Conversion Processes Test Bank Docx Chapter 11 1st Edition - Digital Test Bank | Accounting Info Systems 1e by Arline A. Savage. DOCX document preview.
Accounting Information Systems, 1e (Savage)
Chapter 11 Conversion Processes
1) Resources like ________ and ________ are combined and converted into a product that can be purchased and used.
A) raw materials, labor
B) finished goods, labor
C) raw materials, equipment
D) equipment, labor
Diff: 1
Learning Objective: 11.1 Describe the relationship between conversion processes, inventory, and supply chain management.
Section Reference: Introduction
AACSB: None
Bloom's: Knowledge
AICPA: AC: Systems and Process Management
2) Producing products to sell is the primary objective of a manufacturing business. Doing this successfully depends on an efficient and effective manufacturing conversion process. Manufacturing efficiency is a balance between three goals. These goals include: controlling the costs of resources, the rate of production, and what other goal?
A) Finished goods inventory levels
B) The quality of finished goods
C) The selling price of the finished goods
D) The location of production
Diff: 2
Learning Objective: 11.1 Describe the relationship between conversion processes, inventory, and supply chain management.
Section Reference: Introduction
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
3) Producing products to sell is the primary objective of a manufacturing business. Doing this successfully depends on an efficient and effective manufacturing conversion process. Manufacturing efficiency is a balance between three goals. These goals include: controlling the costs of resources, the quality of finished goods, and what other goal?
A) Finished goods inventory levels
B) The selling price of the finished goods
C) The rate of production
D) The location of production
Diff: 2
Learning Objective: 11.1 Describe the relationship between conversion processes, inventory, and supply chain management.
Section Reference: Introduction
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
4) Producing products to sell is the primary objective of a manufacturing business. Doing this successfully depends on an efficient and effective manufacturing conversion process. Manufacturing efficiency is a balance between three goals. These goals include: the rate of production, controlling the quality of finished goods, and what other goal?
A) Finished goods inventory levels
B) The selling price of the finished goods
C) The location of production
D) Controlling the costs of resources
Diff: 2
Learning Objective: 11.1 Describe the relationship between conversion processes, inventory, and supply chain management.
Section Reference: Introduction
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
5) Overall equipment effectiveness (OEE) is a key performance indicator that measures how well production resources are used by identifying the percentage of productive manufacturing time. An OEE of 100% means that ________, produced at the fastest speeds (100% performance), and manufactured without interruptions in production (100% availability). Management uses OEE to identify process and performance improvements potential.
A) all products produced are acceptable (100% quality)
B) all products produced are sold (100% sales)
C) all products produced are properly inventoried (100% finished)
D) all products produced are shipped (100% shipped)
Diff: 2
Learning Objective: 11.1 Describe the relationship between conversion processes, inventory, and supply chain management.
Section Reference: Introduction
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
6) Overall equipment effectiveness (OEE) is a key performance indicator that measures how well production resources are used by identifying the percentage of productive manufacturing time. An OEE of 100% means that all products produced are acceptable (100% quality), ________, and manufactured without interruptions in production (100% availability). Management uses OEE to identify process and performance improvement potential.
A) produced and sold (100% sales)
B) produced at the fastest speeds (100% performance)
C) produced and properly inventoried (100% finished)
D) produced and shipped (100% shipped)
Diff: 2
Learning Objective: 11.1 Describe the relationship between conversion processes, inventory, and supply chain management.
Section Reference: Introduction
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
7) Overall equipment effectiveness (OEE) is a key performance indicator that measures how well production resources are used by identifying the percentage of productive manufacturing time. An OEE of 100% means that all products produced are acceptable (100% quality), produced at the fastest speeds (100% performance), and ________. Management uses OEE to identify process and performance improvement potential.
A) manufactured and sold (100% sales)
B) manufactured and properly inventoried (100% finished)
C) manufactured without interruptions in production (100% availability)
D) manufactured and shipped (100% shipped)
Diff: 2
Learning Objective: 11.1 Describe the relationship between conversion processes, inventory, and supply chain management.
Section Reference: Introduction
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
8) What is the correct order for the Manufacturing Conversion Processes?
A) Product Development, Production Planning, Production Scheduling, Manufacturing Operations, Quality Management
B) Production Scheduling, Product Development, Production Planning, Manufacturing Operations, Quality Management
C) Product Development, Production Planning, Quality Management, Production Scheduling, Manufacturing Operations
D) Production Planning, Production Scheduling, Product Development, Manufacturing Operations, Quality Management
Diff: 2
Learning Objective: 11.1 Describe the relationship between conversion processes, inventory, and supply chain management.
Section Reference: Conversion Processes
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
9) What are the source document output(s) of the Product Development process?
A) Bill of materials, operations list
B) Production plan
C) Production schedule, production orders, material requisitions, move tickets
D) Production reports, job time tickets
Diff: 2
Learning Objective: 11.1 Describe the relationship between conversion processes, inventory, and supply chain management.
Section Reference: Conversion Processes
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
10) What are the source document output(s) of the Production Planning process?
A) Bill of materials, operations list
B) Production plan
C) Production schedule, production orders, material requisitions, move tickets
D) Production reports, job time tickets
Diff: 2
Learning Objective: 11.1 Describe the relationship between conversion processes, inventory, and supply chain management.
Section Reference: Conversion Processes
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
11) What are the source document output(s) of the Production Scheduling process?
A) Bill of materials, operations list
B) Production plan
C) Production schedule, production orders, material requisitions, move tickets
D) Production reports, job time tickets
Diff: 2
Learning Objective: 11.1 Describe the relationship between conversion processes, inventory, and supply chain management.
Section Reference: Conversion Processes
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
12) What are the source document output(s) of the Manufacturing Operations process?
A) Bill of materials, operations list
B) Production plan
C) Production schedule, production orders, material requisitions, move tickets
D) Production reports, job time tickets
Diff: 2
Learning Objective: 11.1 Describe the relationship between conversion processes, inventory, and supply chain management.
