89) Software that often includes components to facilitate process planning, line analysis, and
statistical process control, among other tasks, is called
A) CIM.
B) MRP II.
C) CADD.
D) CAM.
90) The system that uses statistical process control to determine whether a manufacturing
process is within limits is
A) CADD.
B) CAM.
C) CIM.
D) MRP II.
91) Which of the following occurs when a manufacturing facility uses statistical process control?
A) A plan is developed to describe the routing of each production process.
B) Production processes can be quickly reconfigured.
C) Process outputs are compared to engineering specifications.
D) A programmable device moves material, parts, tools, or specialized devices to perform tasks.
92) MRP systems integrate several subsystems. Which subsystem below is not integrated into
the MRP system?
A) Production planning
B) Production scheduling
C) Reporting
D) Procurement
93) A manufacturing system’s flexibility and speed of response depends largely on the degree to
which its components are integrated. Which technology below would effectively integrate the
company’s system with the systems of its suppliers and customers?
A) EDI
B) Automatic identification
C) Distributed processing
D) All of these answers are correct.
94) Which of the following is false regarding the standard UPC bar code system?
A) Both customer and supplier can use the same UPC product code.
B) Problems with vendor-based coding usually result when a vendor uses different codes for
different items.
C) UPC assigns a six-digit code to each vendor.
D) UPC coding is vendor-based coding which can be applied at any point.
95) Which of the following is a common benefit of UPC standardization?
A) Paper invoices are no longer needed.
B) Inventory levels are reduced.
C) Cross-referencing of inventory codes is eliminated.
D) Physical inventory counts are no longer needed.
96) The production planning report that discloses the availability of labor and machine resources
is the
A) production schedule.
B) sales forecast.
C) raw materials status report.
D) factor availability report.
97) The focal point of the materials requirements planning system (MRP) is to
A) manufacture inventory items on time.
B) report the sequencing of all operations connected with production.
C) produce the master production schedule.
D) disclose all data related to product components.
98) In a production planning system, the production status file is an input to which of the
following?
A) Production scheduling program
B) Inventory update program
C) Report generator program
D) Production planning system
99) In a production planning system, output from the production planning program includes
which of the following?
A) Production loading file
B) Routings
C) Completed production order file
D) Finished goods stock status report
100) In a production planning system, the production status file is used as an input for which of
the following groups of applications?
A) Scheduling and cost accounting
B) Cost accounting and planning
C) Scheduling and reporting
D) Reporting and cost accounting
101) In a production planning system, the production loading file is an input to which of the
following?
A) Production planning program
B) Production scheduling application
C) Cost accounting program
D) Inventory update program
102) Data is required from which of the following to build a production data file?
A) Materials requisition data
B) Goods receipt data
C) RTG data
D) Materials requisition and RTG data are both required.
103) Which of the following outputs from the cost accounting program is used in the next cycle
of production planning and scheduling?
A) Resource usage file
B) Production order file
C) Production status file
D) Summary report
104) In a production planning system, which of the following files updates the finished goods
inventory file?
A) Completed production order file
B) Production status file
C) Production data file
D) Production loading file
105) Which of the following reports specifies production cost variances?
A) Completed production cost report
B) Resource usage report
C) Factor availability report
D) Production order report
106) In traditional accounting methods, predetermined overhead rates are based on
A) machine hours.
B) utilities consumed.
C) direct labor hours or direct labor costs.
D) depreciable lives of machinery and equipment.
107) The predetermined overhead application rate is computed as
A) budgeted overhead cost divided by budgeted activity.
B) total labor cost divided by total machine hours.
C) budgeted activity divided by budgeted overhead cost.
D) total machine hours divided by total labor cost.
108) CIM affects manufacturing overhead primarily by
A) increasing direct materials costs and decreasing direct labor hours.
B) decreasing manufacturing overhead overall.
C) increasing manufacturing overhead overall.
D) increasing machine costs and decreasing direct labor hours.
109) Activity-based costing (ABC) systems allocate overhead differently than traditional cost
accounting systems. The difference between an ABC and a traditional cost accounting system is
that
A) traditional systems calculate several overhead rates, one for each manufacturing activity.
B) an ABC system uses a single allocation overhead rate.
C) ABC systems calculate several overhead rates, one for each manufacturing activity.
D) a traditional cost accounting system uses two overhead allocation rates: one for actual activity
and one for estimates (or standards).
110) Which of the following is a way to identify cost drivers for activity-based costing?
A) Analytical review
B) Time-in-process measures
C) Volume measures
D) Regression analysis
111) The bill of material module in the MRP II system is used to communicate the structure of a
product, as it is in MRP. The MRP II system extends this module’s capability to include
A) maintenance of engineering or product drawings from a CADD system.
B) the sequence of operations required to manufacture a component or assembly.
C) maintaining the assembly schedules for specific configurations.
D) creating a packet that contains order, material list, routing, and drawing information.
112) Which of the following is a common consequence of implementing JIT in an MRP II/CIM
environment?
A) Increase in setup costs
B) Reduction in the size of each production lot
C) Longer lead time needed to schedule production
D) Increase in buffer stocks of raw materials
113) Totally computerized systems such as a quick response systems
A) eliminate traditional internal control problems.
B) still require human intervention in the transaction processing cycle.
C) intensify certain internal control problems.
D) still require paper documents in EDI applications.
114) In a quick response manufacturing system, internal controls
A) should be established after the information system is designed and tested.
B) must be included within the design and development of the system.
C) should be based on existing manual controls.
D) can be excluded in such a system because there is so little human intervention in processing
transactions.
115) Presented below is a list of terms relating to accounting information systems, followed by
definitions of those terms.
Required: Match the letter next to each definition with the appropriate term. Each answer will be
used only once.
