Essay about Cost Accounting

Value Accounting, 14e (Horngren/Datar/Rajan) Chapter 20 Stock Administration, Simply-in-Time, and Simplified Costing Strategies Goal 20. 1 1) Which of the next industries would have the best price of products bought proportion relative to gross sales? A) pc producers B) retail organizations C) drug producers D) The share will often rely upon the success of a selected firm. Reply: B Diff: 2 Phrases: stock administration Goal: 1 AACSB: Reflective pondering 2) The prices of products acquired from suppliers together with incoming freight or transportation prices are: A) buying prices B) ordering prices C) stockout prices D) carrying prices Reply: A Diff: 2 Phrases: buying prices Goal: 1 AACSB: Reflective pondering three) The prices of getting ready, issuing, and paying buy orders, plus receiving and inspecting the gadgets included in orders is: A) buying prices B) ordering prices C) stockout prices D) carrying prices Reply: B Diff: 2 Phrases: ordering prices Goal: 1 AACSB: Reflective pondering four) The prices that consequence from theft of stock are: A) shrinkage prices B) exterior failure prices C) stockout prices D) prices of high quality Reply: A Diff: 2 Phrases: shrinkage Goal: 1 AACSB: Reflective pondering 5) The prices that consequence when an organization runs out of a selected merchandise for which there's a buyer demand are: A) shrinkage prices B) scarcity prices C) stockout prices D) EOQ estimation prices Reply: C Diff: 2 Phrases: stockout prices Goal: 1 AACSB: Reflective pondering 6) The prices that consequence when options and traits of a services or products are NOT in conformance with the specs are: A) inspection prices B) prices of high quality C) buying prices D) design prices Reply: B Diff: 2 Phrases: stockout prices Goal: 1 AACSB: Reflective pondering ) The prices that consequence when an organization holds a list of products on the market: A) buying prices B) carrying prices C) alternative prices D) curiosity prices Reply: B Diff: 2 Phrases: stockout prices Goal: 1 AACSB: Reflective pondering eight) High quality prices embody: A) buying prices B) ordering prices C) stockout prices D) prevention prices Reply: D Diff: 2 Phrases: high quality prices Goal: 1 AACSB: Reflective pondering Reply the next questions utilizing the knowledge beneath: The next data applies to Labs Plus, which provides microscopes to laboratories all through the nation. Labs Plus purchases the microscopes from a producer which has a popularity for very top quality in its manufacturing operation. Annual demand (weekly demand=1/52 of annual demand)20,800 items Orders per 12 months20 Lead time in days15 days Value of putting an order$100 9) What's the reorder level? A) 1,zero40 items B) 857 items C) 1,560 items D) 2,zero80 items Reply: B Rationalization: B) 20,800/52 = 400/7 = 57. 14 each day demand ? 15 = 857. 1 Diff: 2 Phrases: reorder level Goal: 1 AACSB: Analytical expertise 10) Retailers typically have a excessive proportion of web earnings to revenues. Reply: FALSE Rationalization: Retailers have a low proportion of web earnings to revenues. Diff: 2 Phrases: stock administration Goal: 1 AACSB: Analytical expertise 11) Stock administration is the planning, organizing, and controlling actions that concentrate on the move of supplies into, by, and from the group. Reply: TRUE Diff: 2 Phrases: stock administration Goal: 1 AACSB: Analytical expertise 12) Buying prices come up in getting ready and issuing buy orders, receiving and inspecting the gadgets included within the orders, and matching invoices acquired, buy orders, and supply data to make funds. Reply: FALSE Rationalization: Ordering prices come up in getting ready and issuing buy orders, receiving and inspecting the gadgets included within the orders, and matching invoices acquired, buy orders, and supply data to make funds. Diff: 2 Phrases: buying prices Goal: 1 AACSB: Analytical expertise 13) The chance price of the stockout consists of misplaced contribution margin on the sale NOT made plus any contribution margin misplaced on future gross sales as a result of buyer unwell will. Reply: TRUE Diff: 2 Phrases: stockout prices Goal: 1 AACSB: Analytical expertise 14) Carrying prices come up when a company experiences a capability to ship its items to its prospects. Reply: FALSE Rationalization: Carrying prices come up when a company holds its items on the market. Diff: 2 Phrases: carrying prices Goal: 1 AACSB: Analytical expertise 15) Shrinkage is measured by including (a) the price of the stock recorded on the books within the absence of theft and different incidents simply talked about, and (b) the price of stock when bodily counted. Reply: FALSE Rationalization: Shrinkage is measured by the distinction between (a) the price of the stock recorded on the books within the absence of theft and different incidents simply talked about, and (b) the price of stock when bodily counted. Diff: 2 Phrases: shrinkage Goal: 1 AACSB: Analytical expertise 16) Shrinkage prices consequence from theft by outsiders, embezzlement by staff, misclassifications, and clerical errors. Reply: TRUE Diff: 2 Phrases: shrinkage Goal: 1 AACSB: Analytical expertise 17) All stock prices can be found in monetary accounting techniques. Reply: FALSE Rationalization: Alternative prices are not often recorded in formal accounting techniques and they're typically a really important price part. Diff: 2 Phrases: shrinkage Goal: 1 AACSB: Analytical expertise 18) Sharing stock information all through the provision chain results in extra "rush" orders occurring. Reply: FALSE Rationalization: Sharing stock information all through the provision chain results in fewer "rush" orders occurring. Diff: 2 Phrases: stock administration Goal: 1 AACSB: Analytical expertise 19) Managing inventories to extend web earnings requires firms to successfully handle prices related to items on the market. Required: Classify the beneath listed gadgets as both Buying Prices, Ordering Prices, Carrying Prices, Stockout Prices, Prices of High quality, or Shrinkage Prices. ________________a. prices of acquiring buy approvals ________________b. prices ensuing from embezzlement by staff ________________c. inside failure prices ________________d. alternative price of the funding tied up in stock ________________e. spoilage of saved gadgets ________________f. prices of misplaced gross sales because of not having an merchandise requested by a buyer ________________g. prices of incoming freight ________________h. osts of matching invoices acquired to the gadgets and the acquisition orders ________________i. prices of wages for work-in-process inspections ________________j. prices that consequence from clerical errors Reply: a. Ordering Prices b. Shrinkage Prices c. Prices of High quality d. Carrying Prices e. Carrying Prices f. Stockout Prices g. Buying Prices h. Ordering Prices i. Prices of High quality j. Shrinkage Prices Diff: 2 Phrases: prices related to items on the market Goal: 1 AACSB: Analytical expertise Goal 20. 