TEST BANK FOR
Managerial Accounting: Creating Value in a Dynamic Business Environment,13th Edition by Ronald
Chapter 1-17
Appendix III
1) The EOQ model is a mathematical tool for determining the order quantity that:
A) maximizes the costs of ordering and holding inventory.
B) equals the costs of ordering and holding inventory.
C) minimizes the costs of ordering and holding inventory. All Chapters ✅
D) has no effect on the costs of ordering and holding
inventory?
E) none of these answers are correct.
✅
Answers Included
2) Inventory decisions involve a delicate balance between which of the following classes of
costs?
A) Ordering costs, advertising costs, and shipping costs
B) Advertising costs, holding costs, and shortage costs
C) Ordering costs, holding costs, and shortage costs
D) Ordering costs, shipping costs, and shortage costs
E) Shipping costs, holding costs, and shortage costs
3) Which one of the following is true of a just-in-time (JIT) system?
A) JIT system uses a “pull” approach to controlling manufacturing
B) Inventory of raw materials and parts are kept as a buffer
C) Inventory of partially completed parts are kept as a buffer
D) Finished goods are kept as a buffer
E) None of the answers are correct
4) Which one of the following is true of Economic Order Quantity (EOQ)?
A) The EOQ approach takes the view that some inventory is necessary in order to
optimize the order quantity
B) Is calculates as the square root of the following: (2 × annual requirement × cost per
order) ÷ annual holding cost per unit
C) The graphical approach is one method of calculating EOQ
D) A mathematical tool for determining the order quantity that minimizes the cost of
ordering and holding inventory
E) All of the answers are correct
SCHOLARVAULT
,5) Which #nbof #nbthe #nbfollowing #nbis #nba #nbway #nbthat #nbJIT #nbefficiencies #nbare #nbachieved?
A) Negotiating #nblong-term #nbsupply #nbagreements
B) Eliminating #nbinspections
C) Reducing #nbthe #nbnumber #nbof #nbvendors
D) Making #nbless #nbfrequent #nbpayments
E) All #nbof #nbthe #nbanswers #nbare #nbcorrect
6) Inventory #nbholding #nbcosts #nbtypically #nbinclude:
A) clerical #nbcosts #nbof #nbpurchase-order #nbpreparation.
B) costs #nbof #nbdeterioration, #nbtheft, #nbor #nbspoilage.
C) costs #nbassociated #nbwith #nblost #nbsales #nbto #nbcustomers.
D) forgone #nbinterest #nbon #nbmoney #nbtied #nbup #nbin #nbinventory.
E) both #nbcosts #nbof #nbdeterioration, #nbtheft, #nbor #nbspoilage #nband #nbforgone #nbinterest #nbon
money #nbtied #nbup #nbin #nbinventory.
#nb
7) Inventory#nbholding #nbcosts #nbwould #nbtypically #nbinclude #nball #nbof #nbthe #nbfollowing #nbexcept:
A) insurance.
B) theft.
C) transportation.
D) obsolescence.
E) warehouse #nbrent.
8) Which #nbof #nbthe #nbfollowing #nbis #nbclassified #nbas #nban #nbinventory #nbshortage #nbcost?
A) Purchase #nborder #nbpreparation
B) Production #nbdisruption
C) Lost #nbsales #nband #nblost #nbcustomers
D) Spoilage
E) Both #nbproduction #nbdisruption #nband #nblost #nbsales #nband #nblost #nbcustomers
9) At #nbthe #nbeconomic #nborder #nbquantity:
A) total #nbannual #nbinventory #nbcosts, #nbholding #nbcosts, #nband #nbordering #nbcosts #nbare #nball #nbminimized.
B) total #nbannual #nbinventory #nbcosts #nband #nbholding #nbcosts #nbare #nbminimized.
C) total #nbannual #nbinventory #nbcosts #nbare #nbminimized, #nband #nbholding #nbcosts #nbequal #nbordering
costs.
#nb
D) total #nbannual #nbinventory #nbcosts #nbare #nbminimized, #nband #nbholding #nbcosts #nbexceed #nbordering
#nbcosts.
E) total #nbannual #nbinventory #nbcosts #nbare #nbminimized, #nband #nbordering #nbcosts #nbexceed #nbholding
#nbcosts.
