ii ii ii ii ii ii ii ii
Environment, 13th Edition by Ronald Hilton
ii ii ii ii ii ii
Appendix III ii
1) The iiEOQ iimodel iiis iia iimathematical iitool iifor iidetermining iithe iiorder iiquantity iithat:
A) maximizes iithe iicosts iiof iiordering iiand iiholding iiinventory.
B) equals iithe iicosts iiof iiordering iiand iiholding iiinventory.
C) minimizes iithe iicosts iiof iiordering iiand iiholding All Chapters
ii
inventory.
ii
D) has iino iieffect iion iithe iicosts iiof iiordering iiand iiholding
iiinventory.
E) none iiof iithese iianswers iiare
Answers iiIncluded
iicorrect.
2) Inventory iidecisions iiinvolve iia iidelicate iibalance iibetween iiwhich iiof iithe
following iiclasses iiof iicosts?
ii
A) Ordering iicosts, iiadvertising iicosts, iiand iishipping iicosts
B) Advertising iicosts, iiholding iicosts, iiand iishortage iicosts
C) Ordering iicosts, iiholding iicosts, iiand iishortage iicosts
D) Ordering iicosts, iishipping iicosts, iiand iishortage iicosts
E) Shipping iicosts, iiholding iicosts, iiand iishortage iicosts
3) Which iione iiof iithe iifollowing iiis iitrue iiof iia iijust-in-time ii(JIT) iisystem?
A) JIT iisystem iiuses iia ii“pull” iiapproach iito iicontrolling iimanufacturing
B) Inventory iiof iiraw iimaterials iiand iiparts iiare iikept iias iia iibuffer
C) Inventory iiof iipartially iicompleted iiparts iiare iikept iias iia iibuffer
D) Finished iigoods iiare iikept iias iia iibuffer
E) None iiof iithe iianswers iiare iicorrect
4) Which iione iiof iithe iifollowing iiis iitrue iiof iiEconomic iiOrder iiQuantity ii(EOQ)?
A) The iiEOQ iiapproach iitakes iithe iiview iithat iisome iiinventory iiis iinecessary
iiin iiorder iito iioptimize iithe iiorder iiquantity
B) Is iicalculates iias iithe iisquare iiroot iiof iithe iifollowing: ii(2 ii× iiannual
iirequirement ii× ii cost iiper iiorder) ii÷ iiannual iiholding iicost iiper iiunit
C) The iigraphical iiapproach iiis iione iimethod iiof iicalculating iiEOQ
D) A iimathematical iitool iifor iidetermining iithe iiorder iiquantity iithat
iiminimizes iithe iicost iiof iiordering iiand iiholding iiinventory
E) All iiof iithe iianswers iiare iicorrect
1
,5) Which iiof iithe iifollowing iiis iia iiway iithat iiJIT iiefficiencies iiare iiachieved?
A) Negotiating iilong-term iisupply iiagreements
B) Eliminating iiinspections
C) Reducing iithe iinumber iiof iivendors
D) Making iiless iifrequent iipayments
E) All iiof iithe iianswers iiare iicorrect
6) Inventory iiholding iicosts iitypically iiinclude:
A) clerical iicosts iiof iipurchase-order iipreparation.
B) costs iiof iideterioration, iitheft, iior iispoilage.
C) costs iiassociated iiwith iilost iisales iito iicustomers.
D) forgone iiinterest iion iimoney iitied iiup iiin iiinventory.
E) both iicosts iiof iideterioration, iitheft, iior iispoilage iiand iiforgone iiinterest iion
money iitied iiup iiin iiinventory.
ii
7) Inventory iiholding iicosts iiwould iitypically iiinclude iiall iiof iithe iifollowing iiexcept:
A) insurance.
B) theft.
C) transportation.
D) obsolescence.
E) warehouse iirent.
8) Which iiof iithe iifollowing iiis iiclassified iias iian iiinventory iishortage iicost?
A) Purchase iiorder iipreparation
B) Production iidisruption
C) Lost iisales iiand iilost iicustomers
D) Spoilage
E) Both iiproduction iidisruption iiand iilost iisales iiand iilost iicustomers
9) At iithe iieconomic iiorder iiquantity:
A) total iiannual iiinventory iicosts, iiholding iicosts, iiand iiordering iicosts iiare iiall
minimized.
ii
B) total iiannual iiinventory iicosts iiand iiholding iicosts iiare iiminimized.
C) total iiannual iiinventory iicosts iiare iiminimized, iiand iiholding iicosts iiequal iiordering
iicosts.
D) total iiannual iiinventory iicosts iiare iiminimized, iiand iiholding iicosts iiexceed iiordering
2
, iicosts.
