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Accounting Information Systems, 13e (Romney/Steinbart)
Chapter 14 The Production Cycle
14.1 Describe the major business activities and related information processing operations
performed in the production cycle.
1) The AIS compiles and feeds information among the business cycles. What is the relationship
between the revenue and production cycles regarding the exchange of information?
A) The revenue cycle provides sales forecast and customer order information to the production
cycle, but the production cycle sends information back to revenue about finished goods
production.
B) The revenue cycle receives information from the production cycle about raw materials needs.
C) The production cycle sends cost of goods manufactured information back to the revenue
cycle.
D) The production cycle does not exchange information with the revenue cycle.
2) Identify a key feature associated with materials requirements planning.
A) determining economic order quantity for all materials
B) minimizing or eliminating carrying and stockout costs
C) determining the optimal reorder points for all materials
D) reducing required inventory levels by scheduling production, rather than estimating needs
3) The production cycle differs from the revenue and expenditure cycles for all the following
reasons except
A) cost accounting is involved in all activities.
B) not all organizations have a production cycle.
C) there are no direct external data sources or destinations.
D) very little technology exists to make activities more efficient.
4) How does an MRP inventory system reduces inventory levels?
A) by reducing the uncertainty regarding when materials are needed
B) by receiving materials exactly when needed and in exact quantities
C) by computing the exact costs of purchasing and carrying inventory
D) none of the above
5) Which of the following is not a product design objective?
A) Design a product that meets customer requirements.
B) Design a quality product.
C) Minimize production costs.
D) Make the design easy to track for cost accounting purposes.
6) The operations list shows
A) the labor and machine requirements.
B) the steps and operations in the production cycle.
C) the time expected to complete each step or operation.
D) all of the above
7) "Push manufacturing" is also known as
A) manufacturing resource planning (MRP).
B) just-in-time manufacturing system (JIT).
C) the economic order quantity (EOQ) system.
D) ahead-of-time production implementation (ATPI).
8) "Pull manufacturing" is also known as
A) manufacturing resource planning (MRP).
B) just-in-time manufacturing system (JIT).
C) the economic order quantity (EOQ) system.
D) ahead-of-time production implementation (ATPI).
9) What is the main difference between MRP-II and JIT manufacturing systems?
A) The length of the planning horizon
B) JIT uses long-term customer demand for planning purposes, but MRP-II uses short-term
customer demand for planning purposes.
C) MRP-II relies on EDI, but JIT does not.
D) There are no significant differences between MRP-II and JIT.
10) A master production schedule is used to develop detailed
A) timetables of daily production and determine raw material needs.
B) reports on daily production and material usage.
C) daily reports on direct labor needs.
D) inventory charts.
11) The ________ is the production cycle document that specifies the quantity of each product to
be produced and when production should begin.
A) receiving report
B) bill of lading
C) master production schedule
D) operations list
12) What information is necessary to create the master production schedule?
A) engineering department specifications and inventory levels
B) engineering department specifications and sales forecasts
C) special orders information and engineering department specifications
D) sales forecasts, special orders information, and inventory levels
13) The ________ authorizes the transfer of raw materials from the storeroom to the production
floor.
A) bill of materials
B) production order
C) materials requisition
D) move ticket
14) ________ is an efficient way to track and process information about raw materials used in
production.
A) A just-in-time inventory system
B) Identifying materials with bar codes or RFID tags
C) A materials resources planning inventory system
D) Job-order costing
15) The use of various forms of information technology in the production process is referred to
as
A) computerized investments and machines.
B) computerized integration of machines.
C) computer-integrated manufacturing.
D) computer intense manufacturing.
16) Using technology such as robots and computer-controlled machinery to shift from mass
production to custom order manufacturing is referred to as
A) computer integrated manufacturing (CIM).
B) lean manufacturing.
C) Six Sigma.
D) computer-aided design (CAD).
17) Direct labor must be tracked and accounted for as part of the production process.
Traditionally, direct labor was tracked using ________ but an AIS enhancement is to use
________ to record and track direct labor costs.
A) job-time tickets; coded identification cards
B) move tickets; coded identification cards
C) employee earnings records; job-time tickets
D) time cards; electronic time entry terminals
18) Yasamin Roshni owns and operates a small deli in Miami, Florida. She maintains a file that
contains the ingredients used to make each of her famous subs. The ingredients needed to make a
specific sub are most similar to a(n)
A) operations list.
B) production order.
C) bill of materials.
D) materials requisition.
19) Yasamin Roshni owns and operates a small deli in Miami, Florida.. She maintains a file that
lists the steps required to make each of her famous subs. These step-by-step instructions are
examples of a(n)
A) operations list.
B) bill of materials.
C) production order.
D) materials requisition.
20) Yasamin Roshni owns and operates a small deli in Miami, Florida. Each morning she
prepares a list that describes the quantity and variety subs that will be prepared during the day.
This list is an example of a(n)
A) bill of materials.
B) operations list.
C) materials requisition.
D) production order.
21) Yasamin Roshni owns and operates a small deli in Miami, Florida. Each afternoon, she
prepares a shopping list that describes the quantity and variety of ingredients that she will
purchase in the evening from her wholesaler. The shopping list is an example of a(n)
A) bill of materials.
B) materials requisition.
C) operations list.
D) production order.