SCHOLARVAULT
,10) Langdon #nbEnterprises #nbuses #nban #nbeconomic #nborder #nbquantity#nbmodel #nband #nbhas #nbdetermined
#nban #nboptimal #nborder #nbsize #nbof #nb2,200 #nbunits. #nbAnnual #nbdemand #nbis #nb44,000 #nbunits,
#nbordering #nbcosts #nbare #nb$60 #nbper #nborder, #nband #nbholding #nbcosts #nbare #nb$6 #nbper #nbunit. #nbThe
#nbcompany's #nbannual #nbholding #nbcosts #nbtotal:
A) $13,200.
B) $14,400.
C) $485,200.
D) $265,200.
E) none #nbof #nbthe #nbanswers #nbis #nbcorrect.
11) Langdon #nbEnterprises #nbuses #nban #nbeconomic #nborder #nbquantity #nbmodel #nband #nbhas #nbdetermined
#nban #nboptimal #nborder #nbsize #nbof #nb500 #nbunits. #nbAnnual #nbdemand #nbis #nb10,000 #nbunits, #nbordering
#nbcosts #nbare #nb$50 #nbper #nborder, #nband #nbholding #nbcosts #nbare #nb$4 #nbper #nbunit. #nbThe #nbcompany's
#nbannual #nbholding #nbcosts #nbtotal:
A) $2,000.
B) $3,000.
C) $21,000.
D) $41,000.
E) none #nbof #nbthe #nbanswers #nbis #nbcorrect.
12) Reflection #nbGraphics #nbuses #nba #nbspecial #nbpurpose #nbpaper #nbon #nb80% #nbof #nbits #nbjobs. #nbThe
#nbpaper #nbis #nbpurchased #nbin #nb310-sheet #nbpackages #nbat #nba #nbcost #nbof #nb$310 #nbper #nbpackage.
#nbManagement #nbestimates #nbthat #nbthe #nbcost #nbof #nbplacing #nband #nbreceiving #nba #nbtypical #nborder
#nbis #nb$36, #nband #nbthe #nbannual #nbcost #nbof #nbcarrying #nba #nbpackage #nbin #nbinventory #nbis #nb$3.60.
#nbReflection #nbGraphics #nbuses #nb4,700 #nbpackages #nbof #nbpaper #nbeach #nbyear. #nbProduction #nbis
#nbconstant, #nband #nbthe #nblead #nbtime #nbto #nbreceive #nban #nborder #nbis #nbtwo #nbweek.
The #nbeconomic #nborder #nbquantity#nbis #nbapproximately:
Note: #nbRound #nbyour #nbfinal #nbanswer #nbto #nbthe #nbnearest #nbwhole #nbnumber.
A) 307 #nbpackages.
B) 4,018 #nbpackages.
C) 2,093 #nbpackages.
D) 1,636 #nbpackages.
E) 1,166 #nbpackages.
SCHOLARVAULT
, 13) Reflection #nbGraphics #nbuses #nba #nbspecial #nbpurpose #nbpaper #nbon #nb80% #nbof #nbits #nbjobs. #nbThe
#nbpaper #nbis #nbpurchased #nbin #nb100-sheet #nbpackages #nbat #nba #nbcost #nbof #nb$100 #nbper #nbpackage.
#nbManagement #nbestimates #nbthat #nbthe #nbcost #nbof #nbplacing #nband #nbreceiving #nba #nbtypical #nborder
#nbis #nb$15, #nband #nbthe #nbannual #nbcost #nbof #nbcarrying #nba #nbpackage #nbin #nbinventory #nbis #nb$1.50.
#nbReflection #nbGraphics #nbuses #nb2,600 #nbpackages #nbof #nbpaper #nbeach #nbyear. #nbProduction #nbis
#nbconstant, #nband #nbthe #nblead #nbtime #nbto #nbreceive #nban #nborder #nbis #nbone #nbweek.
The #nbeconomic #nborder #nbquantity#nbis #nbapproximately:
A) 203 #nbpackages.
B) 225 #nbpackages.
C) 228 #nbpackages.
D) 565 #nbpackages.
E) 631 #nbpackages.
14) Reflection #nbGraphics #nbuses #nba #nbspecial #nbpurpose #nbpaper #nbon #nb80% #nbof #nbits #nbjobs. #nbThe
#nbpaper #nbis #nbpurchased #nbin #nb350-sheet #nbpackages #nbat #nba #nbcost #nbof #nb$350 #nbper #nbpackage.
