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APICS EXAM 3 DETAIL SCHEDULING - LENNIE MIZE-
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APICS EXAM 3 DETAIL SCHEDULING - LENNIE MIZEManufacturing Inventory Balance Over Time - Answers-Higher Balance to Lower
Balance from Time 0:
Operating Inventory
Excess Inventory
Inactive Inventory
Obsolete Inventory
Scrap
Excess inventories are caused by: - Answers-Overproducing or buying more than
needed.
Exceeds the minimum amount necessary to achieve the desired throughput rate.
Planning factors - Answers--Lot size/order quantity
-Lead time
-Safety stock
-Scrap factor
All the following are planning factors except:
A) Lot size/order quantity
B) lead time
C) safety stock
D) scrap
E) allocations - Answers-E) allocations
Inactive inventory - Answers-Stock designated as in excess of consumption within a
defined period or stocks of items that have not been used for a defined period.
Seen as an asset from the accounting perspective but has carrying costs.
Obsolete inventory - Answers-Inventory items that have met the obsolescence criteria
established by the organization.
Obsolete inventory will never be used or sold at full value. Disposing of the inventory
may reduce a company's profit.
Scrap - Answers-Material that is outside of specifications and is not practical to rework.
Cost systems: - Answers-1. Project costing.
2. Job order costing.
3. Process costing.
Project Costing: - Answers-In an ETO Business: Accounting has a system that shows
project numbers for work units.
,Assigns valuations based on services performed on a project basis.
Job order costing: - Answers-In MTO/ETO Business in job shop: Every order that goes
to the floor has a manufacturing order number that goes on it. Any material, labor, or
overhead that goes on it is track so we see where costs come from.
Shows the cost accumulation of each different job.
A cost accounting system in which costs are assigned to individual manufacturing
orders is - Answers-Job costing
Process costing: - Answers-In Flow Business: Got machines that takes back off logs,
you want to know cost to run machine for a day or hr. not per log.
Captures the cost to process a batch or group of items.
first in, first out (FIFO) - Answers-A method of inventory valuation for accounting
purposes. The accounting assumption is that the oldest inventory (first in) is the first to
be used (first out), but there is no necessary relationship with the actual physical
movement of specific items.
If prices are increasing, which inventory valuation method will cause the inventory value
to resemble the current market value? - Answers-A)FIFO
A manufacturer starts the quarter with zero inventory. They then buy 50 parts at $10,
then 50 parts at $15, then 20 parts at $20. Using LIFO, calculate the value of inventory
at the end of the quarter if 70 pieces were sold? - Answers-$500.
Inventory turns = - Answers-Annual cost of goods sold/Average inventory in dollars.
If a company has an annual cost of goods sold of $1,000,000 and wants to have an
average inventory in dollars of $25,000, how many inventory turns should they shoot
for? - Answers-A) 40
Days of supply= - Answers-Inventory on hand/Average daily usage.
If 6,000 units are sold over a period of 30 days at 200 units per day. What is the days of
supply? - Answers-30 days.
if a plant is operating 360 days a year, calculate the average days of supply if the
inventory turns are 12: - Answers-30.
Cash-to-cash cycle= - Answers-Days supply of inventory+accounts receivable days-
accounts payable days.
, Calculate the cash to cash cycle when the days of inventory is 60, the days of account
receivable is 45, and the days of accounts payable is 50 days. - Answers-55
What are the two inventory policies and techniques? - Answers-Lot-sizing and SS.
Lot sizing techniques - Answers-Economic order quantity (EOQ) - order the "ideal"
amount based on EOQ formula
Fixed order quantity (FOQ) - order a fixed quantity every time.
Lot for lot (L4L) - order the exact amount from net requirements
order n periods of supply
period order quantity (POQ) - order quantity may vary, but the interval between orders
remains fixed.
The order policy code that will always generate a planned order quantity that is equal to
the net requirement for the period - Answers-A) Lot for lot
Inventory Status Data - Answers-Allocation: units reserved for or allocated to specific
planned orders.
On hand balance
On order quantity/Scheduled receipts
With FIFO, if prices are INCREASING, what will happen to the inventory value and the
COGS? - Answers-high and low, respectively.
With FIFO, if prices are DECREASING, what will happen to the inventory value and the
COGS? - Answers-high and low, respectively.
A business bought 100 units in April, 100 in May and 100 in June. If the first quarter
inventory ended with 0 units and the second quarter usage was 210 units.
1) what is my COGS and the value of my inventory left using FIFO?
2)1) what is my COGS and the value of my inventory left using LIFO? - Answers-
1)COGS = 2,340 and inventory = 1,260
2)COGS = 2700 and inventory = 900
last in, first out (LIFO) - Answers-A method of inventory valuation for accounting
purposes. The accounting assumption is that the most recently received (last in) is the
first to be used or sold (first out) for costing purposes, but there is no necessary
relationship with the actual physical movement of specific items. See: average cost
systems.
With LIFO, if prices are INCREASING, what will happen to the inventory value and the
COGS? - Answers-low and high, respectively.
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