2 1) Obsolescence is an instance of which price class? A) carrying prices B) labor prices C) ordering prices D) high quality prices Reply: A Diff: 2 Phrases: carrying prices Goal: 2 AACSB: Reflective pondering 2) The prices related to storage are an instance of which price class? A) high quality prices B) labor prices C) ordering prices D) carrying prices Reply: D Diff: 2 Phrases: carrying prices Goal: 2 AACSB: Reflective pondering three) Which of the next is an assumption of the economic-order-quantity resolution mannequin? A) The amount ordered can differ at every reorder level. B) Demand ordering prices and carrying prices fluctuate. C) There will likely be well timed labor prices. D) No stockouts happen. Reply: D Diff: 2 Phrases: financial order amount (EOQ) Goal: 2 AACSB: Reflective pondering four) The financial order amount ignores: A) buying prices B) related ordering prices C) stockout prices D) Each A and C are appropriate. Reply: D Diff: three Phrases: financial order amount (EOQ) Goal: 2 AACSB: Reflective pondering 5) The acquisition-order lead time is the: A) distinction between the occasions an order is positioned and delivered B) distinction between the merchandise ordered and the merchandise acquired C) discrepancies in buy orders D) time required to appropriate errors within the merchandise acquired Reply: A Diff: 2 Phrases: purchase-order lead time Goal: 2 AACSB: Reflective pondering 6) Which of the next statements in regards to the economic-order-quantity resolution mannequin is FALSE? A) It assumes buying prices are related when the fee per unit modifications because of the amount ordered. B) It assumes high quality prices are irrelevant if high quality is unaffected by the variety of items bought. C) It assumes stockout prices are irrelevant if no stockouts happen. D) It assumes ordering prices and carrying prices are related. Reply: A Diff: three Phrases: financial order amount (EOQ) Goal: 2 AACSB: Reflective pondering ) Related whole prices within the economic-order-quantity resolution mannequin equal related ordering prices plus related: A) carrying prices B) stockout prices C) high quality prices D) buying prices Reply: A Diff: 2 Phrases: financial order amount (EOQ), ordering prices, carrying prices Goal: 2 AACSB: Reflective pondering Reply the next questions utilizing the knowledge beneath: The Wooden Furnishings firm produces a specialty wooden furnishings product, and has the next data accessible regarding its stock gadgets: Related ordering prices per buy order$300 Related carrying prices per 12 months: Required annual return on funding10% Required different prices per 12 months$2. 80 Annual demand is 20,000 packages per 12 months. The acquisition value per bundle is $32. eight) What's the financial order amount? A) 2,000,000 items B) 1,414. 21 items C) 150,000 items D) three,464. 00 items Reply: B Rationalization: B) Unit carrying prices = ($32 ? zero. 10) + $2. 80 = $6 EOQ = The sq. root of [(2 ? 20,000 ? $300) / $6] = 1,414. 21 items Diff: three Phrases: financial order amount (EOQ) Goal: 2 AACSB: Analytical expertise 9) What are the related whole prices on the financial order amount? A) $1,414. 21 B) $four,242. 5 C) $eight,485. 28 D) $9,000. 00 Reply: C Rationalization: C) Unit carrying prices = ($32 ? zero. 10) + $2. 80 = $6 EOQ = The sq. root of [(2 ? 20,000 ? $300) / $6] = 1,414. 21 items RTC = [pic]= $eight,485. 28 Diff: three Phrases: financial order amount (EOQ), ordering prices, carrying prices Goal: 2 AACSB: Analytical expertise 10) What are the whole related prices, assuming the amount ordered equals 1,000 items? A) $three,000 B) $500 C) $6,000 D) $9,000 Reply: D Rationalization: D) RTC = [pic] = $9,000 Diff: three Phrases: financial order amount (EOQ), ordering prices, carrying prices Goal: 2 AACSB: Analytical expertise 11) What number of deliveries will likely be required on the financial order amount? A) 1. 00 supply B) 5. 10 deliveries C) 7. 07 deliveries D) 14. 14 deliveries Reply: D Rationalization: D) 20,000 / 1,414. 21 = 14. 14 deliveries Diff: three Phrases: financial order amount (EOQ) Goal: 2 AACSB: Analytical expertise 12) The annual related whole prices are at a minimal when related: A) ordering prices are higher than the related carrying prices B) carrying prices are higher than the related ordering prices C) carrying prices are equal to related ordering prices D) None of those solutions is appropriate. Reply: C Diff: three Phrases: financial order amount (EOQ), ordering prices, carrying prices Goal: 2 AACSB: Reflective pondering Reply the next questions utilizing the knowledge beneath: The next data applies to Labs Plus, which provides microscopes to laboratories all through the nation. Labs Plus purchases the microscopes from a producer which has a popularity for very top quality in its manufacturing operation. Annual demand (weekly demand=1/52 of annual demand)20,800 items Orders per 12 months20 Lead time in days15 days Value of putting an order$100 13) What are the annual related carrying prices, assuming every order was made on the economic-order-quantity quantity? A) $200 B) $1,000 C) $2,000 D) $6,000 Reply: C Rationalization: C) Annual carrying prices = annual ordering prices = $100 ? 20 = $2,000 Diff: 2 Phrases: financial order amount (EOQ), carrying prices Goal: 2 AACSB: Analytical expertise 14) What's the financial order amount assuming every order was made on the economic-order-quantity quantity? A) 15 items B) 20 items C) 780 items D) 1,zero40 items Reply: D Diff: 2 Phrases: financial order amount (EOQ) Goal: 2 AACSB: Analytical expertise 15) If Brian Firm has a security inventory of 320 items and the typical each day demand is 20 items, what number of days will be lined if the cargo from the provider is delayed by 12 days? A) 24. zero days B) 20. zero days C) 16. zero days D) 13. four days Reply: C Rationalization: C) 320/20 = 16 days Diff: three Phrases: security inventory, purchase-order lead time Goal: 2 AACSB: Analytical expertise 16) If Jackson Collectibles, Inc. has a security inventory of 70 items and the typical weekly demand is 14 items, what number of days will be lined if the cargo from the provider is delayed ? A) 5 days B) 35. days C) 42 days D) 70 days Reply: B Rationalization: B) 70/2 = 35. zero days Diff: three Phrases: security inventory, purchase-order lead time Goal: 2 AACSB: Analytical expertise 17) The optimum security inventory degree is the amount of security inventory that minimizes the sum of the annual related: A) stockout prices and carrying prices B) ordering prices and carrying prices C) ordering prices and stockout prices D) ordering prices and buying prices Reply: A Diff: 2 Phrases: financial order amount (EOQ), security inventory, stockout prices, carrying prices Goal: 2 AACSB: Reflective pondering eight) The best model of the Financial Order Amount mannequin incorporates solely ordering prices, carrying prices, and buying prices into the calculation. Reply: FALSE Rationalization: Buying prices are ignored within the Financial Order Amount. Diff: 2 Phrases: financial order amount (EOQ) Goal: 2 AACSB: Analytical expertise 19) To find out the Financial Order Amount, the related ordering prices are maximized and the related carrying prices are minimized. Reply: FALSE Rationalization: We decrease each the related ordering prices and the related carrying prices. Diff: 2 Phrases: financial order amount (EOQ) Goal: 2 AACSB: Analytical expertise 20) The Financial Order Amount will increase with demand and carrying prices and reduces with ordering prices. Reply: FALSE Rationalization: The Financial Order Amount will increase with demand and ordering prices and reduces with carrying prices. Diff: 2 Phrases: financial order amount (EOQ) Goal: 2 AACSB: Analytical expertise 21) The EOQ mannequin is solved utilizing calculus however the important thing instinct is that related whole prices are minimized when related ordering prices equal related carrying prices. Reply: TRUE Diff: 2 Phrases: financial order amount (EOQ) Goal: 2 AACSB: Analytical expertise 22) Security inventory is used as a buffer in opposition to sudden will increase in demand, uncertainty about lead time, and unavailability of inventory from suppliers. Reply: TRUE Diff: 1 Phrases: security inventory Goal: 2 AACSB: Moral reasoning 23) As a result of unprecedented progress in the course of the 12 months, Flowers by Kelly determined to make use of a few of its surplus money to extend the scale of a number of stock order portions that had been beforehand decided utilizing an EOQ mannequin. Required: Establish whether or not growing the scale of stock orders will improve, lower, or haven't any impact on every of the next gadgets. ________________a. Common stock ________________b. Value of products bought ________________c. Variety of orders per 12 months ________________d. Whole annual carrying prices ________________e. Whole annual carrying and ordering prices ________________f. Whole annual ordering prices Reply: a. Enhance b. No impact c. Lower d. Enhance e. Relies upon which prices improve/lower extra f. Lower Diff: 2 Phrases: financial order amount (EOQ) Goal: 2 AACSB: Analytical expertise four) The one product of an organization has an annual demand of four,000 items. The price of putting an order is $20 and the price of carrying one unit in stock for one 12 months is $four. Required: Decide the financial order amount. Reply: The sq. root of [(2 ? 