#nbManagement #nbestimates #nbthat #nbthe #nbcost #nbof #nbplacing #nband #nbreceiving #nba #nbtypical #nborder
#nbis #nb$40, #nband #nbthe #nbannual #nbcost #nbof #nbcarrying #nba #nbpackage #nbin #nbinventory #nbis #nb$4.00.
#nbReflection #nbGraphics #nbuses #nb5,100 #nbpackages #nbof #nbpaper #nbeach #nbyear. #nbProduction #nbis
#nbconstant, #nband #nbthe #nblead #nbtime #nbto #nbreceive #nban #nborder #nbis #nbthree #nbweeks.
Note: #nbAssume #nb52 #nbweeks #nbin #nba #nbyear. #nbDo #nbnot #nbround #nbyour #nbintermediate
#nbcalculations. #nbRound #nbyour #nbfinal #nbanswer #nbto #nbnearest #nbwhole #nbdollar #nbamount.
The #nbreorder #nbpoint #nbis:
A) 147 #nbpackages.
B) 1,440 #nbpackages.
C) 5,600 #nbpackages.
D) 350 #nbpackages.
E) 294 #nbpackages.
15) Reflection #nbGraphics #nbuses #nba #nbspecial #nbpurpose #nbpaper #nbon #nb80% #nbof #nbits #nbjobs. #nbThe
#nbpaper #nbis #nbpurchased #nbin #nb100-sheet #nbpackages #nbat #nba #nbcost #nbof #nb$100 #nbper #nbpackage.
#nbManagement #nbestimates #nbthat #nbthe #nbcost #nbof #nbplacing #nband #nbreceiving #nba #nbtypical #nborder
#nbis #nb$15, #nband #nbthe #nbannual #nbcost #nbof #nbcarrying #nba #nbpackage #nbin #nbinventory #nbis #nb$1.50.
#nbReflection #nbGraphics #nbuses #nb2,600 #nbpackages #nbof #nbpaper #nbeach #nbyear. #nbProduction #nbis
#nbconstant, #nband #nbthe #nblead #nbtime #nbto #nbreceive #nban #nborder #nbis #nbone #nbweek.
The #nbreorder #nbpoint #nbis:
A) 25 #nbpackages.
B) 50 #nbpackages.
C) 100 #nbpackages.
D) 203 #nbpackages.
E) 225 #nbpackages.
SCHOLARVAULT
Managerial Accounting: Creating Value in a Dynamic Business Environment,13th Edition by Ronald
Chapter 1-17
Appendix III
1) The EOQ model is a mathematical tool for determining the order quantity that:
A) maximizes the costs of ordering and holding inventory.
B) equals the costs of ordering and holding inventory.
C) minimizes the costs of ordering and holding inventory. All Chapters ✅
D) has no effect on the costs of ordering and holding
inventory?
E) none of these answers are correct.
✅
Answers Included
2) Inventory decisions involve a delicate balance between which of the following classes of
costs?
A) Ordering costs, advertising costs, and shipping costs
B) Advertising costs, holding costs, and shortage costs
C) Ordering costs, holding costs, and shortage costs
D) Ordering costs, shipping costs, and shortage costs
E) Shipping costs, holding costs, and shortage costs
3) Which one of the following is true of a just-in-time (JIT) system?
A) JIT system uses a “pull” approach to controlling manufacturing
B) Inventory of raw materials and parts are kept as a buffer
C) Inventory of partially completed parts are kept as a buffer
D) Finished goods are kept as a buffer
E) None of the answers are correct
4) Which one of the following is true of Economic Order Quantity (EOQ)?
A) The EOQ approach takes the view that some inventory is necessary in order to
optimize the order quantity
B) Is calculates as the square root of the following: (2 × annual requirement × cost per
order) ÷ annual holding cost per unit
C) The graphical approach is one method of calculating EOQ
D) A mathematical tool for determining the order quantity that minimizes the cost of
ordering and holding inventory
E) All of the answers are correct
SCHOLARVAULT
,5) Which #nbof #nbthe #nbfollowing #nbis #nba #nbway #nbthat #nbJIT #nbefficiencies #nbare #nbachieved?
A) Negotiating #nblong-term #nbsupply #nbagreements
B) Eliminating #nbinspections
C) Reducing #nbthe #nbnumber #nbof #nbvendors
D) Making #nbless #nbfrequent #nbpayments
E) All #nbof #nbthe #nbanswers #nbare #nbcorrect
6) Inventory #nbholding #nbcosts #nbtypically #nbinclude:
A) clerical #nbcosts #nbof #nbpurchase-order #nbpreparation.
