Deck 14: The Production Cycle

Question 1

The operations list shows

A) the labor and machine requirements.
B) the steps and operations in the production cycle.
C) the time expected to complete each step or operation.
D) all of the above

Answer 1

D

Question 2

Direct labor must be tracked and accounted for as part of the production process.Traditionally,direct labor was tracked using ________ but an AIS enhancement is to use ________ to record and track direct labor costs.

A) job-time tickets; coded identification cards
B) move tickets; coded identification cards
C) employee earnings records; job-time tickets
D) time cards; electronic time entry terminals

Answer 2

A

Question 3

Yasamin Roshni owns and operates a small deli in Miami,Florida..She maintains a file that lists the steps required to make each of her famous subs.These step-by-step instructions are examples of a(n)

A) operations list.
B) bill of materials.
C) production order.
D) materials requisition.

Answer 3

A

Question 4

The AIS compiles and feeds information among the business cycles.What is the relationship between the revenue and production cycles regarding the exchange of information?

A) The revenue cycle provides sales forecast and customer order information to the production cycle, but the production cycle sends information back to revenue about finished goods production.
B) The revenue cycle receives information from the production cycle about raw materials needs.
C) The production cycle sends cost of goods manufactured information back to the revenue cycle.
D) The production cycle does not exchange information with the revenue cycle.

Question 5

What is the main difference between MRP-II and JIT manufacturing systems?

A) The length of the planning horizon
B) JIT uses long-term customer demand for planning purposes, but MRP-II uses short-term customer demand for planning purposes.
C) MRP-II relies on EDI, but JIT does not.
D) There are no significant differences between MRP-II and JIT.

Question 6

________ is an efficient way to track and process information about raw materials used in production.

A) A just-in-time inventory system
B) Identifying materials with bar codes or RFID tags
C) A materials resources planning inventory system
D) Job-order costing

Question 7

Yasamin Roshni owns and operates a small deli in Miami,Florida.She maintains a file that contains the ingredients used to make each of her famous subs.The ingredients needed to make a specific sub are most similar to a(n)

A) operations list.
B) production order.
C) bill of materials.
D) materials requisition.

Question 8

The ________ authorizes the transfer of raw materials from the storeroom to the production floor.

A) bill of materials
B) production order
C) materials requisition
D) move ticket

Question 9

The use of various forms of information technology in the production process is referred to as

A) computerized investments and machines.
B) computerized integration of machines.
C) computer-integrated manufacturing.
D) computer intense manufacturing.

Question 10

"Push manufacturing" is also known as

A) manufacturing resource planning (MRP).
B) just-in-time manufacturing system (JIT).
C) the economic order quantity (EOQ) system.
D) ahead-of-time production implementation (ATPI).

Question 11

The ________ is the production cycle document that specifies the quantity of each product to be produced and when production should begin.

A) receiving report
B) bill of lading
C) master production schedule
D) operations list

Question 12

"Pull manufacturing" is also known as

A) manufacturing resource planning (MRP).
B) just-in-time manufacturing system (JIT).
C) the economic order quantity (EOQ) system.
D) ahead-of-time production implementation (ATPI).

Question 13

The production cycle differs from the revenue and expenditure cycles for all the following reasons except

A) cost accounting is involved in all activities.
B) not all organizations have a production cycle.
C) there are no direct external data sources or destinations.
D) very little technology exists to make activities more efficient.

Question 14

Using technology such as robots and computer-controlled machinery to shift from mass production to custom order manufacturing is referred to as

A) computer integrated manufacturing (CIM).
B) lean manufacturing.
C) Six Sigma.
D) computer-aided design (CAD).

Question 15

A master production schedule is used to develop detailed

A) timetables of daily production and determine raw material needs.
B) reports on daily production and material usage.
C) daily reports on direct labor needs.
D) inventory charts.

Question 16

How does an MRP inventory system reduces inventory levels?

A) by reducing the uncertainty regarding when materials are needed
B) by receiving materials exactly when needed and in exact quantities
C) by computing the exact costs of purchasing and carrying inventory
D) none of the above

Question 17

Identify a key feature associated with materials requirements planning.