________ 1. Advanced integration technologies (AIT)
________ 2. Bill of materials
________ 3. Solids modeling
________ 4. Job time cards
________ 5. Cost driver
________ 6. Vendor-based coding
________ 7. Process costing
________ 8. EOQ
________ 9. Routings
________ 10. Inventory status report
A. Lists the raw materials that are necessary to produce a product
B. The optimum order amount that minimizes total inventory cost
C. Consists of EDI, automatic identification, and distributed processing
D. An element that influences the total cost of an activity
E. A summary that details the resources available in inventory
F. Used to document the amount of labor time that is spent working on each production project
G. The mathematical representation of a part as a solid object in computer memory
H. Having a purchaser (i.e., retailer) utilize a vendor’s product codes as its own product codes
for the same products
I. Production costs are compiled by department rather than by job
J. Documents that indicate the sequence of operations required to manufacture a product
116) Presented below is a list of terms relating to accounting information systems, followed by
definitions of those terms.
Required: Match the letter next to each definition with the appropriate term. Each answer will be
used only once.
________ 1. RTGs
________ 2. Job costing
________ 3. Reorder point
________ 4. Economic order quantity (EOQ)
________ 5. Just-in-time production
________ 6. Computer-integrated manufacturing
________ 7. Flexible manufacturing system (FMS)
________ 8. Finite element analysis
________ 9. Job
________ 10. Fixed asset register
A. A synonym for production order
B. Documents that indicate the sequence of operations required to manufacture a product
C. A system in which items are only produced as they are required in subsequent operations
D. The order quantity that minimizes total inventory cost.
E. A systematic list of assets such as land, buildings, machines, and equipment that is
maintained for control purposes
F. A CAM system that incorporates programmable production processes that can be quickly
reconfigured to produce different types of products
G. A mathematical model used to determine mechanical characteristics, such as stresses of
structures under load
H. Integrates the physical manufacturing system and the manufacturing resource planning
(MRP II) systems
I. The level of inventory at which it is desirable to order or produce additional items to avoid
an out-of-stock condition
J. Production costs are assigned to production orders
117) Presented below is a list of computer file names found in quick-response manufacturing
systems, followed by definitions of the terms.
Required: Match the letter next to each definition with the appropriate term. Each answer will be
used only once.
________ 1. Completed production order file
________ 2. Master operations file
________ 3. Production data file
________ 4. Inventory file
________ 5. Routings (RTGs) file
________ 6. Resource usage file
________ 7. Master production plan file
________ 8. Bill of materials file
________ 9. Production status file
________ 10. Production loading file
A. Contains information about the work center, length of time, and tooling required to complete
each production task
B. Contains production requirements associated with open production orders
C. Lists all cost data for completed production orders
D. Shows actual and standard material, labor, and operation costs for work completed
E. Contains a record for each product manufactured, detailing its components
F. Contains both materials requisition and routing data to input into the cost accounting
program
G. Contains a record for each product, detailing the machine and labor sequences required for
its production
H. Contains a record for each open production order
I. Updated by the completed production order file
J. Processed against the bill of materials, production status, and master operations files in the
production planning program
118) The following production information has been gathered from the records of the New
Processes Manufacturing Company:
Product: Alpha Zeta
Units Produced 1,500 7,500
Direct material cost / unit $ 10 $ 22
Direct labor cost / unit 14 28
Direct labor hours / unit 1 2
Production machine setup 3 times 3 times
Engineering changes 1 time 2 times
Additional production information is as follows:
• Total setup costs (a part of total manufacturing overhead) = $21,500
• Total engineering changes (a part of total manufacturing overhead) = $9,500
• Total annual overhead cost = $288,750
• Total annual direct labor hours = 16,500
Required:
A. Calculate the ABC overhead allocation rate using the cost drivers given above.
B. Calculate the total cost per unit for each product using activity-based costing for the overhead
allocation.
119) The following production information for the Murray Manufacturing Company has been
gathered for part number AB7 (which is used in the manufacture of one of its products):
• Murray Manufacturing buys part AB7 from a supplier.
• Murray estimates that it will need 5,400 parts this month (which has 30 days).
• Each part costs $6.89, and it costs Murray $750 to place an order for part AB7.
• It takes 8 days to receive an order of part AB7 from Murray’s supplier.
• All parts orders are received, inspected, and checked into inventory the same day shipment is
received.
• Inventory carrying costs are 20% of the inventory value for the month.
Required:
A. Compute the economic order quantity in units (rounded to the nearest unit) for part AB7.
B. Compute the reorder point (rounded to the nearest unit) for part number AB7.
120) World Voice is a long-distance telephone service provider that is in the process of
overhauling its fixed-asset applications system.
Required: Identify the individual data items that should be included in the database for each of
the company’s fixed assets.
121) Southwestern Pride is a company that processes and packs vegetables for sale in retail
stores. Southwestern Pride uses a CIM environment in its facility. Sensors on its production lines
automatically record data regarding materials used (processed vegetables, added ingredients,
jars, lids, labels, boxes, etc.) and the progress of production lots. Employees also input data from
workstations in the various production areas (receiving, cleaning, cooking, and canning).
Required: Assuming that the company’s databases utilize direct-access organization, what files
and records could be updated directly from the production floor?
122) Explain how activity-based costing differs from traditional overhead allocation techniques.
123) Distinguish between MRP and MRP II.
124) Why is it important to design control systems in a quick-response manufacturing system
before the manufacturing system is implemented?
125) Describe RFID including the benefits and drawbacks of this technology. Also compare this
technology to that of bar codes.
126) What elements are involved in determining what products should be manufactured? How
does the transaction cycle controls assist in such a decision?
127) Discuss the financial benefits of just-in-time production systems.