B) costs #nbof #nbdeterioration, #nbtheft, #nbor #nbspoilage.
C) costs #nbassociated #nbwith #nblost #nbsales #nbto #nbcustomers.
D) forgone #nbinterest #nbon #nbmoney #nbtied #nbup #nbin #nbinventory.
E) both #nbcosts #nbof #nbdeterioration, #nbtheft, #nbor #nbspoilage #nband #nbforgone #nbinterest #nbon
money #nbtied #nbup #nbin #nbinventory.
#nb
7) Inventory#nbholding #nbcosts #nbwould #nbtypically #nbinclude #nball #nbof #nbthe #nbfollowing #nbexcept:
A) insurance.
B) theft.
C) transportation.
D) obsolescence.
E) warehouse #nbrent.
8) Which #nbof #nbthe #nbfollowing #nbis #nbclassified #nbas #nban #nbinventory #nbshortage #nbcost?
A) Purchase #nborder #nbpreparation
B) Production #nbdisruption
C) Lost #nbsales #nband #nblost #nbcustomers
D) Spoilage
E) Both #nbproduction #nbdisruption #nband #nblost #nbsales #nband #nblost #nbcustomers
9) At #nbthe #nbeconomic #nborder #nbquantity:
A) total #nbannual #nbinventory #nbcosts, #nbholding #nbcosts, #nband #nbordering #nbcosts #nbare #nball #nbminimized.
B) total #nbannual #nbinventory #nbcosts #nband #nbholding #nbcosts #nbare #nbminimized.
C) total #nbannual #nbinventory #nbcosts #nbare #nbminimized, #nband #nbholding #nbcosts #nbequal #nbordering
costs.
#nb
D) total #nbannual #nbinventory #nbcosts #nbare #nbminimized, #nband #nbholding #nbcosts #nbexceed #nbordering
#nbcosts.
E) total #nbannual #nbinventory #nbcosts #nbare #nbminimized, #nband #nbordering #nbcosts #nbexceed #nbholding
#nbcosts.
SCHOLARVAULT
,10) Langdon #nbEnterprises #nbuses #nban #nbeconomic #nborder #nbquantity#nbmodel #nband #nbhas #nbdetermined
#nban #nboptimal #nborder #nbsize #nbof #nb2,200 #nbunits. #nbAnnual #nbdemand #nbis #nb44,000 #nbunits,
#nbordering #nbcosts #nbare #nb$60 #nbper #nborder, #nband #nbholding #nbcosts #nbare #nb$6 #nbper #nbunit. #nbThe
#nbcompany's #nbannual #nbholding #nbcosts #nbtotal:
A) $13,200.
B) $14,400.
C) $485,200.
D) $265,200.
E) none #nbof #nbthe #nbanswers #nbis #nbcorrect.
11) Langdon #nbEnterprises #nbuses #nban #nbeconomic #nborder #nbquantity #nbmodel #nband #nbhas #nbdetermined
#nban #nboptimal #nborder #nbsize #nbof #nb500 #nbunits. #nbAnnual #nbdemand #nbis #nb10,000 #nbunits, #nbordering
#nbcosts #nbare #nb$50 #nbper #nborder, #nband #nbholding #nbcosts #nbare #nb$4 #nbper #nbunit. #nbThe #nbcompany's
#nbannual #nbholding #nbcosts #nbtotal:
A) $2,000.
B) $3,000.
C) $21,000.
D) $41,000.
E) none #nbof #nbthe #nbanswers #nbis #nbcorrect.
12) Reflection #nbGraphics #nbuses #nba #nbspecial #nbpurpose #nbpaper #nbon #nb80% #nbof #nbits #nbjobs. #nbThe
#nbpaper #nbis #nbpurchased #nbin #nb310-sheet #nbpackages #nbat #nba #nbcost #nbof #nb$310 #nbper #nbpackage.
#nbManagement #nbestimates #nbthat #nbthe #nbcost #nbof #nbplacing #nband #nbreceiving #nba #nbtypical #nborder
#nbis #nb$36, #nband #nbthe #nbannual #nbcost #nbof #nbcarrying #nba #nbpackage #nbin #nbinventory #nbis #nb$3.60.
#nbReflection #nbGraphics #nbuses #nb4,700 #nbpackages #nbof #nbpaper #nbeach #nbyear. #nbProduction #nbis
#nbconstant, #nband #nbthe #nblead #nbtime #nbto #nbreceive #nban #nborder #nbis #nbtwo #nbweek.