Section Reference: Conversion Processes
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
13) What are the source document output(s) of the Quality Management process?
A) Testing reports
B) Production plan
C) Production schedule, production orders, material requisitions, move tickets
D) Production reports, job time tickets
Diff: 2
Learning Objective: 11.1 Describe the relationship between conversion processes, inventory, and supply chain management.
Section Reference: Conversion Processes
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
14) Choose from the following selections the best definition of the Product Development process.
A) Transform product ideas into product specifications
B) Develop a long-term outlook of production activities
C) Schedule production
D) Manufacture the products
Diff: 1
Learning Objective: 11.1 Describe the relationship between conversion processes, inventory, and supply chain management.
Section Reference: Conversion Processes
AACSB: None
Bloom's: Knowledge
AICPA: AC: Systems and Process Management
15) Choose from the following selections the best definition of the Production Planning process.
A) Transform product ideas into product specifications
B) Develop a long-term outlook of production activities
C) Schedule production
D) Manufacture the products
Diff: 1
Learning Objective: 11.1 Describe the relationship between conversion processes, inventory, and supply chain management.
Section Reference: Conversion Processes
AACSB: None
Bloom's: Knowledge
AICPA: AC: Systems and Process Management
16) Choose from the following selections the best definition of the Production Scheduling process.
A) Transform product ideas into product specifications
B) Develop a long-term outlook of production activities
C) Schedule production
D) Manufacture the products
Diff: 1
Learning Objective: 11.1 Describe the relationship between conversion processes, inventory, and supply chain management.
Section Reference: Conversion Processes
AACSB: None
Bloom's: Knowledge
AICPA: AC: Systems and Process Management
17) Choose from the following selections the best definition of the Manufacturing Operations process.
A) Transform product ideas into product specifications
B) Develop a long-term outlook of production activities
C) Schedule production
D) Manufacture the products
Diff: 1
Learning Objective: 11.1 Describe the relationship between conversion processes, inventory, and supply chain management.
Section Reference: Conversion Processes
AACSB: None
Bloom's: Knowledge
AICPA: AC: Systems and Process Management
18) Choose from the following selections the best definition of the Quality Management process.
A) Test products for quality
B) Develop a long-term outlook of production activities
C) Schedule production
D) Manufacture the products
Diff: 1
Learning Objective: 11.1 Describe the relationship between conversion processes, inventory, and supply chain management.
Section Reference: Conversion Processes
AACSB: None
Bloom's: Knowledge
AICPA: AC: Systems and Process Management
19) Choose from the following selections the best definition of the bill of materials (BOM).
A) A document that specifies the components of a product, including descriptions and quantities of required raw materials and parts
B) A document that provides a sequence of production events
C) A document that provides a long-term outline of what and when products will be manufactured
D) A document that provides a short-term allocation of plant machinery and resources to the manufacturing of products
Diff: 1
Learning Objective: 11.1 Describe the relationship between conversion processes, inventory, and supply chain management.
Section Reference: Conversion Processes
AACSB: None
Bloom's: Knowledge
AICPA: AC: Systems and Process Management
20) Choose from the following selections the best definition of an operations list.
A) A document that specifies the components of a product, including descriptions and quantities of required raw materials and parts
B) A document that provides a sequence of production events
C) A document that provides a long-term outline of what and when products will be manufactured
D) A document that provides a short-term allocation of plant machinery and resources to the manufacturing of products
Diff: 1
Learning Objective: 11.1 Describe the relationship between conversion processes, inventory, and supply chain management.
Section Reference: Conversion Processes
AACSB: None
Bloom's: Knowledge
AICPA: AC: Systems and Process Management
21) Choose from the following selections the best definition of a production plan.
A) A document that specifies the components of a product, including descriptions and quantities of required raw materials and parts
B) A document that provides a sequence of production events
C) A document that provides a long-term outline of what and when products will be manufactured
D) A document that provides a short-term allocation of plant machinery and resources to the manufacturing of products
Diff: 1
Learning Objective: 11.1 Describe the relationship between conversion processes, inventory, and supply chain management.
Section Reference: Conversion Processes
AACSB: None
Bloom's: Knowledge
AICPA: AC: Systems and Process Management
22) Choose from the following selections the best definition of a production schedule.
A) A document that specifies the components of a product, including descriptions and quantities of required raw materials and parts
B) A document that provides a sequence of production events
C) A document that provides a long-term outline of what and when products will be manufactured
D) A document that provides a short-term allocation of plant machinery and resources to the manufacturing of products
Diff: 1
Learning Objective: 11.1 Describe the relationship between conversion processes, inventory, and supply chain management.
Section Reference: Conversion Processes
AACSB: None
Bloom's: Knowledge
AICPA: AC: Systems and Process Management
23) Choose from the following selections the best definition of a master production schedule (MPS).
A) A document where every production operation is scheduled at a specific calendar time, resources and workers are assigned, and steps are outlined to utilize all resources effectively
B) A document that authorizes the movement of raw materials from inventory into production
C) A barcode tag to authorize and track movements of a single manufacturing job from one location in production to another
D) A document that summarizes the total manufacturing cost of a product, which is important in recording the cost of inventory and cost of goods sold in the general ledger
Diff: 1
Learning Objective: 11.1 Describe the relationship between conversion processes, inventory, and supply chain management.
Section Reference: Conversion Processes
AACSB: None
Bloom's: Knowledge
AICPA: AC: Systems and Process Management
24) Choose from the following selections the best definition of a materials requisition request.
A) A document where every production operation is scheduled at a specific calendar time, resources and workers are assigned, and steps are outlined to utilize all resources effectively
B) A document that authorizes the movement of raw materials from inventory into production
C) A barcode tag to authorize and track movements of a single manufacturing job from one location in production to another
D) A document that summarizes the total manufacturing cost of a product, which is important in recording the cost of inventory and cost of goods sold in the general ledger
Diff: 1
Learning Objective: 11.1 Describe the relationship between conversion processes, inventory, and supply chain management.