A) determining economic order quantity for all materials
B) minimizing or eliminating carrying and stockout costs
C) determining the optimal reorder points for all materials
D) reducing required inventory levels by scheduling production, rather than estimating needs

Question 18

What information is necessary to create the master production schedule?

A) engineering department specifications and inventory levels
B) engineering department specifications and sales forecasts
C) special orders information and engineering department specifications
D) sales forecasts, special orders information, and inventory levels

Question 19

Yasamin Roshni owns and operates a small deli in Miami,Florida.Each morning she prepares a list that describes the quantity and variety subs that will be prepared during the day.This list is an example of a(n)

A) bill of materials.
B) operations list.
C) materials requisition.
D) production order.

Question 20

Which of the following is not a product design objective?

A) Design a product that meets customer requirements.
B) Design a quality product.
C) Minimize production costs.
D) Make the design easy to track for cost accounting purposes.

Question 21

This document appears to be a

A) Materials Requisition.
B) Production Order.
C) Bill of Materials.
D) Move Ticket between production and warehouse functions.

Question 22

Yasamin Roshni owns and operates a small deli in Miami,Florida.Each afternoon,she prepares a shopping list that describes the quantity and variety of ingredients that she will purchase in the evening from her wholesaler.The shopping list is an example of a(n)

A) bill of materials.
B) materials requisition.
C) operations list.
D) production order.

Question 23

For replacement of inventories and assets destroyed by fire or other disasters,an organization needs

A) stand-by facilities.
B) adequate insurance coverage.
C) source data automation.
D) All of the above are correct.

Question 24

How can CAD software help improve the efficiency and effectiveness of the product design process?

A) It can eliminate the costs associated with creating and destroying physical prototypes.
B) It can simulate how new products will be manufactured.
C) It can store all the data associated with all products.
D) All of the above

Question 25

Labor productivity is measured by the quantity produced divided by the labor time required to produce it.All other things held constant,an increase in labor productivity will increase throughput by

A) increasing productive capacity.
B) increasing productive processing time.
C) increasing yield.
D) increasing all components of throughput.

Question 26

The best control procedure for accurate data entry is

A) the use of on-line terminals.
B) an access control matrix.
C) passwords and user IDs.
D) automation of data collection.

Question 27

Sule Technologies initiated a just-in-time inventory system in 2013.Now the production manager,Chan Ziaou,wants to apply the same principles to the entire production process.His recommendation is that Sule adopt a

A) master production scheduling system.
B) lean manufacturing system.
C) manufacturing resource planning system.
D) computer-integrated manufacturing system.

Question 28

Which process or activity relates to overproduction?

A) product design
B) planning and scheduling
C) production operations
D) cost accounting

Question 29

What issue did Airbus encounter when using CAD software to help design the A380 Superjumbo airliner?

A) The actual A380 was heavier than the CAD model.
B) The actual A380 was not able to carry as much weight as the CAD model.
C) Design teams used different versions of the same CAD software, resulting in key information loss.
D) The CAD software was not advanced enough to help design the A380.

Question 30

Identify and discuss the two documents that are the result of product design activities.

Question 31

Gulshan Parvana operates a machine shop in Istanbul,Turkey.She places bids on small projects in the metropolitan area.Which of the following is most likely to be a cost driver that should be considered when determining how to allocate utility costs?

A) number of projects completed
B) number of units produced
C) number of labor hours
D) sales revenue

Question 32

MRP-II is to MRP,as lean manufacturing is to

A) EOQ.
B) JIT.
C) push manufacturing.
D) reorder point.

Question 33

Explain what CIM means and its benefits.

Question 34

Sule Technologies installed a new production monitoring system that will reduce system breakdowns by 35%.The new system will increase throughput by

A) increasing productive capacity.
B) increasing yield.
C) increasing productive processing time.
D) increasing all components of throughput.

Question 35

An organization can implement which of the following controls to reduce the threat of inventory theft or damage?