4,000 ? $20) / $4 = 200 units Diff: 1 Terms: economic order quantity (EOQ), ordering costs, carrying costs Objective: 2 AACSB: Analytical skills 25) Ralph was in the process of completing the quarterly planning for the purchasing department when a major computer malfunction lost most of his data. For direct material XXX he was able to recover the following: Average inventory level of XXX |200 | |Orders per year |40 | |Average daily demand |48 | |Working days per year |250 | |Annual ordering costs |$4,000 | |Annual carrying costs |$6,000 | Ralph purchases at the EOQ quantity level. Required: Determine the annual demand, the cost of placing an order, the annual carrying cost of one unit, and the economic order quantity. Answer: Annual demand= 48 ? 250 = 12,000 Cost of placing an order= $4,000/40 = $100 per order Carrying cost of one unit= $6,000/200 = $30 per unit EOQ= The square root of (2 ? 12,000 ? $100)/30 = 283 units Diff: 3 Terms: economic order quantity (EOQ), ordering costs, carrying costs Objective: 2 AACSB: Analytical skills 26) Clothes, Inc. , has an average annual demand for red, medium polo shirts of 25,000 units. The cost of placing an order is $80 and the cost of carrying one unit in inventory for one year is $25. Required: a. Use the economic-order-quantity model to determine the optimal order size. . Determine the reorder point assuming a lead time of 10 days and a work year of 250 days. c. Determine the safety stock required to prevent stockouts assuming the maximum lead time is 20 days and the maximum daily demand is 125 units. Answer: a. The square root of [(2 ? 25,000 ? $80) / $25] = 400 items b. Day by day demand = 25,000/250 = 100 items Reorder level = 100 items per day ? 10 days = 1,000 items c. |Most demand per day |125 items | |Most lead time |? zero days | |Most lead time demand |2,500 items | |Reorder level with out security shares |1,000 items | |Security inventory |1,500 items | Diff: 2 Phrases: financial order amount (EOQ), reorder level, security inventory Goal: 2 AACSB: Analytical expertise 27) A list merchandise of XYZ Manufacturing has a mean each day demand of 10 items with a most each day demand of 12 items. The financial order amount is 200 items. With out security shares, the reorder level is 50 items. Security shares are set at 94 items. Required: a. Decide the reorder level with security shares. b. Decide the utmost stock degree. c. Decide the typical lead time. d. Decide the utmost lead time. Reply: a. |Reorder level with out security shares |50 items | |Security inventory |94 items | | Reorder level with security shares |144 items | b. |Financial-order amount |200 items | |Security shares |94 items | |Most stock degree |294 items | . Common lead time = 50 items at reorder level/10 items a day = 5 days d. Reorder level with security shares is 144 Most demand is 12 Most lead time = 144/12 = 12 days Diff: 2 Phrases: financial order amount (EOQ), reorder level, security inventory Goal: 2 AACSB: Analytical expertise 28) For provide merchandise ABC, Andrews Firm has been ordering 125 items primarily based on the advice of the salesperson who calls on the corporate month-to-month. A brand new buying agent has been employed by the corporate who desires to start out utilizing the economic-order-quantity methodology and its supporting resolution components. She has gathered the next data: Annual demand in items |250 | |Days used per 12 months |250 | |Lead time, in days |10 | |Ordering prices |$100 | |Annual unit carrying prices |$20 | Required: Decide the EOQ, common stock, orders per 12 months, common each day demand, reorder level, annual ordering prices, and annual carrying prices. Reply: EOQ= The sq. root of [(2 ? 250 ? $100) / $20] = 50 Common stock= 50/2 = 25 Orders per 12 months= 250/50 = 5 Common each day demand= 250/250 = 1 unit Reorder level= 10/1 = 10 items Annual ordering prices= 5 ? $100 = $500 Annual carrying prices= 25 ? $20 = $500 Diff: 2 Phrases: financial order amount (EOQ), reorder level, ordering prices, carrying prices Goal: 2 AACSB: Analytical expertise 29) Talk about concerns that ought to be absolutely taken into consideration when growing stock associated related prices to be used in an financial order amount (EOQ) mannequin. Reply: It's essential that the prices be incremental. Think about incremental carrying prices. If they're prices that may change with the amount of stock held, then they're related. If there are prices that may be unchanged no matter how a lot stock was within the warehouse (similar to a clerical wage or materials handler who was working at beneath full capability), then these prices usually are not related for decision-making functions. Related carrying prices are more likely to be prices like shrinkage, breakage, obsolescence, and prices of hiring further staff (or having current staff work extra time) if larger ranges of stock will make these prices improve. Think about incremental alternative price of capital. If there's a resolution to hold extra stock, then there will likely be cash spent to buy the stock. The chance price of capital is what would the opposite most useful use of the cash be if it wasn't wanted to buy the upper degree of stock. It's calculated by multiplying the corporate's required fee of return by the per unit prices after which by the variety of items bought for the stock and incurred on the time the items are acquired. Stockout prices require an estimate of the misplaced contribution margin on gross sales misplaced due to a stockout. Ordering prices are solely people who change with the numbers of orders positioned. Diff: 2 Phrases: financial order amount (EOQ), ordering prices, carrying prices Goal: 2 AACSB: Reflective pondering Goal 20. three 1) Video Photos is a distributor of DVDs. Fast-Disk Mart is an area retail outlet which sells clean and recorded DVDs. Fast-Disk Mart purchases tapes from Video Photos at $three. 00 per DVD. DVDs are shipped in packages of 20. Video Photos pays all incoming freight, and Fast-Disk Mart doesn't examine the DVDs as a result of Video Photos popularity for top of the range. Annual demand is 104,000 DVDs at a fee of four,000 DVDs per week. Fast-Disk Mart earns 20% on its money investments. The acquisition-order lead time is 2 weeks. The next price information can be found: Related ordering prices per buy order$90. zero Carrying prices per bundle per 12 months: Related insurance coverage, supplies dealing with, breakage, and many others. , per 12 months$ four. 50 What's the required annual return on funding per bundle? A) $60. 00 B) $2. 50 C) $12. 00 D) $zero. 60 Reply: C Rationalization: C) 20 DVDs ? $three. 00 =$60. 00 $60. 00 ? zero. 2 = $12. 00 Diff: three Phrases: ordering prices, carrying prices Goal: three AACSB: Analytical expertise Reply the next questions utilizing the knowledge beneath: Digital Items is a distributor of DVDs. DVD Mart is an area retail outlet which sells clean and recorded DVDs. DVD Mart purchases tapes from Digital Items at $10. zero per DVD; DVDs are shipped in packages of 25. Digital Items pays all incoming freight, and DVD Mart doesn't examine the DVDs as a result of Digital Items' popularity for top of the range. Annual demand is 208,000 DVDs at a fee of four,000 DVDs per week. DVD Mart earns 15% on its money investments. The acquisition-order lead time is one week. The next price information can be found: Related ordering prices per buy order$94. 