Section Reference: Conversion Processes
AACSB: None
Bloom's: Knowledge
AICPA: AC: Systems and Process Management
25) Choose from the following selections the best definition of a move ticket.
A) A document where every production operation is scheduled at a specific calendar time, resources and workers are assigned, and steps are outlined to utilize all resources effectively
B) A document that authorizes the movement of raw materials from inventory into production
C) A barcode tag to authorize and track movements of a single manufacturing job from one location in production to another
D) A document that summarizes the total manufacturing cost of a product, which is important in recording the cost of inventory and cost of goods sold in the general ledger
Diff: 1
Learning Objective: 11.1 Describe the relationship between conversion processes, inventory, and supply chain management.
Section Reference: Conversion Processes
AACSB: None
Bloom's: Knowledge
AICPA: AC: Systems and Process Management
26) Choose from the following selections the best definition of a production report.
A) A document where every production operation is scheduled at a specific calendar time, resources and workers are assigned, and steps are outlined to utilize all resources effectively
B) A document that authorizes the movement of raw materials from inventory into production
C) A barcode tag to authorize and track movements of a single manufacturing job from one location in production to another
D) A document that summarizes the total manufacturing cost of a product, which is important in recording the cost of inventory and cost of goods sold in the general ledger
Diff: 1
Learning Objective: 11.1 Describe the relationship between conversion processes, inventory, and supply chain management.
Section Reference: Conversion Processes
AACSB: None
Bloom's: Knowledge
AICPA: AC: Systems and Process Management
27) Which control activity listed below is a product development control activity?
A) Regularly analyze warranty and repair costs.
B) Manufacture products according to authorized BOM, BOO, and MPS documents.
C) Automate manufacturing operations.
D) Adhere to industry regulations and safety standards.
Diff: 2
Learning Objective: 11.1 Describe the relationship between conversion processes, inventory, and supply chain management.
Section Reference: Conversion Processes
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
28) Which control activity listed below is a production planning and scheduling control activity?
A) Regularly analyze warranty and repair costs.
B) Manufacture products according to authorized BOM, BOO, and MPS documents.
C) Automate manufacturing operations.
D) Adhere to industry regulations and safety standards.
Diff: 2
Learning Objective: 11.1 Describe the relationship between conversion processes, inventory, and supply chain management.
Section Reference: Conversion Processes
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
29) Which control activity listed below is a manufacturing operations control activity?
A) Regularly analyze warranty and repair costs.
B) Manufacture products according to authorized BOM, BOO, and MPS documents.
C) Automate manufacturing operations.
D) Adhere to industry regulations and safety standards.
Diff: 2
Learning Objective: 11.1 Describe the relationship between conversion processes, inventory, and supply chain management.
Section Reference: Conversion Processes
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
30) Which control activity listed below is a quality management control activity?
A) Regularly analyze warranty and repair costs.
B) Manufacture products according to authorized BOM, BOO, and MPS documents.
C) Automate manufacturing operations.
D) Adhere to industry regulations and safety standards.
Diff: 2
Learning Objective: 11.1 Describe the relationship between conversion processes, inventory, and supply chain management.
Section Reference: Conversion Processes
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
31) Which is the best definition of inventory management?
A) Inventory management involves overseeing the processes of ordering, storing, and using a business's inventory.
B) Inventory management involves overseeing the life cycle of a product from procuring raw materials through customer sales.
C) Inventory management involves testing products to ensure that they meet regulatory and corporate specifications.
D) Inventory management involves the research and testing of new products or potential changes to existing products.
Diff: 2
Learning Objective: 11.1 Describe the relationship between conversion processes, inventory, and supply chain management.
Section Reference: Managing Inventory and Product Life Cycle
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
32) Which is the best definition of supply chain management?
A) Inventory management involves overseeing the processes of ordering, storing, and using a business's inventory.
B) Inventory management involves overseeing the life cycle of a product from procuring raw materials through customer sales.
C) Inventory management involves testing products to ensure that they meet regulatory and corporate specifications.
D) Inventory management involves the research and testing of new products or potential changes to existing products.
Diff: 2
Learning Objective: 11.1 Describe the relationship between conversion processes, inventory, and supply chain management.
Section Reference: Managing Inventory and Product Life Cycle
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
33) GAAP for financial reporting requires that a manufacturer's inventory on the balance sheet and cost of goods sold on the income statement consist of: ________, the cost of direct labor, and the cost of manufacturing overhead.
A) the cost of direct materials
B) the cost of shipping
C) the cost of sales, general and administration (SG&A)
D) the expense of IT
Diff: 1
Learning Objective: 11.2 Explain how the cost accounting system records conversion expenditures that impact the financial statements.
Section Reference: Introduction
AACSB: None
Bloom's: Knowledge
AICPA: AC: Systems and Process Management
34) GAAP for financial reporting requires that a manufacturer's inventory on the balance sheet and cost of goods sold on the income statement consist of: the cost of direct materials, ________, and the cost of manufacturing overhead.
A) the cost of shipping
B) the cost of direct labor
C) the cost of sales, general and administration (SG&A)
D) the expense of IT
Diff: 1
Learning Objective: 11.2 Explain how the cost accounting system records conversion expenditures that impact the financial statements.
Section Reference: Introduction
AACSB: None
Bloom's: Knowledge
AICPA: AC: Systems and Process Management
35) GAAP for financial reporting requires that a manufacturer's inventory on the balance sheet and cost of goods sold on the income statement consist of: the cost of direct materials, the cost of direct labor, and
A) the cost of shipping.
B) the cost of sales, general and administration (SG&A).
C) the cost of manufacturing overhead.
D) the expense of IT.
Diff: 1
Learning Objective: 11.2 Explain how the cost accounting system records conversion expenditures that impact the financial statements.
Section Reference: Introduction
AACSB: None
Bloom's: Knowledge
AICPA: AC: Systems and Process Management
36) Traditional cost accounting assigns production costs differently, depending on the product or service. Which choice below best describes job-order costing?
