TEST BANK MANAGERIAL ACCOUNTING: CREATING VALUE IN A DYNAMIC BUSINESS
ENVIRONMENT, 13TH EDITION BY RONALD HILTON
VVVVVVVVVVVVVVVVVVVVVVVVVV ***with answers keys***
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Appendix III V
1) The VEOQ Vmodel Vis Va Vmathematical Vtool Vfor Vdetermining Vthe Vorder Vquantity Vthat:
A) maximizes Vthe Vcosts Vof Vordering Vand Vholding Vinventory.
B) equals Vthe Vcosts Vof Vordering Vand Vholding Vinventory.
C) minimizes Vthe Vcosts Vof Vordering Vand Vholding Vinventory.
D) has Vno Veffect Von Vthe Vcosts Vof Vordering Vand Vholding
inventory.
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E) none Vof Vthese Vanswers Vare correct.
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2) Inventory Vdecisions Vinvolve Va Vdelicate Vbalance Vbetween Vwhich Vof Vthe Vfollowing
Vclasses Vof Vcosts?
A) Ordering Vcosts, Vadvertising Vcosts, Vand Vshipping Vcosts
B) Advertising Vcosts, Vholding Vcosts, Vand Vshortage Vcosts
C) Ordering Vcosts, Vholding Vcosts, Vand Vshortage Vcosts
D) Ordering Vcosts, Vshipping Vcosts, Vand Vshortage Vcosts
E) Shipping Vcosts, Vholding Vcosts, Vand Vshortage Vcosts
3) Which Vone Vof Vthe Vfollowing Vis Vtrue Vof Va Vjust-in-time V(JIT) Vsystem?
A) JIT Vsystem Vuses Va V“pull” Vapproach Vto Vcontrolling Vmanufacturing
B) Inventory Vof Vraw Vmaterials Vand Vparts Vare Vkept Vas Va Vbuffer
C) Inventory Vof Vpartially Vcompleted Vparts Vare Vkept Vas Va Vbuffer
D) Finished Vgoods Vare Vkept Vas Va Vbuffer
E) None Vof Vthe Vanswers Vare Vcorrect
4) Which Vone Vof Vthe Vfollowing Vis Vtrue Vof VEconomic VOrder VQuantity V(EOQ)?
A) The VEOQ Vapproach Vtakes Vthe Vview Vthat Vsome Vinventory Vis Vnecessary Vin
order Vto Voptimize Vthe Vorder Vquantity
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B) Is Vcalculates Vas Vthe Vsquare Vroot Vof Vthe Vfollowing: V(2 V× Vannual Vrequirement V×
Vcost Vper Vorder) V÷ Vannual Vholding Vcost Vper Vunit
C) The Vgraphical Vapproach Vis Vone Vmethod Vof Vcalculating VEOQ
D) A Vmathematical Vtool Vfor Vdetermining Vthe Vorder Vquantity Vthat Vminimizes Vthe
Vcost Vof Vordering Vand Vholding Vinventory
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,E) All Vof Vthe Vanswers Vare Vcorrect
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,5) Which Vof Vthe Vfollowing Vis Va Vway Vthat VJIT Vefficiencies Vare Vachieved?
A) Negotiating Vlong-term Vsupply Vagreements
B) Eliminating Vinspections
C) Reducing Vthe Vnumber Vof Vvendors
D) Making Vless Vfrequent Vpayments
E) All Vof Vthe Vanswers Vare Vcorrect
6) Inventory Vholding Vcosts Vtypically Vinclude:
A) clerical Vcosts Vof Vpurchase-order Vpreparation.
B) costs Vof Vdeterioration, Vtheft, Vor Vspoilage.
C) costs Vassociated Vwith Vlost Vsales Vto Vcustomers.
D) forgone Vinterest Von Vmoney Vtied Vup Vin Vinventory.
E) both Vcosts Vof Vdeterioration, Vtheft, Vor Vspoilage Vand Vforgone Vinterest Von Vmoney Vtied
up Vin Vinventory.
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7) Inventory Vholding Vcosts Vwould Vtypically Vinclude Vall Vof Vthe Vfollowing Vexcept:
A) insurance.
B) theft.
C) transportation.
D) obsolescence.
E) warehouse Vrent.
8) Which Vof Vthe Vfollowing Vis Vclassified Vas Van Vinventory Vshortage Vcost?
A) Purchase Vorder Vpreparation
B) Production Vdisruption
C) Lost Vsales Vand Vlost Vcustomers
D) Spoilage
E) Both Vproduction Vdisruption Vand Vlost Vsales Vand Vlost Vcustomers
9) At Vthe Veconomic Vorder Vquantity:
A) total Vannual Vinventory Vcosts, Vholding Vcosts, Vand Vordering Vcosts Vare Vall Vminimized.
B) total Vannual Vinventory Vcosts Vand Vholding Vcosts Vare Vminimized.
C) total Vannual Vinventory Vcosts Vare Vminimized, Vand Vholding Vcosts Vequal Vordering Vcosts.
D) total Vannual Vinventory Vcosts Vare Vminimized, Vand Vholding Vcosts Vexceed Vordering Vcosts.
E) total Vannual Vinventory Vcosts Vare Vminimized, Vand Vordering Vcosts Vexceed Vholding Vcosts.
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, 10) Langdon VEnterprises Vuses Van Veconomic Vorder Vquantity Vmodel Vand Vhas Vdetermined Van
Voptimal Vorder Vsize Vof V2,200 Vunits. VAnnual Vdemand Vis V44,000 Vunits, Vordering Vcosts Vare
V$60 Vper Vorder, Vand Vholding Vcosts Vare V$6 Vper Vunit. VThe Vcompany's Vannual Vholding Vcosts
Vtotal:
A) $13,200.
B) $14,400.
C) $485,200.
D) $265,200.
E) none Vof Vthe Vanswers Vis Vcorrect.
11) Langdon VEnterprises Vuses Van Veconomic Vorder Vquantity Vmodel Vand Vhas Vdetermined Van
Voptimal Vorder Vsize Vof V500 Vunits. VAnnual Vdemand Vis V10,000 Vunits, Vordering Vcosts Vare V$50
Vper Vorder, Vand Vholding Vcosts Vare V$4 Vper Vunit. VThe Vcompany's Vannual Vholding Vcosts Vtotal:
A) $2,000.
B) $3,000.
C) $21,000.
D) $41,000.
E) none Vof Vthe Vanswers Vis Vcorrect.
12) Reflection VGraphics Vuses Va Vspecial Vpurpose Vpaper Von V80% Vof Vits Vjobs. VThe Vpaper Vis
Vpurchased Vin V310-sheet Vpackages Vat Va Vcost Vof V$310 Vper Vpackage. VManagement Vestimates
Vthat Vthe Vcost Vof Vplacing Vand Vreceiving Va Vtypical Vorder Vis V$36, Vand Vthe Vannual Vcost Vof
Vcarrying Va Vpackage Vin Vinventory Vis V$3.60. VReflection VGraphics Vuses V4,700 Vpackages Vof
Vpaper Veach Vyear. VProduction Vis Vconstant, Vand Vthe Vlead Vtime Vto Vreceive Van Vorder Vis Vtwo
Vweek.
The Veconomic Vorder Vquantity Vis Vapproximately:
Note: VRound Vyour Vfinal Vanswer Vto Vthe Vnearest Vwhole Vnumber.
A) 307 Vpackages.
B) 4,018 Vpackages.
C) 2,093 Vpackages.
D) 1,636 Vpackages.
E) 1,166 Vpackages.
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