50 Carrying prices per bundle per 12 months: Related insurance coverage, supplies dealing with, breakage, and many others. , per 12 months$ three. 50 2) What's the financial order amount? A) 384 packages B) 475 packages C) 146 packages D) 196 packages Reply: D Rationalization: D) EOQ = The sq. root of [(2 ? (208,000/25) ? $94. 50) / ($37. 50+ $3. 50)] EOQ = 196 packages Diff: 2 Phrases: financial order amount (EOQ) Goal: three AACSB: Analytical expertise three) What are the related whole prices? A) $5,697 B) $2,829 C) $eight,zero29 D) $2,868 Reply: C Diff: three Phrases: financial order amount (EOQ), ordering prices, carrying prices Goal: three AACSB: Analytical expertise four) What number of deliveries will likely be made throughout every time interval? A) 86. 7 deliveries B) 72. zero deliveries C) 138. zero deliveries D) 42. 1 deliveries Reply: A Rationalization: A) EOQ = The sq. root of [(2 ? (208,000/25) ? $94. 50) / ($37. 0+ $3. 50)] EOQ = 196 packages [(208,000 / 25) / 196 = 86. 7 deliveries Diff: 3 Terms: economic order quantity (EOQ) Objective: 3 AACSB: Analytical skills Answer the following questions using the information below: Short Grass Incorporated is a distributor of golf balls. Martin's Golf Supplies is a local retail outlet which sells golf balls. Martin's purchases the golf balls from Short Grass Incorporated at $0. 75 per ball; the golf balls are shipped in cartons of 72. Short Grass Incorporated pays all incoming freight, and Martin's Golf Supplies does not inspect the balls due to Short Grass' reputation for high quality. Annual demand is 155,520 golf balls at a rate of 2,991 balls per week. Martin's Golf Supplies earns 12% on its cash investments. The purchase-order lead time is one week. The following cost data are available: Relevant ordering costs per purchase order$125. 00 Carrying costs per carton per year: Relevant insurance, materials handling, breakage, etc. , per year$ 0. 77 5) If Martin's makes an order (1/12 of annual demand) once per month, what are the relevant total costs? A) $1,500 B) $652. 50 C) $2,152. 50 D) $3,000. 00 Answer: C Explanation: C) Order Quantity = Annual Demand / 12 =12,960 balls/month = 180 cartons per month RTC = Ordering Costs + Carrying Costs Carrying Cost per carton = price ? invest rate + insurance/handling Carrying Cost per carton = ($. 75 ? 72 ? 12%) + $0. 77 = $7. 25 RTC = (12 ? $125. 00) + ((180/2) ? $7. 25) =$2,152. 50 Diff: 3 Terms: economic order quantity (EOQ), ordering costs, carrying costs Objective: 3 AACSB: Analytical skills 6) What is the economic order quantity? A) 180 cartons B) 273 cartons C) 270 cartons D) 360 cartons Answer: B Explanation: B) Annual Demand / 155,520 / 72 =2,160 cartons Carrying Cost per carton = ($. 75 ? 72 ? 12%) + $0. 77 = $7. 25 EOQ = The square root of [(2 ? (155,520/72) ? $125. 0) / ($7. 25)] EOQ = 272. 9 cartons - spherical to 273 Diff: 2 Phrases: financial order amount (EOQ) Goal: three AACSB: Analytical expertise 7) Buying on the EOQ beneficial degree, what number of deliveries will likely be made throughout every time interval? A) 2 deliveries B) 6. zero deliveries C) 7. 91 deliveries D) 12 deliveries Reply: C Rationalization: C) Annual Demand / 155,520 / 72 =2,160 cartons Carrying Value per carton = ($. 75 ? 72 ? 12%) + $zero. 77 = $7. 25 EOQ = The sq. root of [(2 ? (155,520/72) ? $125. 00) / ($7. 25)] EOQ = 272. 9 cartons - spherical to 273 Deliveries = Annual Demand / EOQ = 7. 91 Diff: three Phrases: financial order amount (EOQ) Goal: three AACSB: Analytical expertise eight) Buying on the EOQ beneficial degree, what are the related whole prices? A) $1,500. 00 B) $1,978. 60 C) $989. 37 D) $three,000. 00 Reply: B Rationalization: B) Annual Demand / 155,520 / 72 =2,160 cartons Carrying Value per carton = ($. 75 ? 72 ? 12%) + $zero. 77 = $7. 25 EOQ = The sq. root of [(2 ? (155,520/72) ? $125. 00) / ($7. 25)] EOQ = 272. 9 cartons - spherical to 273 989. 37+989. 26 RTC = [pic] + [pic]= $1,978. 60 (Your answer may be barely completely different primarily based on rounding. ) Diff: three Phrases: financial order amount (EOQ), ordering prices, carrying prices Goal: three AACSB: Analytical expertise 9) The reorder level is easiest to compute when: A) each demand and purchase-order lead occasions are recognized with certainty B) the variety of items bought varies C) the protection inventory quantity by no means varies D) the related ordering prices and the related carrying prices are equal Reply: A Diff: 2 Phrases: financial order amount (EOQ), reorder level Goal: three AACSB: Reflective pondering 10) What are the foremost related prices in sustaining security inventory? A) carrying prices and buying prices B) ordering prices and buying prices C) ordering prices and stockout prices D) stockout prices and carrying prices Reply: D Diff: 2 Phrases: security inventory Goal: three AACSB: Reflective pondering 11) The annual related carrying prices of stock consists of the sum of the: A) ordering prices and carrying prices B) stockout prices and carrying prices C) incremental prices plus the chance prices of capital D) incremental prices plus the carrying prices Reply: C Diff: 2 Phrases: carrying prices Goal: three AACSB: Reflective pondering 12) Get together Animals sells stuffed tigers. Merchandise, Inc. , manufactures many various stuffed animals. Get together Animals orders 10,400 tigers per 12 months, 200 per week, at $10 per tiger. The producer covers all delivery prices. Get together Animals earns 12% on its money investments. The acquisition-order lead time is three weeks. Get together Animals sells 210 tigers per week. The next information can be found (primarily based on administration's estimates): Estimated ordering prices per buy order$10 Estimated insurance coverage, supplies dealing with, breakage, and so forth, per 12 months$three Precise ordering prices per order$15 What's the financial order amount utilizing the estimated quantities? A) 119 stuffed tigers B) 223 stuffed tigers C) 273 stuffed tigers D) 325 stuffed tigers Reply: B Rationalization: B) EOQ = The sq. root of [(2 ? 10,400 ? 10) / ($3 + (0. 12 ? $10))] EOQ = 223 items Diff: three Phrases: financial order amount (EOQ) Goal: three AACSB: Analytical expertise 13) A battle between the EOQ mannequin's optimum order amount and the order amount the buying supervisor, evaluated on standard accounting numbers, regards as optimum is taken into account a(n): A) drawback for the chief monetary officer to resolve B) drawback for the efficiency analysis system to resolve C) aim congruence D) alternative price Reply: B Diff: 2 Phrases: financial order amount (EOQ) Goal: three AACSB: Analytical expertise 14) Simply-in-time buying requires: A) bigger and fewer frequent buy orders B) smaller and fewer frequent buy orders C) smaller and extra frequent buy orders D) bigger and extra frequent buy orders Reply: C Diff: 2 Phrases: just-in-time (JIT) buying Goal: three AACSB: Analytical expertise 15) Will increase within the carrying price and reduces within the ordering price per buy order lead to: A) smaller EOQ quantities B) bigger EOQ quantities C) bigger related whole prices D) smaller related whole prices Reply: A Diff: 2 Phrases: financial order amount (EOQ), ordering prices, carrying prices Goal: three AACSB: Analytical expertise 6) The annual related carrying prices of stock encompass incremental prices plus the chance price of capital. Reply: TRUE Diff: three Phrases: carrying prices Goal: three AACSB: Analytical expertise 17) Related alternative price of capital is the return forgone by investing capital in stock somewhat than elsewhere. Reply: TRUE Diff: 2 Phrases: related alternative price of capital Goal: three AACSB: Analytical expertise 18) Video Boy has one specific product that has an annual demand of two,000 items. Whole manufacturing prices per unit whole $20. Ordering prices for the product whole $25 per buy order. At the moment, the carrying prices per unit are 25% of producing prices. Required: Decide the financial manufacturing order amount. Reply: The sq. root of [(2 ? 