A) Job-order costing assigns costs to products or services that meet specific needs of an individual customer.
B) Job-order costing determines the total cost of the production and averages it over the units produced.
C) Job-order costing identifies specific business activity pools or fundamental business. processes and then assigns costs based on the resources consumed by that activity or process.
D) Job-order costing assigns costs based on the machinery they are manufactured on.
Diff: 2
Learning Objective: 11.2 Explain how the cost accounting system records conversion expenditures that impact the financial statements.
Section Reference: Traditional Cost Accounting
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
37) Traditional cost accounting assigns production costs differently, depending on the product or service. Which choice below best describes process costing?
A) Process costing assigns costs to products or services that meet specific needs of an individual customer.
B) Process costing determines the total cost of the production and averages it over the units produced.
C) Process costing identifies specific business activity pools or fundamental business processes and then assigns costs based on the resources consumed by that activity or process.
D) Process costing assigns costs based on the machinery they are manufactured on.
Diff: 2
Learning Objective: 11.2 Explain how the cost accounting system records conversion expenditures that impact the financial statements.
Section Reference: Traditional Cost Accounting
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
38) Traditional cost accounting assigns production costs differently, depending on the product or service. Which cost accounting method would likely be used for pumps built to specific customer specification?
A) Activity-based costing
B) Machine setup costing
C) Job-order costing
D) Process costing
Diff: 2
Learning Objective: 11.2 Explain how the cost accounting system records conversion expenditures that impact the financial statements.
Section Reference: Traditional Cost Accounting
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
39) Traditional cost accounting assigns production costs differently, depending on the product or service. Which cost accounting method would likely be used for a mass-produced frozen cookie mix?
A) Activity-based costing
B) Machine setup costing
C) Job-order costing
D) Process costing
Diff: 2
Learning Objective: 11.2 Explain how the cost accounting system records conversion expenditures that impact the financial statements.
Section Reference: Traditional Cost Accounting
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
40) For accounting purposes, the salaries, wages, and benefit expenses of employees directly involved in the production process are called what?
A) Direct labor
B) Indirect factory labor
C) Direct material costs
D) Indirect material costs
Diff: 2
Learning Objective: 11.2 Explain how the cost accounting system records conversion expenditures that impact the financial statements.
Section Reference: Traditional Cost Accounting
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
41) For accounting purposes, the salaries, wages, and benefit expenses of an employee who runs a lathe machine on the factory floor would be classified as what?
A) Direct labor
B) Indirect factory labor
C) Direct material costs
D) Indirect material costs
Diff: 2
Learning Objective: 11.2 Explain how the cost accounting system records conversion expenditures that impact the financial statements.
Section Reference: Traditional Cost Accounting
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
42) For accounting purposes, the salaries, wages, and benefit expenses of a quality control inspector would be classified as what?
A) Direct labor
B) Indirect factory labor
C) Direct material costs
D) Indirect material costs
Diff: 2
Learning Objective: 11.2 Explain how the cost accounting system records conversion expenditures that impact the financial statements.
Section Reference: Traditional Cost Accounting
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
43) For accounting purposes, the costs of the steel consumed in the manufacture of a brake drum would be classified as what?
A) Direct labor
B) Indirect factory labor
C) Direct material costs
D) Indirect material costs
Diff: 2
Learning Objective: 11.2 Explain how the cost accounting system records conversion expenditures that impact the financial statements.
Section Reference: Traditional Cost Accounting
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
44) For accounting purposes, the costs of the cleaning supplies to clean the machines used to manufacture the brake drums would be classified as what?
A) Direct labor
B) Indirect factory labor
C) Direct material costs
D) Indirect material costs
Diff: 2
Learning Objective: 11.2 Explain how the cost accounting system records conversion expenditures that impact the financial statements.
Section Reference: Traditional Cost Accounting
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
45) For accounting purposes, the insurance on the manufacturing facility would be classified as what?
A) Manufacturing overhead
B) Indirect factory labor
C) Direct material costs
D) Indirect material costs
Diff: 2
Learning Objective: 11.2 Explain how the cost accounting system records conversion expenditures that impact the financial statements.
Section Reference: Traditional Cost Accounting
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
46) RAM Manufacturing LLC is a rapidly growing manufacturer of parts for the automotive industry. Maeve is a newly hired cost accountant. RAM Manufacturing's has developed a new disc brake that lasts longer than brakes from their competitors. After calculating all the direct, indirect and overhead costs, Maeve assigns a cost of $44.50 per disc brake assembly. RAM Manufacturing has manufactured 100,000 of their new disc brake and sold 60,000 to their largest customer. Before shipping any brakes to customers, what is their finished goods inventory?
A) $4,450,000
B) $2,670,000
C) $1,780,000
D) $3,570,000
Explanation: 100,000 * $44.50 cost per disc brake assembly.
Diff: 2
Learning Objective: 11.2 Explain how the cost accounting system records conversion expenditures that impact the financial statements.
Section Reference: Traditional Cost Accounting
AACSB: Analytic
Bloom's: Synthesis
AICPA: AC: Systems and Process Management
47) RAM Manufacturing LLC is a rapidly growing manufacturer of parts for the automotive industry. Maeve is a newly hired cost accountant. RAM Manufacturing's has developed a new disc brake that lasts longer than brakes from their competitors. After calculating all the direct, indirect and overhead costs, Maeve assigns a cost of $44.50 per disc brake assembly. RAM Manufacturing has manufactured 100,000 of their new disc brake and sold 60,000 to their largest customer. After shipping the 60,000 disc brakes to this largest customer, what is their cost of goods sold?
A) $4,450,000
B) $2,670,000
C) $1,780,000
D) $3,570,000
Explanation: 60,000 * $44.50 cost per disc brake assembly.
Diff: 2
Learning Objective: 11.2 Explain how the cost accounting system records conversion expenditures that impact the financial statements.