A) review and approval of fixed asset acquisitions
B) improved and more timely reporting
C) better production and planning systems
D) document all movement of inventory through the production process

Question 36

How can PLM software improve the efficiency and effectiveness of the product design process?

A) It can eliminate the costs associated with creating and destroying physical prototypes.
B) It can simulate how new products will be manufactured.
C) It can store all the data associated with all products.
D) All of the above

Question 37

How many side panels should the company budget for use in week two?
Bill of Materials

Question 38

What specific control can help restrict the rights of authorized users to only the portion of a database needed to complete their specific job duties?

A) an access control matrix
B) passwords and user IDs
C) closed-loop verification
D) specific authorization

Question 39

Identify and discuss the two common methods of production planning.

Question 40

How many labor hours should the company budget in week three to produce all side panels needed? Round to the nearest hour,if necessary.
Bill of Materials

Question 41

Which type of information below should not be maintained by the AIS in accounting for fixed assets?

A) identification/serial number
B) cost
C) improvements
D) market value

Question 42

What is the primary drawback to using a volume-driven base,such as direct labor or machine hours,to apply overhead to products in a traditional cost accounting system?

A) The cost accountant may not fully understand how to track direct labor or machine hours.
B) It is difficult for an AIS to incorporate such a measurement into its system.
C) It is difficult for an ERP to incorporate such a measurement into its integrated system.
D) Many overhead costs are incorrectly allocated to products since they do not vary with production volume.

Question 43

________ costs are expenses associated with quality assurance activities.

A) Prevention
B) Inspection
C) Internal failure
D) External failure

Question 44

The risks associated with over-production are likely of greatest concern to which company below?

A) a cereal manufacturer
B) a manufacturer that produces designer clothing
C) a manufacturer of printer paper
D) a mailbox manufacturer

Question 45

Which of the following organization controls should be implemented and maintained to counteract the general threat that the loss of production data will greatly slow or halt production activity?

A) Store key master inventory and production order files on-site only to prevent their theft.
B) Back up data files only after a production run has been physically completed.
C) Access controls should apply to all terminals within the organization.
D) Allow access to inventory records from any terminal within the organization to provide efficient data entry.

Question 46

The threat of loss of data exposes the company to

A) the loss of assets.
B) ineffective decision making.
C) inefficient manufacturing.
D) All of the above are correct.

Question 47

In addition to identifying and dealing with defective products before they reach customers,quality management is concerned with initiating process changes that will reduce the number of defective units produced.All other things held constant,a decrease in the number of defective units will increase throughput by

A) increasing productive capacity.
B) increasing productive processing time.
C) increasing yield.
D) increasing all components of throughput.

Question 48

Which objective listed below is not a cost accounting objective for the production cycle?

A) Provide information for planning, controlling, and evaluating the performance of production operations.
B) Provide cost data about products used in pricing and product mix decisions.
C) Collect and process the information used to calculate inventory and cost of goods sold amounts that appear in the financial statements.
D) Provide tests of audit control functions as part of the AIS.

Question 49

Identify one control that can be used to mitigate the threat of under-production.

A) production planning systems
B) analysis of warranty and repair costs
C) encryption
D) insurance

Question 50

The VP of Manufacturing at Roshanak Incorporated wants to buy a new die cast machine for production.The die cast machine is expected to cost around $1,000,000.Which document will most likely be used to solicit bids from suppliers?

A) RFP
B) eVoice
C) RFJ
D) RFB

Question 51

The expenses associated with the use of clean rooms in the production of computer hard drives are ________ costs.

A) prevention
B) inspection
C) internal failure
D) external failure

Question 52

To control for risks associated with the threat of inventory loss,who should have primary responsibility for work-in-process inventories?

A) a factory supervisor
B) the inventory stores department
C) purchasing
D) the receiving department

Question 53

Describe five threats in the production cycle and the applicable control procedures used to mitigate each threat.

Question 54

Identify one control that can be used to mitigate the threat of poor product design that results in excess costs.

A) production planning systems
B) analysis of warranty and repair costs
C) encryption
D) insurance

Question 55

The acronym "RFP" stands for what?