2,000 ? $25) / $5] = 141. 42 items Diff: 2 Phrases: financial order amount (EOQ), ordering prices, carrying prices Goal: three AACSB: Analytical expertise 19) The IBP Grocery orders most of its gadgets in lot sizes of 10 items. Common annual demand per aspect of beef is 720 items per 12 months. Ordering prices are $25 per order with a mean buying value of $100. Annual stock carrying prices are estimated to be 40% of the unit price. Required: a. Decide the financial order amount. b. Decide the annual price financial savings if the store modifications from an order dimension of 10 items to the financial order amount. c. For the reason that shelf life is restricted, the IBP Grocery should maintain the stock transferring. Assuming a 360-day 12 months, decide the optimum lot dimension below every of the next: (1) a 20-day shelf life and (2) a 10-day shelf life. Reply: a. The sq. root of [(2 ? 720 ? $25) / $40] = 30 items b. |Present 10-unit order: | | | | Ordering prices ($25 ? 20/10) |$1,800 | | | Carrying prices ($100 ? zero. 40 ? 10/2) |200 |$2,000 | |EOQ 30-unit order: | | | | Ordering prices ($25 ? 720/30) |600 | | | Carrying prices ($100 ? zero. 40 ? 30/2) |600 |1,200 | |Annual financial savings | |$ 800 | c. Common each day demand = 720 / 360 = 2 per day Common days' provide in EOQ = 30/2 = 15 days (1) 20-day shelf life permits for as much as 40 items (20 ? 2), EOQ is appropriate. (2) 10-day shelf life permits for as much as 20 items (10 ? 2), EOQ shouldn't be acceptable Diff: three Phrases: financial order amount (EOQ) Goal: three AACSB: Analytical expertise 20) The chief vice chairman of Robotics, Inc. , is worried as a result of the price of supplies has not been in step with the price range for a number of intervals, even after implementing an EOQ mannequin. The corporate has the conventional direct materials variance computations of value and effectivity on the finish of every month. The worth variance of the direct supplies used is often close to expectations. The vice chairman doesn't perceive how the price range variations are all the time bigger than the fabric value variances. Required: What clarification are you able to give for the analysis issues offered? Reply: An EOQ mannequin doesn't clear up all stock associated issues. The primary drawback is the timing of fabric value variance computations. They need to be on the time of buy, not on the time of utilization. By altering when the variance is computed, the duty is positioned the place it ought to be, in buying, not in manufacturing. Additionally, the timing of when supplies are used might clarify the distinction between the price range variances and the fabric value variances. Supplies could also be bought in a single interval and never used till one other interval. Additionally, materials utilization could embody gadgets bought throughout a number of earlier intervals. Diff: 2 Phrases: stock administration, financial order amount (EOQ) Goal: three AACSB: Reflective pondering Goal 20. four 1) Flashdrive Firm sells 200 flash drives per week. Buy-order lead time is 1-1/2 weeks and the economic-order amount is 450 items. What's the reorder level? A) 200 items B) 300 items C) 750 items D) 1,125 items Reply: B Rationalization: B) 200 ? 1. 5= 300 items Diff: 2 Phrases: financial order amount (EOQ), reorder level Goal: four AACSB: Analytical expertise 2) Wilson's Deli can predict with digital certainty the demand for its merchandise. Wilson's sells 30 hams per week. Buy-order lead time is three weeks and the economic-order amount is 75 hams. What's the reorder level? A) 30 hams B) 75 hams C) 90 hams D) 100 hams Reply: C Rationalization: C) 30 ? three= 90 hams Diff: 2 Phrases: financial order amount (EOQ), reorder level Goal: four AACSB: Analytical expertise Reply the next questions utilizing the knowledge beneath: Owen-King Firm sells optical tools. Lens Firm manufactures particular glass lenses. Owen-King Firm orders 5,200 lenses per 12 months, 100 per week, at $20 per lens. Lens Firm covers all delivery prices. Owen-King Firm earns 30% on its money investments. The acquisition-order lead time is 2. 5 weeks. Owen-King Firm sells 125 lenses per week. The next information can be found: Related ordering prices per buy order$21. 25 Related insurance coverage, supplies dealing with, breakage, and so forth, per 12 months$ 2. 50 three) What's the financial order amount for Owen-King Firm? A) 325 lenses B) 297 lenses C) 210 lenses D) 161 lenses Reply: D Rationalization: D) EOQ = The sq. root of [(2 ? 5,200 ? $21. 25) / (($20 ? 30%) + $2. 50)] EOQ = 161 lenses Diff: 2 Phrases: financial order amount (EOQ) Goal: four AACSB: Analytical expertise four) What's the reorder level? A) 220. 5 lenses B) 312. 5 lenses C) 397. 5 lenses D) 415. 5 lenses Reply: B Rationalization: B) 125 lenses ? 2. 5 weeks = 312. 5 lenses Diff: 2 Phrases: reorder level Goal: four AACSB: Analytical expertise 5) The ________ describes the move of products, companies, and knowledge from the preliminary sources of supplies and companies to the supply of merchandise to customers. A) buyer record B) enterprise necessities plan (ERP) C) materials necessities plan (MRP) D) provide chain Reply: D Diff: 2 Phrases: provide chain Goal: four AACSB: Reflective pondering 6) When utilizing a vendor-managed stock system to reinforce the options of provide chain administration, a difficult subject is: A) issues of communication and belief B) the sharing of correct, well timed, and related details about gross sales forecasts C) probably incompatible data techniques D) the entire above Reply: D Diff: 2 Phrases: provide chain Goal: four AACSB: Reflective pondering ) Simply-in-time buying is guided solely by the financial order amount. Reply: FALSE Rationalization: Stock administration additionally consists of buying prices, stockout prices, and high quality prices. Diff: 2 Phrases: just-in-time (JIT) buying, financial order amount (EOQ) Goal: four AACSB: Analytical expertise eight) Firms that implement JIT buying will swap their suppliers when one other provider gives a lower cost. Reply: FALSE Rationalization: Firms that implement JIT buying select their suppliers rigorously and develop long-term provider relationships. Diff: three Phrases: just-in-time (JIT) buying Goal: four AACSB: Reflective pondering 9) Simply-in-time buying describes the move of products, companies, and knowledge from the preliminary sources of supplies and companies to the supply of merchandise to customers, no matter whether or not these actions happen in the identical group or in different organizations. Reply: FALSE Rationalization: Provide chain describes the move of products, companies, and knowledge from the preliminary sources of supplies and companies to the supply of merchandise to customers, no matter whether or not these actions happen in the identical group or in different organizations. Diff: three Phrases: provide chain Goal: four AACSB: Reflective pondering 10) The manufacturing supervisor of New Know-how Firm is worried in regards to the firm's latest plant. When the plant started operations three years in the past, it had the very best of all the pieces. It had trendy tools, well-trained staff, engineered work and meeting stations, and a managed atmosphere. In