Section Reference: Traditional Cost Accounting
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
48) RAM Manufacturing LLC is a rapidly growing manufacturer of parts for the automotive industry. Maeve is a newly hired cost accountant. RAM Manufacturing's has developed a new disc brake that lasts longer than brakes from their competitors. After calculating all the direct, indirect and overhead costs, Maeve assigns a cost of $44.50 per disc brake assembly. RAM Manufacturing has manufactured 100,000 of their new disc brake and sold 60,000 to their largest customer. After shipping the 60,000 disc brakes to the largest customer, what is their remaining finished goods inventory?
A) $4,450,000
B) $2,670,000
C) $1,780,000
D) $3,570,000
Explanation: 40,000 * $44.50 cost per disc brake assembly.
Diff: 2
Learning Objective: 11.2 Explain how the cost accounting system records conversion expenditures that impact the financial statements.
Section Reference: Traditional Cost Accounting
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
49) Cost accounting assigns production costs differently, depending on the product or service. Which choice below best describes activity-based costing?
A) Activity-based costing assigns costs to products or services that meet specific needs of an individual customer.
B) Activity-based costing determines the total cost of the production and averages it over the units produced.
C) Activity-based costing identifies specific business activity pools or fundamental business processes and then assigns costs based on the resources consumed by that activity or process.
D) Activity-based costing assigns costs based on the machinery they are manufactured on.
Diff: 2
Learning Objective: 11.2 Explain how the cost accounting system records conversion expenditures that impact the financial statements.
Section Reference: Activity-Based Cost Accounting
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
50) Traditional cost accounting assigns production costs differently, depending on the product or service. Which cost accounting method is made easier by the implementation of an ERP system?
A) Activity-based costing
B) Machine setup costing
C) Job-order costing
D) Process costing
Diff: 2
Learning Objective: 11.2 Explain how the cost accounting system records conversion expenditures that impact the financial statements.
Section Reference: Activity-Based Cost Accounting
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
51) The cost accounting function determines product costs, costs of goods sold, and inventory values for financial reporting purposes and management reporting. What is a sample control activity that could be used to control for misstatements in costs that may result in a material misstatement of financial reports?
A) Document and authorize product cost accounting procedures that describe costing methods.
B) Use a BOM for every product in all steps of production.
C) Allocate indirect labor and overhead to products on an approved and consistent basis.
D) Ensure that system development is reviewed by appropriate IT and accounting staff.
Diff: 2
Learning Objective: 11.2 Explain how the cost accounting system records conversion expenditures that impact the financial statements.
Section Reference: Product Costing Internal Controls
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
52) The cost accounting function determines product costs, costs of goods sold, and inventory values for financial reporting purposes and management reporting. What is a sample control activity that could be used to control for inadequate product cost recording that may result in error, fraud, or financial losses?
A) Document and authorize product cost accounting procedures that describe costing methods.
B) Use a BOM for every product in all steps of production.
C) Implement change management and supporting IT general controls.
D) Ensure that system development is reviewed by appropriate IT and accounting staff.
Diff: 2
Learning Objective: 11.2 Explain how the cost accounting system records conversion expenditures that impact the financial statements.
Section Reference: Product Costing Internal Controls
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
53) The cost accounting function determines product costs, costs of goods sold, and inventory values for financial reporting purposes and management reporting. What is a sample control activity that could be used to control for a poorly designed cost accounting system which may result in misallocation of costs to products?
A) Document and authorize product cost accounting procedures that describe costing methods.
B) Use a BOM for every product in all steps of production.
C) Control and account for raw materials issued to production.
D) Ensure that system development is reviewed by appropriate IT and accounting staff.
Diff: 2
Learning Objective: 11.2 Explain how the cost accounting system records conversion expenditures that impact the financial statements.
Section Reference: Product Costing Internal Controls
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
54) Choose the best definition of digital manufacturing from the choices below.
A) Digital manufacturing involves automated, digital processes using Industrial Internet of Things (IIoT) technologies.
B) Digital manufacturing involves manual, digital processes using Industrial Internet of Things (IIoT) technologies.
C) Digital manufacturing involves automated, analog processes using Industrial Internet of Things (IIoT) technologies.
D) Digital manufacturing involves automated, digital data using Industrial Internet of Things (IIoT) technologies.
Diff: 2
Learning Objective: 11.3 Identify opportunities and challenges in digital manufacturing.
Section Reference: Introduction
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
55) Choose the best definition of digital twin from the choices below.
A) A digital twin involves using Industrial Internet of Things (IIoT) technologies to virtually manufacture a product.
B) A digital twin is a digital duplicate or software model of the physical object.
C) A digital twin is manufacturing a duplicate product in clay for testing purposes.
D) A digital twin is when an organization tests a product in the field.
Diff: 2
Learning Objective: 11.3 Identify opportunities and challenges in digital manufacturing.
Section Reference: Digital Manufacturing Environment
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
56) A digital factory that is connected, networked, and fully integrated creates opportunities to minimize costs of downtime and underperformance in production and to enable the best output from factory assets and employees. What is an advantage that companies see by using digital manufacturing?
A) A digital factory requires securing every network, cloud platform, operating system, and application across its supply chain and production network.
B) Employees might be resistant to change if they fear losing their jobs.
C) Predicting and preempting machinery and equipment failure by performing functions like self-calibration and self-diagnosis.
D) Leadership support plays an essential role in the success of an initiative.
Diff: 2
Learning Objective: 11.3 Identify opportunities and challenges in digital manufacturing.
Section Reference: Opportunities and Challenges
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
57) A digital factory that is connected, networked, and fully integrated creates opportunities to minimize costs of downtime and underperformance in production and to enable the best output from factory assets and employees. What is an advantage that companies see by using digital manufacturing?
A) A digital factory requires securing every network, cloud platform, operating system, and application across its supply chain and production network.
B) Employees might be resistant to change if they fear losing their jobs.
C) Leadership support plays an essential role in the success of an initiative.
D) Maintaining machinery and equipment using proactive real-time monitoring with a predictive maintenance model.