E) total iiannual iiinventory iicosts iiare iiminimized, iiand iiordering iicosts iiexceed iiholding
iicosts.
3
, 10) Langdon iiEnterprises iiuses iian iieconomic iiorder iiquantity iimodel iiand iihas
iidetermined iian iioptimal iiorder iisize iiof ii2,200 iiunits. iiAnnual iidemand iiis ii44,000
iiunits, iiordering iicosts iiare ii$60 iiper ii order, iiand iiholding iicosts iiare ii$6 iiper iiunit.
iiThe iicompany's iiannual ii holding iicosts iitotal:
A) $13,200.
B) $14,400.
C) $485,200.
D) $265,200.
E) none iiof iithe iianswers iiis iicorrect.
11) Langdon iiEnterprises iiuses iian iieconomic iiorder iiquantity iimodel iiand iihas
iidetermined iian iioptimal iiorder iisize iiof ii500 iiunits. iiAnnual iidemand iiis ii10,000 iiunits,
iiordering iicosts iiare ii$50 iiper iiorder, iiand iiholding iicosts iiare ii$4 iiper iiunit. iiThe
iicompany's iiannual iiholding iicosts ii total:
A) $2,000.
B) $3,000.
C) $21,000.
D) $41,000.
E) none iiof iithe iianswers iiis iicorrect.
12) Reflection iiGraphics iiuses iia iispecial iipurpose iipaper iion ii80% iiof iiits iijobs. iiThe iipaper
iiis iipurchased iiin ii310-sheet iipackages iiat iia iicost iiof ii$310 iiper iipackage.
iiManagement iiestimates ii that iithe ii cost iiof ii placing iiand iireceiving iia iitypical iiorder
iiis ii$36, iiand iithe iiannual iicost ii of iicarrying iia iipackage iiin iiinventory iiis ii$3.60.
iiReflection iiGraphics iiuses ii4,700 iipackages iiof iipaper iieach iiyear. iiProduction iiis
iiconstant, iiand iithe iilead iitime iito iireceive iian iiorder iiis iitwo iiweek.
The iieconomic iiorder iiquantity iiis iiapproximately:
Note: iiRound iiyour iifinal iianswer iito iithe iinearest iiwhole iinumber.
A) 307 iipackages.
B) 4,018 iipackages.
C) 2,093 iipackages.
D) 1,636 iipackages.
E) 1,166 iipackages.
4
ii ii ii ii ii ii ii ii ii
Environment, 13th Edition by Ronald Hilton
ii ii ii ii ii ii
Appendix III ii
1) The iiEOQ iimodel iiis iia iimathematical iitool iifor iidetermining iithe iiorder iiquantity iithat:
A) maximizes iithe iicosts iiof iiordering iiand iiholding iiinventory.
B) equals iithe iicosts iiof iiordering iiand iiholding iiinventory.
C) minimizes iithe iicosts iiof iiordering iiand iiholding All Chapters
ii
inventory.
ii
D) has iino iieffect iion iithe iicosts iiof iiordering iiand iiholding
iiinventory.
E) none iiof iithese iianswers iiare
Answers iiIncluded
iicorrect.
2) Inventory iidecisions iiinvolve iia iidelicate iibalance iibetween iiwhich iiof iithe
following iiclasses iiof iicosts?
ii
A) Ordering iicosts, iiadvertising iicosts, iiand iishipping iicosts
B) Advertising iicosts, iiholding iicosts, iiand iishortage iicosts
C) Ordering iicosts, iiholding iicosts, iiand iishortage iicosts
D) Ordering iicosts, iishipping iicosts, iiand iishortage iicosts
E) Shipping iicosts, iiholding iicosts, iiand iishortage iicosts
3) Which iione iiof iithe iifollowing iiis iitrue iiof iia iijust-in-time ii(JIT) iisystem?
A) JIT iisystem iiuses iia ii“pull” iiapproach iito iicontrolling iimanufacturing
B) Inventory iiof iiraw iimaterials iiand iiparts iiare iikept iias iia iibuffer
C) Inventory iiof iipartially iicompleted iiparts iiare iikept iias iia iibuffer
D) Finished iigoods iiare iikept iias iia iibuffer
E) None iiof iithe iianswers iiare iicorrect
4) Which iione iiof iithe iifollowing iiis iitrue iiof iiEconomic iiOrder iiQuantity ii(EOQ)?