the course of the first two years, the analysis outcomes have been excellent with nearly all price variances being favorable. Nonetheless, not too long ago, issues have turned unfavourable. In current months, all the pieces appears to be working in a disaster administration mode. Though most price variances stay favorable, the plant's phase contribution is declining and prospects are complaining about poor high quality and gradual supply. A number of prospects have advised that they could take their enterprise elsewhere if issues don't enhance. The store flooring is in continuous turmoil. In-process stock is all over the place, manufacturing staff have issue discovering jobs that must be labored on, and scheduling has requested a bigger pc to maintain monitor of labor in course of. The vice chairman of gross sales doesn't know the place to start with fixing the purchasers' issues. It appears that evidently everyone seems to be working very laborious and the plant has the very best amenities and educated staff within the business. Required: What's the nature of the plant's issues? What advice would you make to assist enhance the scenario? Reply: The essential drawback seems to be an excessive amount of work-in-process stock and an absence of management over the move of this stock. For the reason that plant had two good years of manufacturing, it could be that elevated calls for are pushing the plant close to its capability and administration has misplaced management of tips on how to handle a near-capacity scenario. Though the staff are nicely educated and expert in what they do, that isn't sufficient to make sure the manufacturing course of runs easily. All actions should be organized to be environment friendly. A starting advice is to implement a supplies required planning system the place every workstation controls what it produces, and pushes it to the subsequent workstation. This may be completed by tighter controls over the scheduling of manufacturing items by workstation. This is able to be included with a grasp manufacturing schedule, invoice of supplies, and well timed stock system. Diff: 2 Phrases: stock administration, materials necessities planning (MRP) Goal: four AACSB: Communication 11) What's a provide chain, and what are the advantages of a provide chain evaluation? Present an instance of those advantages. Reply: The provision chain describes the move of products, companies, and knowledge from the preliminary sources of supplies and companies to the supply of merchandise to prospects, no matter whether or not these actions happen in the identical group or in different organizations. Using provide chain evaluation permits firms to coordinate their actions and scale back inventories all through the provision chain. An instance of the advantages of provide chain evaluation may be the emergence of provider or vendor-managed inventories similar to the connection between Procter & Gamble and Walmart. Diff: 2 Phrases: stock administration Goal: four AACSB: Reflective pondering Goal 20. 5 1) A push-through system that manufactures completed items for stock on the idea of demand forecasts is known as: A) just-in-time buying B) supplies necessities planning C) related whole prices D) financial order amount Reply: B Diff: 1 Phrases: materials necessities planning (MRP) Goal: 5 AACSB: Reflective pondering ) A requirement-pull system wherein every part in a manufacturing line is produced instantly as wanted by the subsequent step within the manufacturing line is known as: A) just-in-time buying B) supplies necessities planning C) related whole prices D) financial order amount Reply: A Diff: 1 Phrases: just-in-time (JIT) buying Goal: 5 AACSB: Reflective pondering three) The administration accountant aids in MRP by: A) doing journal entries as requested B) getting ready plant appropriation requests C) sustaining correct data of stock and its prices D) contacting distributors to verify they'll ship the supplies in time Reply: C Diff: 1 Phrases: materials necessities planning (MRP) Goal: 5 AACSB: Reflective pondering four) A "push-through" system, typically described as a just-in-time system, emphasizes simplicity and shut coordination amongst work facilities. Reply: FALSE Rationalization: The narrative describes a Supplies Requirement Planning system. Diff: 2 Phrases: just-in-time (JIT) manufacturing Goal: 5 AACSB: Communication 5) Prices of establishing a manufacturing run are analogous to ordering prices within the Financial Order Amount (EOQ) mannequin. Reply: TRUE Diff: 2 Phrases: ordering prices Goal: 5 AACSB: Analytical expertise ) A "demand-pull" system, typically described as a supplies requirement planning system, focuses first on the forecasted quantity and timing of completed items after which determines the demand for supplies parts and subassemblies at every of the prior levels of manufacturing. Reply: FALSE Rationalization: The narrative describes a push-through system. Diff: 2 Phrases: materials necessities planning (MRP) Goal: 5 AACSB: Reflective pondering 7) Simply-in-time (JIT) manufacturing, is a "demand-pull" manufacturing system that manufactures every part in a manufacturing line as quickly as, and solely when, wanted by the subsequent step within the manufacturing line. Reply: TRUE Diff: 2 Phrases: just-in-time (JIT) manufacturing Goal: 5 AACSB: Reflective pondering eight) Simply-in-time techniques are just like supplies requirement planning techniques in that each techniques are demand-pull techniques. Reply: FALSE Rationalization: Simply-in-time techniques usually are not just like supplies requirement planning techniques in that just-in-time manufacturing is a demand-pull system and supplies necessities planning is a push-through method. Diff: 2 Phrases: just-in-time (JIT) manufacturing, supplies necessities planning (MRP) Goal: 5 AACSB: Analytical expertise 9) Kretzinger Firm makes intensive use of economic efficiency reviews for every of its departments. Though most departments have been reporting favorable price variances with the corporate's present stock system, administration is worried in regards to the total efficiency of the buying division. For instance, the next data is for the buying of supplies for a product the corporate has been manufacturing for a number of years: Buy 12 months |Amount Used |Common Stock |Worth Variance | |20X1 |40,000 |eight,000 |$ 1,000 F | |20X2 |60,000 |15,000 |10,000 F | |20X3 |60,000 |20,000 |12,000 F | |20X4 |50,000 |12,500 |20,000 U | |20X5 |54,000 |18,000 |eight,000 F | |20X6 |58,000 |23,200 |9,500 F | Required: a. Compute the stock turnover for annually. Can any conclusions be drawn for a yearly comparability of the acquisition value variance and the stock turnover? b. Establish issues more likely to be attributable to evaluating buying solely on the idea of the acquisition value variance. c. What suggestions will enhance the analysis course of? Reply: a. |12 months |Amount used | |Common stock |Turnover | |20X1 |40,000 |divided by |eight,000 |5. | |20X2 |60,000 |divided by |15,000 |four. zero | |20X3 |60,000 |divided by |20,000 |three. zero | |20X4 |50,000 |divided by |12,500 |four. zero | |20X5 |54,000 |divided by |18,000 |three. zero | |20X6 |58,000 |divided by |23,200 |2. 