22) Labor productivity is measured by the quantity produced divided by the labor time required
to produce it. All other things held constant, an increase in labor productivity will increase
throughput by
A) increasing productive capacity.
B) increasing productive processing time.
C) increasing yield.
D) increasing all components of throughput.
23) Sule Technologies installed a new production monitoring system that will reduce system
breakdowns by 35%. The new system will increase throughput by
A) increasing productive capacity.
B) increasing yield.
C) increasing productive processing time.
D) increasing all components of throughput.
24) Gulshan Parvana operates a machine shop in Istanbul, Turkey. She places bids on small
projects in the metropolitan area. Which of the following is most likely to be a cost driver that
should be considered when determining how to allocate utility costs?
A) number of projects completed
B) number of units produced
C) number of labor hours
D) sales revenue
25) Sule Technologies initiated a just-in-time inventory system in 2013. Now the production
manager, Chan Ziaou, wants to apply the same principles to the entire production process. His
recommendation is that Sule adopt a
A) master production scheduling system.
B) lean manufacturing system.
C) manufacturing resource planning system.
D) computer-integrated manufacturing system.
26) This document appears to be a
A) Materials Requisition.
B) Production Order.
C) Bill of Materials.
D) Move Ticket between production and warehouse functions.
27) How many side panels should the company budget for use in week two?
Bill of Materials
Finished Product: DVD Player
Part Number
105
125
148
155
173
195
199
Description
Control Unit
Back Panel
Side Panel
Top/Bottom Panel
Timer
Front Panel
Screw
Quantity
1
1
2
2
1
1
6
Operations List for: Create Side Panel
Operation Number
105
106
124
142
155
Description
Cut to shape
Corner cut
Turn and shape
Finish
Paint
Machine Number
ML15-12
ML15-9
S28-17
F54-5
P89-1
Standard Time (m:s)
2:00
3:15
4:00
7:10
9:30
28) How many labor hours should the company budget in week three to produce all side panels
needed? Round to the nearest hour, if necessary.
Bill of Materials
Finished Product: DVD Player
Part Number
105
125
148
155
173
195
199
Description
Control Unit
Back Panel
Side Panel
Top/Bottom Panel
Timer
Front Panel
Screw
Quantity
1
1
2
2
1
1
6
Operations List for: Create Side Panel
Operation Number
105
106
124
142
155
Description
Cut to shape
Corner cut
Turn and shape
Finish
Paint
Machine Number
ML15-12
ML15-9
S28-17
F54-5
P89-1
Standard Time (m:s)
2:00
3:15
4:00
7:10
9:30
29) Identify and discuss the two documents that are the result of product design activities.
30) Explain what CIM means and its benefits.
31) Identify and discuss the two common methods of production planning.
32) How can CAD software help improve the efficiency and effectiveness of the product design
process?
A) It can eliminate the costs associated with creating and destroying physical prototypes.
B) It can simulate how new products will be manufactured.
C) It can store all the data associated with all products.
D) All of the above
33) How can PLM software improve the efficiency and effectiveness of the product design
process?
A) It can eliminate the costs associated with creating and destroying physical prototypes.
B) It can simulate how new products will be manufactured.
C) It can store all the data associated with all products.
D) All of the above
34) What issue did Airbus encounter when using CAD software to help design the A380
Superjumbo airliner?
A) The actual A380 was heavier than the CAD model.
B) The actual A380 was not able to carry as much weight as the CAD model.
C) Design teams used different versions of the same CAD software, resulting in key information
loss.
D) The CAD software was not advanced enough to help design the A380.
35) MRP-II is to MRP, as lean manufacturing is to
A) EOQ.
B) JIT.
C) push manufacturing.
D) reorder point.
1) For replacement of inventories and assets destroyed by fire or other disasters, an organization
needs
A) stand-by facilities.
B) adequate insurance coverage.
C) source data automation.
D) All of the above are correct.
2) Which process or activity relates to overproduction?
A) product design
B) planning and scheduling
C) production operations
D) cost accounting
3) What specific control can help restrict the rights of authorized users to only the portion of a
database needed to complete their specific job duties?
A) an access control matrix
B) passwords and user IDs
C) closed-loop verification
D) specific authorization
4) An organization can implement which of the following controls to reduce the threat of
inventory theft or damage?
A) review and approval of fixed asset acquisitions
B) improved and more timely reporting
C) better production and planning systems
D) document all movement of inventory through the production process
5) The best control procedure for accurate data entry is
A) the use of on-line terminals.
B) an access control matrix.
C) passwords and user IDs.
D) automation of data collection.
6) Which of the following organization controls should be implemented and maintained to
counteract the general threat that the loss of production data will greatly slow or halt production
activity?
A) Store key master inventory and production order files on-site only to prevent their theft.
B) Back up data files only after a production run has been physically completed.
C) Access controls should apply to all terminals within the organization.
D) Allow access to inventory records from any terminal within the organization to provide
efficient data entry.
7) The threat of loss of data exposes the company to
A) the loss of assets.
B) ineffective decision making.
C) inefficient manufacturing.
D) All of the above are correct.
8) The expenses associated with a product recall are ________ costs.
A) prevention
B) inspection
C) internal failure
D) external failure
9) ________ costs are expenses associated with quality assurance activities.
A) Prevention
B) Inspection
C) Internal failure
D) External failure
