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,TesttBanktManaTest Bank Managerial Accounting: Creating Value in a
Dynamic Business Environment, 13th Edition by Ronald
HiltoneatingtValuetintatDynamictBusinesstEnvironment,t13thtEd
itiontbytRonaldtHilton
AppendixtIII
1) ThetEOQtmodeltistatmathematicalttooltfortdeterminingtthetordertquantitytthat:
A) maximizestthetcoststoftorderingtandtholdingtinventory.
B) equalstthetcoststoftorderingtandtholdingtinventory.
C) minimizestthetcoststoftorderingtandtholdingtinventory. AlltChapters
D) hastnoteffecttontthetcoststoftorderingtandtholdingtinventory.
E) nonetoftthesetanswerstaretcorrect.
AnswerstIncluded
2) Inventorytdecisionstinvolvetatdelicatetbalancetbetweentwhichtoftthetfollowingtclassestoftcos
ts?
A) Orderingtcosts,tadvertisingtcosts,tandtshippingtcosts
B) Advertisingtcosts,tholdingtcosts,tandtshortagetcosts
C) Orderingtcosts,tholdingtcosts,tandtshortagetcosts
D) Orderingtcosts,tshippingtcosts,tandtshortagetcosts
E) Shippingtcosts,tholdingtcosts,tandtshortagetcosts
3) Whichtonetoftthetfollowingtisttruetoftatjust-in-timet(JIT)tsystem?
A) JITtsystemtusestat“pull”tapproachttotcontrollingtmanufacturing
B) Inventorytoftrawtmaterialstandtpartstaretkepttastatbuffer
C) Inventorytoftpartiallytcompletedtpartstaretkepttastatbuffer
D) Finishedtgoodstaretkepttastatbuffer
E) Nonetoftthetanswerstaretcorrect
4) WhichtonetoftthetfollowingtisttruetoftEconomictOrdertQuantityt(EOQ)?
A) ThetEOQtapproachttakestthetviewtthattsometinventorytistnecessarytintorderttotopt
imizetthetordertquantity
B) Istcalculatestastthetsquaretroottoftthetfollowing:t(2t×tannualtrequirementt×tcosttpertord
er)t÷tannualtholdingtcosttpertunit
C) ThetgraphicaltapproachtistonetmethodtoftcalculatingtEOQ
D) Atmathematicalttooltfortdeterminingtthetordertquantitytthattminimizestthetcosttoftord
eringtandtholdingtinventory
E) Alltoftthetanswerstaretcorrect
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,5) WhichtoftthetfollowingtistatwaytthattJITtefficienciestaretachieved?
A) Negotiatingtlong-termtsupplytagreements
B) Eliminatingtinspections
C) Reducingtthetnumbertoftvendors
D) Makingtlesstfrequenttpayments
E) Alltoftthetanswerstaretcorrect
6) Inventorytholdingtcoststtypicallytinclude:
A) clericaltcoststoftpurchase-ordertpreparation.
B) coststoftdeterioration,ttheft,tortspoilage.
C) coststassociatedtwithtlosttsalesttotcustomers.
D) forgonetinteresttontmoneyttiedtuptintinventory.
E) bothtcoststoftdeterioration,ttheft,tortspoilagetandtforgonetinteresttontmoneyttiedtuptintinv
entory.
7) Inventorytholdingtcoststwouldttypicallytincludetalltoftthetfollowingtexcept:
A) insurance.
B) theft.
C) transportation.
D) obsolescence.
E) warehousetrent.
8) Whichtoftthetfollowingtistclassifiedtastantinventorytshortagetcost?
A) Purchasetordertpreparation
B) Productiontdisruption
C) Losttsalestandtlosttcustomers
D) Spoilage
E) Bothtproductiontdisruptiontandtlosttsalestandtlosttcustomers
9) Atttheteconomictordertquantity:
A) totaltannualtinventorytcosts,tholdingtcosts,tandtorderingtcoststaretalltminimized.
B) totaltannualtinventorytcoststandtholdingtcoststaretminimized.
C) totaltannualtinventorytcoststaretminimized,tandtholdingtcoststequaltorderingtcosts.
D) totaltannualtinventorytcoststaretminimized,tandtholdingtcoststexceedtorderingtcosts.
E) totaltannualtinventorytcoststaretminimized,tandtorderingtcoststexceedtholdingtcosts.
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, 10) LangdontEnterprisestusestanteconomictordertquantitytmodeltandthastdeterminedtantoptimaltord
ertsizetoft2,200tunits.tAnnualtdemandtist44,000tunits,torderingtcoststaret$60tpertorder,tandthold
ingtcoststaret$6tpertunit.tThetcompany'stannualtholdingtcoststtotal:
A) $13,200.
B) $14,400.
C) $485,200.
D) $265,200.
E) nonetoftthetanswerstistcorrect.
11) LangdontEnterprisestusestanteconomictordertquantitytmodeltandthastdeterminedtantoptimaltord
ertsizetoft500tunits.tAnnualtdemandtist10,000tunits,torderingtcoststaret$50tpertorder,tandtholding
tcoststaret$4tpertunit.tThetcompany'stannualtholdingtcoststtotal:
A) $2,000.
B) $3,000.
C) $21,000.
D) $41,000.
E) nonetoftthetanswerstistcorrect.
12) ReflectiontGraphicstusestatspecialtpurposetpapertont80%toftitstjobs.tThetpapertistpurchasedtint3
10-
sheettpackagestattatcosttoft$310tpertpackage.tManagementtestimatestthattthetcosttoftplacingtand
treceivingtattypicaltordertist$36,tandtthetannualtcosttoftcarryingtatpackagetintinventorytist$3.60.t
ReflectiontGraphicstusest4,700tpackagestoftpaperteachtyear.tProductiontistconstant,tandtthetlea
dttimettotreceivetantordertisttwotweek.
Theteconomictordertquantitytistapproximately:
Note:tRoundtyourtfinaltanswerttotthetnearesttwholetnumber.
A) 307tpackages.
B) 4,018tpackages.
C) 2,093tpackages.
D) 1,636tpackages.
E) 1,166tpackages.
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