Diff: 2
Learning Objective: 11.3 Identify opportunities and challenges in digital manufacturing.
Section Reference: Opportunities and Challenges
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
58) A digital factory that is connected, networked, and fully integrated creates opportunities to minimize costs of downtime and underperformance in production and to enable the best output from factory assets and employees. What is an advantage that companies see by using digital manufacturing?
A) Connecting equipment and asset sensors to the cloud to improve equipment reliability and reduce unplanned outages.
B) A digital factory requires securing every network, cloud platform, operating system, and application across its supply chain and production network.
C) Employees might be resistant to change if they fear losing their jobs.
D) Leadership support plays an essential role in the success of an initiative.
Diff: 2
Learning Objective: 11.3 Identify opportunities and challenges in digital manufacturing.
Section Reference: Opportunities and Challenges
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
59) A digital factory that is connected, networked, and fully integrated creates opportunities to minimize costs of downtime and underperformance in production and to enable the best output from factory assets and employees. What is an advantage that companies see by using digital manufacturing?
A) A digital factory requires securing every network, cloud platform, operating system, and application across its supply chain and production network.
B) Processing employee performance metrics through machine learning data models to identify at-risk employees and use the data to improve productivity and reduce attrition.
C) Employees might be resistant to change if they fear losing their jobs.
D) Leadership support plays an essential role in the success of an initiative.
Diff: 2
Learning Objective: 11.3 Identify opportunities and challenges in digital manufacturing.
Section Reference: Opportunities and Challenges
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
60) A digital factory that is connected, networked, and fully integrated creates opportunities to minimize costs of downtime and underperformance in production and to enable the best output from factory assets and employees. What is an advantage that companies see by using digital manufacturing?
A) A digital factory requires securing every network, cloud platform, operating system, and application across its supply chain and production network.
B) Employees might be resistant to change if they fear losing their jobs.
C) Eliminating manufacturing traffic jams
D) Leadership support plays an essential role in the success of an initiative.
Diff: 2
Learning Objective: 11.3 Identify opportunities and challenges in digital manufacturing.
Section Reference: Opportunities and Challenges
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
61) A digital factory that is connected, networked, and fully integrated creates opportunities to minimize costs of downtime and underperformance in production and to enable the best output from factory assets and employees. What is an advantage that companies see by using digital manufacturing?
A) A digital factory requires securing every network, cloud platform, operating system, and application across its supply chain and production network.
B) Employees might be resistant to change if they fear losing their jobs.
C) Leadership support plays an essential role in the success of an initiative.
D) Decreasing manufacturing cycle times, which is the time required to produce an order.
Diff: 2
Learning Objective: 11.3 Identify opportunities and challenges in digital manufacturing.
Section Reference: Opportunities and Challenges
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
62) A digital factory that is connected, networked, and fully integrated creates opportunities to minimize costs of downtime and underperformance in production and to enable the best output from factory assets and employees. What is an advantage that companies see by using digital manufacturing?
A) Using a digital twin for a product to improve measurement and manufacturing accuracy.
B) A digital factory requires securing every network, cloud platform, operating system, and application across its supply chain and production network.
C) Employees might be resistant to change if they fear losing their jobs.
D) Leadership support plays an essential role in the success of an initiative.
Diff: 2
Learning Objective: 11.3 Identify opportunities and challenges in digital manufacturing.
Section Reference: Opportunities and Challenges
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
63) A digital factory that is connected, networked, and fully integrated creates opportunities to minimize costs of downtime and underperformance in production and to enable the best output from factory assets and employees. What is an advantage that companies see by using digital manufacturing?
A) A digital factory requires securing every network, cloud platform, operating system, and application across its supply chain and production network.
B) Improving production quality and output
C) Employees might be resistant to change if they fear losing their jobs.
D) Leadership support plays an essential role in the success of an initiative.
Diff: 2
Learning Objective: 11.3 Identify opportunities and challenges in digital manufacturing.
Section Reference: Opportunities and Challenges
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
64) A digital factory that is connected, networked, and fully integrated creates opportunities to minimize costs of downtime and underperformance in production and to enable the best output from factory assets and employees. What is an advantage that companies see by using digital manufacturing?
A) A digital factory requires securing every network, cloud platform, operating system, and application across its supply chain and production network.
B) Employees might be resistant to change if they fear losing their jobs.
C) Providing more flexibility to meet customer demands
D) Leadership support plays an essential role in the success of an initiative.
Diff: 2
Learning Objective: 11.3 Identify opportunities and challenges in digital manufacturing.
Section Reference: Opportunities and Challenges
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
65) A digital factory that is connected, networked, and fully integrated creates opportunities to minimize costs of downtime and underperformance in production and to enable the best output from factory assets and employees. What is a challenge that companies face when using digital manufacturing?
A) A manufacturer needs to secure every network, cloud platform, operating system, and application across its supply chain and production network.
B) Eliminating manufacturing traffic jams
C) Maintaining machinery and equipment using proactive real-time monitoring with a predictive maintenance model
D) Decreasing manufacturing cycle times, which is the time required to produce an order
Diff: 2
Learning Objective: 11.3 Identify opportunities and challenges in digital manufacturing.
Section Reference: Opportunities and Challenges
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
66) A digital factory that is connected, networked, and fully integrated creates opportunities to minimize costs of downtime and underperformance in production and to enable the best output from factory assets and employees. What is a challenge that companies face when using digital manufacturing?
A) Eliminating manufacturing traffic jams
B) IIoT generates huge amounts of data.
C) Maintaining machinery and equipment using proactive real-time monitoring with a predictive maintenance model
D) Decreasing manufacturing cycle times, which is the time required to produce an order
Diff: 2
Learning Objective: 11.3 Identify opportunities and challenges in digital manufacturing.
Section Reference: Opportunities and Challenges
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
67) A digital factory that is connected, networked, and fully integrated creates opportunities to minimize costs of downtime and underperformance in production and to enable the best output from factory assets and employees. What is a challenge that companies face when using digital manufacturing?