A) The iiEOQ iiapproach iitakes iithe iiview iithat iisome iiinventory iiis iinecessary
iiin iiorder iito iioptimize iithe iiorder iiquantity
B) Is iicalculates iias iithe iisquare iiroot iiof iithe iifollowing: ii(2 ii× iiannual
iirequirement ii× ii cost iiper iiorder) ii÷ iiannual iiholding iicost iiper iiunit
C) The iigraphical iiapproach iiis iione iimethod iiof iicalculating iiEOQ
D) A iimathematical iitool iifor iidetermining iithe iiorder iiquantity iithat
iiminimizes iithe iicost iiof iiordering iiand iiholding iiinventory
E) All iiof iithe iianswers iiare iicorrect
1
,5) Which iiof iithe iifollowing iiis iia iiway iithat iiJIT iiefficiencies iiare iiachieved?
A) Negotiating iilong-term iisupply iiagreements
B) Eliminating iiinspections
C) Reducing iithe iinumber iiof iivendors
D) Making iiless iifrequent iipayments
E) All iiof iithe iianswers iiare iicorrect
6) Inventory iiholding iicosts iitypically iiinclude:
A) clerical iicosts iiof iipurchase-order iipreparation.
B) costs iiof iideterioration, iitheft, iior iispoilage.
C) costs iiassociated iiwith iilost iisales iito iicustomers.
D) forgone iiinterest iion iimoney iitied iiup iiin iiinventory.
E) both iicosts iiof iideterioration, iitheft, iior iispoilage iiand iiforgone iiinterest iion
money iitied iiup iiin iiinventory.
ii
7) Inventory iiholding iicosts iiwould iitypically iiinclude iiall iiof iithe iifollowing iiexcept:
A) insurance.
B) theft.
C) transportation.
D) obsolescence.
E) warehouse iirent.
8) Which iiof iithe iifollowing iiis iiclassified iias iian iiinventory iishortage iicost?
A) Purchase iiorder iipreparation
B) Production iidisruption
C) Lost iisales iiand iilost iicustomers
D) Spoilage
E) Both iiproduction iidisruption iiand iilost iisales iiand iilost iicustomers
9) At iithe iieconomic iiorder iiquantity:
A) total iiannual iiinventory iicosts, iiholding iicosts, iiand iiordering iicosts iiare iiall
minimized.
ii
B) total iiannual iiinventory iicosts iiand iiholding iicosts iiare iiminimized.
C) total iiannual iiinventory iicosts iiare iiminimized, iiand iiholding iicosts iiequal iiordering
iicosts.
D) total iiannual iiinventory iicosts iiare iiminimized, iiand iiholding iicosts iiexceed iiordering
2
, iicosts.
E) total iiannual iiinventory iicosts iiare iiminimized, iiand iiordering iicosts iiexceed iiholding
iicosts.
3
, 10) Langdon iiEnterprises iiuses iian iieconomic iiorder iiquantity iimodel iiand iihas
iidetermined iian iioptimal iiorder iisize iiof ii2,200 iiunits. iiAnnual iidemand iiis ii44,000
iiunits, iiordering iicosts iiare ii$60 iiper ii order, iiand iiholding iicosts iiare ii$6 iiper iiunit.
iiThe iicompany's iiannual ii holding iicosts iitotal:
A) $13,200.
B) $14,400.
C) $485,200.
D) $265,200.
E) none iiof iithe iianswers iiis iicorrect.
11) Langdon iiEnterprises iiuses iian iieconomic iiorder iiquantity iimodel iiand iihas
iidetermined iian iioptimal iiorder iisize iiof ii500 iiunits. iiAnnual iidemand iiis ii10,000 iiunits,
iiordering iicosts iiare ii$50 iiper iiorder, iiand iiholding iicosts iiare ii$4 iiper iiunit. iiThe
iicompany's iiannual iiholding iicosts ii total:
A) $2,000.
B) $3,000.
C) $21,000.
D) $41,000.
E) none iiof iithe iianswers iiis iicorrect.
12) Reflection iiGraphics iiuses iia iispecial iipurpose iipaper iion ii80% iiof iiits iijobs. iiThe iipaper
iiis iipurchased iiin ii310-sheet iipackages iiat iia iicost iiof ii$310 iiper iipackage.
iiManagement iiestimates ii that iithe ii cost iiof ii placing iiand iireceiving iia iitypical iiorder
iiis ii$36, iiand iithe iiannual iicost ii of iicarrying iia iipackage iiin iiinventory iiis ii$3.60.
iiReflection iiGraphics iiuses ii4,700 iipackages iiof iipaper iieach iiyear. iiProduction iiis
iiconstant, iiand iithe iilead iitime iito iireceive iian iiorder iiis iitwo iiweek.
The iieconomic iiorder iiquantity iiis iiapproximately:
Note: iiRound iiyour iifinal iianswer iito iithe iinearest iiwhole iinumber.
A) 307 iipackages.
B) 4,018 iipackages.
C) 2,093 iipackages.
D) 1,636 iipackages.
E) 1,166 iipackages.
4
