AIS QUIZ 6

Batch processing creates a homogeneous product through a continuous

series of standard procedures.

True
False
The bill of materials specifies the quantities of the direct labor used in
producing a single unit of finished product.

True
False
Reports generated by the cost accounting system does not include
performance reports and budget reports.

True
False
The philosophy of customer satisfaction permeates the world-class firm.

True
False
A purchase requisition does not necessarily authorize the storekeeper to
release materials to individuals or work centers in the production process.

True
False
The objective of the Economic Order Quantity model is to reduce total
inventory costs by minimizing carrying costs and ordering costs.

True
False
The SAP R/3 system organizes business processes into four categories:
financial, logistics, human resources, and business process support.

True
False
Move tickets authorize the storekeeper to release materials to work centers.

True
False
The work-in-process file is the subsidiary ledger for the work-in-process
control account.

True
False
The cost accounting system accounts for the release of raw materials into
production.

True
False
The purpose of the cost accounting system is to

a. authorize release of raw materials

b. produce information for inventory valuation
c. direct the movement of work-in-process
d. determine material requirements
An example of a continuous process is the production of

a. milk products
b. wedding invitations
c. jet aircraft
d. all of the above
A move ticket

a. records the work done in each work center

b. is the formal plan and authority to begin production
c. specifies the materials and production required for each batch
d. authorizes the storekeeper to release materials to work centers
Which item does not describe a world-class company?

a. the goal of a world-class company is to delight its customers

b. world-class companies work in cross-functional teams
c. customers in a world-class company are external departments only
d. a world-class company has a flat organizational structure
Which subsystem is not a part of the production system?

a. monitoring the flow of cost information related to production

b. directing the movement of work through the process
c. determining raw material requirements
 d. authorizing work to be performed
When determining which items to produce, a firm must know

a. the sales forecast

b. last year’s production level
c. raw material inventory levels
d. the standard cost of the item
Which process creates a homogeneous product through a continuous series
of standard procedures?

a. batch process
b. make-to-order process
c. none of the above
d. continuous process
The production schedule is

a. the expected demand for the firm’s finished goods for a given year
b. a description of the type and quantity of raw materials and subassemblies used
to produce a single unit of finished product
c. the formal plan and authority to begin production
d. the sequence of operations during manufacturing
Which of the following is not an assumption of the Economic Order Quantity
model?

a. total cost per year of placing orders is fixed

b. demand for the product is known with certainty
c. lead time is known and is constant
d. there are no quantity discounts
Inventory control performs all of the following tasks except it

a. prepares a materials requisition for each production batch

b. provides production planning and control with the inventory status report of
finished goods
c. updates the raw material inventory records
d. records the completed production as an increase to finished goods inventory
The storekeeper releases raw materials based on the

a. production schedule
b. work order
 c. materials requisition
d. bill of materials
All of the following are characteristics of batch processing except

a. each item in the batch is similar

b. batches are produced to replenish depleted inventory levels
c. setting up and retooling is required for different batches
d. batches are produced in accordance with detailed customer specifications
The SAP R/3 system provides pre-defined modules to support business
processes in the all of the following categories except

a. human resources
b. business process support
c. financial
d. strategic
Firms hold safety stock to compensate for

a. mathematical weaknesses of the Economic Order Quantity model

b. fluctuations in carrying costs
c. uncertainty in the estimation of ordering costs
b. variations in lead time or daily demand
What is the economic order quantity if the annual demand is 10,000 units, set
up cost of placing each order is $3 and the holding cost per unit per year is
$2?

a. 123
b. 245
c. 174
d. none of the above
If the daily demand is 40 units and the lead time is 12 days, the reorder point
is

a. 480 units
b. 52 units
c. 48 units
d. none of the above
The internal control significance of the excess materials requisition is that it

a. indicates the amount of material released to work centers

 b. indicates the standard quantities required for production
c. documents the return to raw materials inventory of unused production materials
d. identifies materials used in production that exceed the standard amount allowed
Which statement is not correct?

a. cost accounting updates the cost record with data gathered from the materials
requisition
b. general ledger posts summary information about the manufacturing process
based on a journal voucher prepared by cost accounting
c. general ledger creates a new cost record upon receipt of a work order from
production planning and control
d. cost accounting computes variances and applies overhead to individual cost
records
Which of the following is not a category of critical success factors in most
manufacturing companies?

a. product quality
b. customer service
c. resource management
d. revenue generation
Computer integrated manufacturing groups all of the following technologies
except

a. materials requirements planning

b. robotics
c. automated storage and retrieval systems
d. computer aided design