A) Eliminating manufacturing traffic jams
B) Maintaining machinery and equipment using proactive real-time monitoring with a predictive maintenance model
C) Corporate risk appetites may not align with IIoT risks.
D) Decreasing manufacturing cycle times, which is the time required to produce an order
Diff: 2
Learning Objective: 11.3 Identify opportunities and challenges in digital manufacturing.
Section Reference: Opportunities and Challenges
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
68) A digital factory that is connected, networked, and fully integrated creates opportunities to minimize costs of downtime and underperformance in production and to enable the best output from factory assets and employees. What is a challenge that companies face when using digital manufacturing?
A) Eliminating manufacturing traffic jams
B) Maintaining machinery and equipment using proactive real-time monitoring with a predictive maintenance model
C) Decreasing manufacturing cycle times, which is the time required to produce an order
D) Immature and fragmented business processes present a barrier to delivering intelligent automation.
Diff: 2
Learning Objective: 11.3 Identify opportunities and challenges in digital manufacturing.
Section Reference: Opportunities and Challenges
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
69) A digital factory that is connected, networked, and fully integrated creates opportunities to minimize costs of downtime and underperformance in production and to enable the best output from factory assets and employees. What is a challenge that companies face when using digital manufacturing?
A) Employees might resist change if they fear losing their jobs. They might enjoy a comfort level and familiarity with existing processes and systems.
B) Eliminating manufacturing traffic jams
C) Maintaining machinery and equipment using proactive real-time monitoring with a predictive maintenance model
D) Decreasing manufacturing cycle times, which is the time required to produce an order
Diff: 2
Learning Objective: 11.3 Identify opportunities and challenges in digital manufacturing.
Section Reference: Opportunities and Challenges
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
70) A digital factory that is connected, networked, and fully integrated creates opportunities to minimize costs of downtime and underperformance in production and to enable the best output from factory assets and employees. What is a challenge that companies face when using digital manufacturing?
A) Eliminating manufacturing traffic jams
B) Leadership support plays an essential role in the success of an initiative.
C) Maintaining machinery and equipment using proactive real-time monitoring with a predictive maintenance model
D) Decreasing manufacturing cycle times, which is the time required to produce an order
Diff: 2
Learning Objective: 11.3 Identify opportunities and challenges in digital manufacturing.
Section Reference: Opportunities and Challenges
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
71) A digital factory that is connected, networked, and fully integrated creates opportunities to minimize costs of downtime and underperformance in production and to enable the best output from factory assets and employees. What is a challenge that companies face when using digital manufacturing?
A) Eliminating manufacturing traffic jams
B) Maintaining machinery and equipment using proactive real-time monitoring with a predictive maintenance model
C) Implementing advanced technologies like these can be challenging for many IT departments
D) Decreasing manufacturing cycle times, which is the time required to produce an order
Diff: 2
Learning Objective: 11.3 Identify opportunities and challenges in digital manufacturing.
Section Reference: Opportunities and Challenges
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
72) The manufacturing conversion and supply chain management processes involve 11 ERP features from the Financial, Production, and Supply Chain Management modules. Which of the following modules is part of the manufacturing conversion and supply chain management processes?
A) Production
B) Human resources management
C) Customer relationship management
D) Sales management
Diff: 1
Learning Objective: 11.4 Explain how data generated by the AIS is converted to reporting and analytics.
Section Reference: Introduction
AACSB: None
Bloom's: Knowledge
AICPA: AC: Systems and Process Management
73) The manufacturing conversion and supply chain management processes involve 11 ERP features from the Financial, Production, and Supply Chain Management modules. Which of the following modules is part of the manufacturing conversion and supply chain management processes?
A) Human resources management
B) Financial
C) Customer relationship management
D) Sales management
Diff: 1
Learning Objective: 11.4 Explain how data generated by the AIS is converted to reporting and analytics.
Section Reference: Introduction
AACSB: None
Bloom's: Knowledge
AICPA: AC: Systems and Process Management
74) The manufacturing conversion and supply chain management processes involve 11 ERP features from the Financial, Production, and Supply Chain Management modules. Which of the following modules is part of the manufacturing conversion and supply chain management processes?
A) Human resources management
B) Customer relationship management
C) Supply chain management
D) Sales management
Diff: 1
Learning Objective: 11.4 Explain how data generated by the AIS is converted to reporting and analytics.
Section Reference: Introduction
AACSB: None
Bloom's: Knowledge
AICPA: AC: Systems and Process Management
75) What is one of the key tables that store data needed in the manufacturing conversion process?
A) Bill of material
B) Sales
C) Employee
D) Customer
Diff: 1
Learning Objective: 11.4 Explain how data generated by the AIS is converted to reporting and analytics.
Section Reference: Database Design
AACSB: None
Bloom's: Knowledge
AICPA: AC: Systems and Process Management
76) What is one of the key tables that store data needed in the manufacturing conversion process?
A) Sales
B) Vendor
C) Employee
D) Customer
Diff: 1
Learning Objective: 11.4 Explain how data generated by the AIS is converted to reporting and analytics.
Section Reference: Database Design
AACSB: None
Bloom's: Knowledge
AICPA: AC: Systems and Process Management
77) Production reports range from source documents to key metrics. Which is the best description of a production plan?
A) A long-term plan depicting what will be produced and when based on customer product demand and allocation of resources
B) A list of raw materials, steps, and parts needed to manufacture a product
C) A list of sequential steps followed to manufacture a product
D) A build plan that compiles planned orders into a short-term schedule
Diff: 2
Learning Objective: 11.4 Explain how data generated by the AIS is converted to reporting and analytics.
Section Reference: Reporting and Insights
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
78) Production reports range from source documents to key metrics. Which is the best description of a bill of materials (BOM)?
A) A long-term plan depicting what will be produced and when based on customer product demand and allocation of resources
B) A list of raw materials, steps, and parts needed to manufacture a product
C) A list of sequential steps followed to manufacture a product
D) A build plan that compiles planned orders into a short-term schedule
Diff: 2
Learning Objective: 11.4 Explain how data generated by the AIS is converted to reporting and analytics.