5 | Favorable buy costs seem like related to decreases in stock turnover and will increase in common stock ranges. Decreases in stock turnover are a attainable sign of the buildup of extra stock. Extra stock will scale back return on funding of the corporate and the above data signifies a necessity for a just-in-time stock system. b. To attain amount reductions and favorable supplies value variances, buying could also be ordering extra stock, thereby growing subsequent storage, obsolescence, and dealing with prices. To acquire a low value, buying could also be ordering from a provider whose items have inferior high quality which can, in flip, result in elevated inspection, rework, and, maybe, dissatisfied prospects. c. It seems that two gadgets could assist enhance the scenario. First, think about the change to a just-in-time stock system that may vastly enhance the stock turnover and scale back the quantity of stock carried. Second, extra measures ought to be used within the analysis of the buying division. Both completely different monetary measures ought to be used or the addition of nonfinancial measures ought to be applied. Diff: three Phrases: stock administration, just-in-time (JIT) manufacturing Goal: 5 AACSB: Analytical expertise 10) Minnesota Ore Firm mines iron ore for manufacturing into varied steel merchandise. Throughout current years, the corporate has had massive fluctuations in its inventories of steel ingots. A lot of the volatility of the stock ranges is because of the variability of demand by the corporate's largest prospects, vehicle producers. For big orders, the corporate has the expertise to shortly shift manufacturing from one product to a different. Required: Clarify how the corporate can enhance its stock management system and provides the benefits of no matter you suggest. Reply: The corporate can in all probability profit from altering to a just-in-time system for stock management. This is able to permit the corporate to be aware of precise wants somewhat than completed items stock constructing. The benefits can be: 1. Decrease stock necessities; 2. Reductions in carrying and dealing with prices of inventories; three. Discount in dangers of out of date inventories; four. Discount in whole manufacturing prices; and 5. Reductions in paperwork. Diff: 2 Phrases: stock administration, just-in-time (JIT) manufacturing Goal: 5 AACSB: Reflective pondering Goal 20. 6 1) A grouping of all of the various kinds of tools used to make a given product is known as: A) whole high quality administration B) supplies necessities planning C) manufacturing cells D) financial order amount Reply: C Diff: 1 Phrases: manufacturing cells Goal: 6 AACSB: Reflective pondering 2) The time required to get tools, instruments, and supplies prepared to start out manufacturing is known as: A) setup time B) manufacturing lead time C) pass-through time D) None of those solutions is appropriate. Reply: A Diff: 1 Phrases: lean manufacturing Goal: 6 AACSB: Reflective pondering three) The time from when an order is acquired by manufacturing till it turns into a completed good is known as: A) work-in-process time B) manufacturing lead time C) pass-through time D) None of those solutions is appropriate. Reply: B Diff: 1 Phrases: lean manufacturing Goal: 6 AACSB: Reflective pondering four) All the following are potential monetary advantages of just-in-time EXCEPT: A) decrease investments in inventories B) decrease investments in plant area for inventories C) decreasing the chance of obsolescence D) decreasing manufacturing lead time Reply: C Diff: 1 Phrases: just-in-time (JIT) manufacturing Goal: 6 AACSB: Analytical expertise 5) A system that contains a single database that collects information and feeds it into software program functions supporting all of an organization's enterprise actions is called a(n): A) financial order amount (EOQ) system B) enterprise necessities planning (ERP) system C) just-in-time (JIT) system D) materials necessities planning (MRP) system Reply: B Diff: 2 Phrases: enterprise useful resource planning (ERP) system Goal: 6 AACSB: Use of Data Know-how 6) One DISADVANTAGE of an enterprise useful resource planning (ERP) system is: A) using commonplace costing techniques shouldn't be allowed B) these techniques usually are not in accordance with Typically Accepted Accounting Rules (GAAP) C) the techniques should typically be custom-made to suit the strategic wants of the consumer D) the techniques improve lead occasions when buying materials from a provider Reply: C Diff: 2 Phrases: enterprise useful resource planning (ERP) system Goal: 6 AACSB: Reflective pondering 7) A monetary good thing about a just-in-time system is that stock carrying prices are lowered. Reply: TRUE Diff: 2 Phrases: just-in-time (JIT) manufacturing, just-in-time (JIT) buying Goal: 6 AACSB: Reflective pondering eight) In a just-in-time system, suppliers are chosen totally on the idea of their skill to offer supplies and merchandise on the lowest attainable value. Reply: FALSE Rationalization: In a just-in-time system, suppliers are chosen on the idea of their skill to ship high quality supplies in a well timed method. Diff: 2 Phrases: just-in-time (JIT) manufacturing, just-in-time (JIT) buying Goal: 6 AACSB: Reflective pondering 9) An Enterprise Useful resource Planning (ERP) System contains a single database that collects information and feeds it into software program functions supporting all of an organization's enterprise actions. Reply: TRUE Diff: 2 Phrases: enterprise useful resource planning (ERP) system Goal: 6 AACSB: Use of Data Know-how 10) The Jarvis Company produces bucket loader assemblies for the tractor business. The product has a long run life expectancy. Jarvis has a conventional manufacturing and stock system. Jarvis is contemplating the set up of a just-in-time stock system to enhance its price construction. In doing a full research utilizing its manufacturing engineering workforce in addition to consulting with business JIT specialists and the primary distributors and suppliers of the parts Jarvis makes use of to fabricate the bucket loader assemblies, the next incremental cost-benefit related data is offered for evaluation: The Jarvis price of funding capital hurdle fee is 15%. One time price to rearrange the store flooring to create the manufacturing cell workstations is $275,000. One time price to retrain the prevailing workforce for the JIT required expertise is $60,000. Anticipated defect discount is 40%. At the moment there's a price of high quality defect evaluation listed as $150,000 per 12 months. The setup time for every of the prevailing capabilities will likely be lowered by 67%. At the moment the forecast for setup prices are $225,000 per 12 months. Jarvis will count on to save lots of $200,000 per 12 months in carrying prices because of having a decrease stock. The suppliers would require a 15% premium over the present degree of costs so as to place themselves to provide the fabric on a smaller and extra frequent schedule. At the moment the supplies purchases are $1,500,000 per 12 months. Required: Decide whether or not it's in the very best curiosity of Jarvis Company to put in a JIT system. Reply: 1. Preliminary Funding = $275,000 + 60,000 = $335,000 2. Annual Financial savings: Defect Value Discount = 40% of $150,000 = $60,000 Setup Value Discount = 67% of $225,000 = $150,750 Carrying Value discount = $200,000 Whole Financial savings = (60,000 + 150,750 + 200,000) = $410,750 three. Annual Elevated Prices: Vendor Premium = 15% of $1,500,000 = $225,000 four. Internet Annual Financial savings = (410,750 - 225,000) = $185,750 5. Financial savings/Preliminary Funding = (185,750 / 335,000) = 55 % For the reason that web financial savings is returning 55% per 12 months on the preliminary funding (which is much in extra of the businesses hurdle fee of 15%), the JIT venture ought to be applied. Diff: three Phrases: just-in-time (JIT) manufacturing Goal: 6 AACSB: Analytical expertise 11) What are 5 options of a just-in-time manufacturing system? Reply: A just-in-time (JIT) system has many constructive options. It organizes manufacturing in manufacturing cell teams which permit for all tools used for a given product to be grouped collectively. This reduces materials dealing with prices and sequences the manufacturing course of. A second characteristic of a JIT system is that staff are educated to be multiskilled. They're educated to function varied machines in addition to to do gentle upkeep and repairs on the machines. A 3rd characteristic of JIT is that it aggressively works to remove defects. As a result of there's a tight hyperlink between the steps, defects are shortly seen within the subsequent step and addressed earlier than massive numbers of items turn into backlogged. A fourth characteristic of a JIT system is that it reduces setup time and manufacturing lead time. Decreased setup prices make it extra sensible to provide smaller batches and react quicker to modifications in buyer demand. A fifth characteristic of a JIT system is the agency solely makes use of suppliers who're able to assembly supply calls for in a well timed trend. This additionally causes a rise within the high quality of the products being acquired by the agency. Diff: 2 Phrases: just-in-time (JIT) manufacturing Goal: 6 AACSB: Reflective pondering Goal 20. 