A) Request for Project
B) Request for Processing
C) Request for Proposal
D) Request for Purchase

Question 56

The expenses associated with disposal of defective products are ________ costs.

A) prevention
B) inspection
C) internal failure
D) external failure

Question 57

The expenses associated with a product recall are ________ costs.

A) prevention
B) inspection
C) internal failure
D) external failure

Question 58

Discuss two measures that can address the threats of inefficiencies and quality controls problems.

Question 59

________ identifies costs with the corporation's strategy for production of goods and services.

A) Activity-based costing
B) Job-order costing
C) Process costing
D) Manufacturing costing

Question 60

Detailed data about reasons for warranty and repair costs is considered an applicable control used to mitigate the threat of

A) underproduction.
B) overproduction.
C) poor product design.
D) suboptimal investment of fixed assets.

Question 61

Identify the cost below most likely to be classified as manufacturing overhead.

A) production workers' pay
B) raw materials used in production
C) insurance
D) none of the above

Question 62

Elif Package Delivery determines the cost per delivery by averaging total cost over the number of deliveries.What costing approach does Elif Package Delivery use?

A) unit-based
B) job-order
C) process
D) activity-based

Question 63

Which of the following is not a benefit of activity-based costing?

A) lower cost
B) better decisions
C) improved cost management
D) identification of cost drivers

Question 64

What are the two major types of cost accounting systems and what are the differences between the two?

Question 65

Manufacturing overhead is best described as

A) costs that cannot be traced directly to specific jobs or processes.
B) costs that are economically feasible to trace directly to specific jobs or processes.
C) costs that are not economically feasible to trace directly to specific jobs or processes.
D) costs that management has decided not to trace directly to specific jobs or processes.

Question 66

In activity-based costing,expenses associated with the purchase of health care insurance for employees are ________ overhead.

A) batch-related
B) product-related
C) company wide
D) expenditure-based

Question 67

In an Activity-Based Costing (ABC)system,a cause-and-effect relationship is known as a

A) cost stimulator.
B) overhead stimulator.
C) cost driver.
D) cost catalyst.

Question 68

At the end of each production run,preventive maintenance is done on the assembly line.The expenses associated with this maintenance are ________ overhead.

A) batch-related
B) product-related
C) company wide
D) department-based

Question 69

What does the first term in the throughput formula,productive capacity,represent?

A) the maximum number of units that can be produced given current technology
B) the percentage of total production time used to manufacture a product
C) the percentage of "good" units produced given current technology
D) the percentage of "bad" units produced given current technology

Question 70

What is activity-based costing (ABC)? How does it compare with the traditional costing methods? What are the benefits of activity-based costing?

Question 71

What role does the AIS play in the production cycle?

Question 72

Discuss the criticisms of traditional cost accounting methods.

Question 73

Elif Package Delivery determines the cost per delivery by summing the average cost of loading,unloading,transporting,and maintenance.What costing approach does Elif Package Delivery use?

A) job-order
B) unit-based
C) process
D) activity-based

Question 74

________ are incurred to ensure that products are created without defects the first time.

A) External failure costs
B) Inspection costs
C) Internal failure costs
D) Prevention costs

Question 75

The cost of a product liability claim can be classified as a(n)

A) prevention cost.
B) inspection cost.
C) internal failure cost.
D) external failure cost.

Question 76

Elif Package Delivery calculates the cost per delivery by identifying variables as cost drivers,and allocating overhead accordingly.What costing approach does Elif Package Delivery use?

A) job-order
B) activity-based
C) unit-based
D) process

Question 77

What types of data are accumulated by cost accounting? What is the accountant's role in cost accounting?

Question 78

In activity-based costing,the expenses associated with planning and design of new products are ________ overhead.

A) batch-related
B) product-related
C) company wide
D) expenditure-based

Question 79

Traditionally,what did manufacturing firms use to track the amount of time a worker spends on each specific task?

A) job-time ticket
B) barcoded ID card
C) clock punchcard
D) RFID chips

Question 80

________ are associated with testing to ensure that products meet quality standards.

A) External failure costs
B) Inspection costs
C) Internal failure costs
D) Prevention costs