The #nbeconomic #nborder #nbquantity#nbis #nbapproximately:
Note: #nbRound #nbyour #nbfinal #nbanswer #nbto #nbthe #nbnearest #nbwhole #nbnumber.
A) 307 #nbpackages.
B) 4,018 #nbpackages.
C) 2,093 #nbpackages.
D) 1,636 #nbpackages.
E) 1,166 #nbpackages.
SCHOLARVAULT
, 13) Reflection #nbGraphics #nbuses #nba #nbspecial #nbpurpose #nbpaper #nbon #nb80% #nbof #nbits #nbjobs. #nbThe
#nbpaper #nbis #nbpurchased #nbin #nb100-sheet #nbpackages #nbat #nba #nbcost #nbof #nb$100 #nbper #nbpackage.
#nbManagement #nbestimates #nbthat #nbthe #nbcost #nbof #nbplacing #nband #nbreceiving #nba #nbtypical #nborder
#nbis #nb$15, #nband #nbthe #nbannual #nbcost #nbof #nbcarrying #nba #nbpackage #nbin #nbinventory #nbis #nb$1.50.
#nbReflection #nbGraphics #nbuses #nb2,600 #nbpackages #nbof #nbpaper #nbeach #nbyear. #nbProduction #nbis
#nbconstant, #nband #nbthe #nblead #nbtime #nbto #nbreceive #nban #nborder #nbis #nbone #nbweek.
The #nbeconomic #nborder #nbquantity#nbis #nbapproximately:
A) 203 #nbpackages.
B) 225 #nbpackages.
C) 228 #nbpackages.
D) 565 #nbpackages.
E) 631 #nbpackages.
14) Reflection #nbGraphics #nbuses #nba #nbspecial #nbpurpose #nbpaper #nbon #nb80% #nbof #nbits #nbjobs. #nbThe
#nbpaper #nbis #nbpurchased #nbin #nb350-sheet #nbpackages #nbat #nba #nbcost #nbof #nb$350 #nbper #nbpackage.
#nbManagement #nbestimates #nbthat #nbthe #nbcost #nbof #nbplacing #nband #nbreceiving #nba #nbtypical #nborder
#nbis #nb$40, #nband #nbthe #nbannual #nbcost #nbof #nbcarrying #nba #nbpackage #nbin #nbinventory #nbis #nb$4.00.
#nbReflection #nbGraphics #nbuses #nb5,100 #nbpackages #nbof #nbpaper #nbeach #nbyear. #nbProduction #nbis
#nbconstant, #nband #nbthe #nblead #nbtime #nbto #nbreceive #nban #nborder #nbis #nbthree #nbweeks.
Note: #nbAssume #nb52 #nbweeks #nbin #nba #nbyear. #nbDo #nbnot #nbround #nbyour #nbintermediate
#nbcalculations. #nbRound #nbyour #nbfinal #nbanswer #nbto #nbnearest #nbwhole #nbdollar #nbamount.
The #nbreorder #nbpoint #nbis:
A) 147 #nbpackages.
B) 1,440 #nbpackages.
C) 5,600 #nbpackages.
D) 350 #nbpackages.
E) 294 #nbpackages.
15) Reflection #nbGraphics #nbuses #nba #nbspecial #nbpurpose #nbpaper #nbon #nb80% #nbof #nbits #nbjobs. #nbThe
#nbpaper #nbis #nbpurchased #nbin #nb100-sheet #nbpackages #nbat #nba #nbcost #nbof #nb$100 #nbper #nbpackage.
#nbManagement #nbestimates #nbthat #nbthe #nbcost #nbof #nbplacing #nband #nbreceiving #nba #nbtypical #nborder
#nbis #nb$15, #nband #nbthe #nbannual #nbcost #nbof #nbcarrying #nba #nbpackage #nbin #nbinventory #nbis #nb$1.50.
#nbReflection #nbGraphics #nbuses #nb2,600 #nbpackages #nbof #nbpaper #nbeach #nbyear. #nbProduction #nbis
#nbconstant, #nband #nbthe #nblead #nbtime #nbto #nbreceive #nban #nborder #nbis #nbone #nbweek.
The #nbreorder #nbpoint #nbis:
A) 25 #nbpackages.
B) 50 #nbpackages.
C) 100 #nbpackages.
D) 203 #nbpackages.
E) 225 #nbpackages.
SCHOLARVAULT