7 1) Conventional regular and commonplace costing techniques use: A) backflush costing B) delayed costing C) post-deduct costing D) sequential monitoring Reply: D Diff: 2 Phrases: backflush costing Goal: 7 AACSB: Reflective pondering 2) A costing system that omits recording some or the entire journal entries regarding the cycle from buy of direct supplies to the sale of completed items known as: A) dependent costing B) synchronous costing C) sequential costing D) backflush costing Reply: D Diff: 2 Phrases: backflush costing Goal: 7 AACSB: Reflective pondering Reply the next questions utilizing the knowledge beneath: Video games R Us manufactures varied video games. For March, there have been no starting inventories of direct supplies and no starting or ending work in course of. Conversion prices is the one oblique manufacturing price class at the moment used. Journal entries are recorded when supplies are bought and when conversion prices are allotted below backflush costing. Conversion prices ? March$ 400,000 Direct supplies bought ? March$1,070,000 Items produced ? March58,800 Items bought ? March41,800 three) Which of the next journal entries correctly data the acquisition of direct supplies? A) Accounts Payable Control1,070,000 Stock: Uncooked and In-Course of Control1,070,000 B) Stock: Uncooked and In-Course of Control1,070,000 Accounts Payable Control1,070,000 C) Stock: Uncooked and In-Course of Control1,070,000 Conversion Costs1,070,000 D) Conversion Costs1,070,000 Stock: Uncooked and In-Course of Control1,070,000 Reply: B Diff: three Phrases: backflush costing, set off level Goal: 7 AACSB: Analytical expertise four) Which of the journal entries correctly data conversion prices? A) Conversion Prices400,000 Varied Accounts400,000 B) Varied Accounts400,000 Conversion Prices400,000 C) Conversion Prices400,000 Stock: Direct Supplies400,000 D) Stock: Direct Supplies400,000 Conversion Prices400,000 Reply: A Diff: 2 Phrases: backflush costing Goal: 7 AACSB: Analytical expertise ) Which of the next entries correctly data the price of items bought for the month? A) Completed Goods1,zero45,000 Work in Process1,zero45,000 B) Value of Items Sold1,zero45,000 Completed Goods1,zero45,000 C) Completed Goods1,zero45,000 Value of Items Sold1,zero45,000 D) Value of Items Sold1,zero45,000 Work in Process1,zero45,000 Reply: B Diff: three Phrases: backflush costing Goal: 7 AACSB: Analytical expertise Reply the next questions utilizing the knowledge beneath: Full Digital Merchandise manufactures digital cameras. For October, there have been no starting inventories of direct supplies and no starting or ending work in course of. Conversion prices is the one oblique manufacturing price class at the moment used. Journal entries are recorded when supplies are bought and when items are bought. Conversion prices - October$ 45,200 Direct supplies bought - October$125,200 Items produced - October40,000 items Items bought - October37,500 items Promoting value$10 every 6) Which of the next journal entries correctly displays the acquisition of supplies in a JIT atmosphere? A) Stock: Uncooked and In-Course of125,200 Accounts Payable Management125,200 B) Accounts Payable Management125,200 Allotted Prices: Direct Supplies125,200 C) Accounts Payable Management125,200 Supplies Stock125,200 D) Allotted Prices: Direct Supplies125,200 Stock: Uncooked and Materials125,200 Reply: A Diff: three Phrases: backflush costing Goal: 7 AACSB: Analytical expertise 7) Which of the next journal entries can be recorded when items are bought for the month? A) Value of Items Offered159,750 Stock: Uncooked and In-Course of159,750 B) Value of Items Offered159,750 Stock: Uncooked and In-Course of117,375 Conversion Prices Allotted42,375 C) Stock: Uncooked and In-Course of117,375 Conversion Prices Allotted42,375 Value of Items Offered159,750 D) Value of Items Offered159,750 Stock: Uncooked and In-Course of114,750 Conversion Prices Allotted45,000 Reply: B Rationalization: B) Direct supplies ($125,200/40,000)$three. 13 Conversion prices ($45,200/40,000)1. 13 Whole$four. 26 37,500 ? $four. 26= $159,750 37,500? $three. 13= $117,375 37,500 ? $1. 13= $42,375 Diff: three Phrases: backflush costing Goal: 7 AACSB: Analytical expertise eight) Which of the next entries would happen if the one set off level is the manufacturing of completed items? A) Value of Items Offered159,750 Stock: Uncooked and In-Course of Management114,750 Conversion Prices Allotted45,000 B) Stock: Uncooked and In-Course of Management117,375 Conversion Prices Allotted42,375 Value of Items Offered159,750 C) Completed Items170,400 Accounts Payable Management125,200 Conversion Prices Allotted45,200 D) Accounts Payable Management125,200 Conversion Prices Allotted45,200 Completed Items170,400 Reply: C Rationalization: C) 40,000 ? $four. 26= $170,400 40,000 ? $three. 13= $125,200 40,000 ? $1. 13 = $45,200 Diff: three Phrases: backflush costing Goal: 7 AACSB: Analytical expertise 9) Firms that may profit from backflush costing embody firms: A) which have quick manufacturing lead occasions B) whose inventories differ from interval to interval C) firms that require audit trails
Order a unique copy of this paper
(550 words)

Approximate price: $22

Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

We value our customers and so we ensure that what we do is 100% original..
With us you are guaranteed of quality work done by our qualified experts.Your information and everything that you do with us is kept completely confidential.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

The Product ordered is guaranteed to be original. Orders are checked by the most advanced anti-plagiarism software in the market to assure that the Product is 100% original. The Company has a zero tolerance policy for plagiarism.

Read more

Free-revision policy

The Free Revision policy is a courtesy service that the Company provides to help ensure Customer’s total satisfaction with the completed Order. To receive free revision the Company requires that the Customer provide the request within fourteen (14) days from the first completion date and within a period of thirty (30) days for dissertations.

Read more

Privacy policy

The Company is committed to protect the privacy of the Customer and it will never resell or share any of Customer’s personal information, including credit card data, with any third party. All the online transactions are processed through the secure and reliable online payment systems.

Read more

Fair-cooperation guarantee

By placing an order with us, you agree to the service we provide. We will endear to do all that it takes to deliver a comprehensive paper as per your requirements. We also count on your cooperation to ensure that we deliver on this mandate.

Read more

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency

Guaranteed 5-30% off for all your orders with us. Try Now!

X