Section Reference: Reporting and Insights
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
79) Production reports range from source documents to key metrics. Which is best description of a bill of operations (BOO)?
A) A long-term plan depicting what will be produced and when based on the customer product demand and allocation of resources
B) A list of raw materials, steps, and parts needed to manufacture a product
C) A list of sequential steps followed to manufacture a product
D) A build plan that compiles planned orders into a short-term schedule
Diff: 2
Learning Objective: 11.4 Explain how data generated by the AIS is converted to reporting and analytics.
Section Reference: Reporting and Insights
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
80) Production reports range from source documents to key metrics. Which is the best description of a master production schedule (MPS)?
A) A long-term plan depicting what will be produced and when based on customer product demand and allocation of resources
B) A list of raw materials, steps, and parts needed to manufacture a product
C) A list of sequential steps followed to manufacture a product
D) A build plan that compiles planned orders into a short-term schedule
Diff: 2
Learning Objective: 11.4 Explain how data generated by the AIS is converted to reporting and analytics.
Section Reference: Reporting and Insights
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
81) Production reports range from source documents to key metrics. Which is the best description of production orders filled and open?
A) The total number of orders that have been filled or remain outstanding within a period of time
B) Summary of costs by product within a period of time
C) Comparison of the actual production costs to standard production costs
D) Revenue from the sales processes showing top-selling products for production management decision making
Diff: 2
Learning Objective: 11.4 Explain how data generated by the AIS is converted to reporting and analytics.
Section Reference: Reporting and Insights
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
82) Production reports range from source documents to key metrics. Which is the best description of total manufacturing costs of products by period?
A) The total number of orders that have been filled or remain outstanding within a period of time
B) Summary of costs by product within a period of time
C) Comparison of the actual production costs to standard production costs
D) Revenue from the sales processes showing top-selling products for production management decision making
Diff: 2
Learning Objective: 11.4 Explain how data generated by the AIS is converted to reporting and analytics.
Section Reference: Reporting and Insights
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
83) Production reports range from source documents to key metrics. Which is the best description of actual versus standard or budgeted production costs?
A) The total number of orders that have been filled or remain outstanding within a period of time
B) Summary of costs by product within a period of time
C) Comparison of the actual production costs to standard production costs
D) Revenue from the sales processes showing top-selling products for production management decision making
Diff: 2
Learning Objective: 11.4 Explain how data generated by the AIS is converted to reporting and analytics.
Section Reference: Reporting and Insights
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
84) Production reports range from source documents to key metrics. Which is the best description of top-selling products?
A) The total number of orders that have been filled or remain outstanding within a period of time
B) Summary of costs by product within a period of time
C) Comparison of the actual production costs to standard production costs
D) Revenue from the sales processes showing top-selling products for production management decision making
Diff: 2
Learning Objective: 11.4 Explain how data generated by the AIS is converted to reporting and analytics.
Section Reference: Reporting and Insights
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
85) Production reports range from source documents to key metrics. Which is the best description of production volume by machinery?
A) The total number of orders that have been filled or remain outstanding within a period of time
B) Summary of volume produced by machine type
C) Summary of machine downtime, including reasons for the downtime
D) Summary of customer-returned items, including reasons for the returns
Diff: 2
Learning Objective: 11.4 Explain how data generated by the AIS is converted to reporting and analytics.
Section Reference: Reporting and Insights
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
86) Production reports range from source documents to key metrics. Which is the best description of downtime causes?
A) The total number of orders that have been filled or remain outstanding within a period of time
B) Summary of volume produced by machine type
C) Summary of machine downtime, including reasons for the downtime
D) Summary of customer-returned items, including reasons for the returns
Diff: 2
Learning Objective: 11.4 Explain how data generated by the AIS is converted to reporting and analytics.
Section Reference: Reporting and Insights
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
87) Production reports range from source documents to key metrics. Which is the best description of return items by reason?
A) The total number of orders that have been filled or remain outstanding within a period of time
B) Summary of volume produced by machine type
C) Summary of machine downtime, including reasons for the downtime
D) Summary of customer-returned items, including reasons for the returns
Diff: 2
Learning Objective: 11.4 Explain how data generated by the AIS is converted to reporting and analytics.
Section Reference: Reporting and Insights
AACSB: None
Bloom's: Application
AICPA: AC: Systems and Process Management
88) RAM Manufacturing LLC is a rapidly growing manufacturer of parts for the automotive industry. Maeve, a recent college graduate, has been hired as a cost accountant. She will be working with a product development team on designing new car parts. She has had a few weeks of training in the department. She has been asked to describe a bill of materials (BOM). Please write a description.
Diff: 3
Learning Objective: 11.1 Describe the relationship between conversion processes, inventory, and supply chain management.
Section Reference: Conversion Processes
AACSB: Analytic
Bloom's: Synthesis
AICPA: AC: Systems and Process Management
89) RAM Manufacturing LLC is a rapidly growing manufacturer of parts for the automotive industry. Maeve, a recent college graduate, has been hired as a cost accountant. She will be working with a product development team on designing new car parts. She has had a few weeks of training in the department. She has been asked to describe an operations list or bill of operations (BOO). Please write a description.
Diff: 3
Learning Objective: 11.1 Describe the relationship between conversion processes, inventory, and supply chain management.
Section Reference: Conversion Processes
AACSB: Analytic
Bloom's: Synthesis
AICPA: AC: Systems and Process Management
90) RAM Manufacturing LLC is a rapidly growing manufacturer of parts for the automotive industry. Maeve, a recent college graduate, has been hired as a cost accountant. She will be working with a product development team on designing new car parts. She has recently seen a list of the parts for a new brake that RAM Manufacturing is planning to build:
• Wheel bearing
• Wheel studs
• Wheel cylinder
• Disc rotor
• Disc pads
• Braking plate
• Brake shoes
What is this list of brake components called in the conversion process?
Diff: 2
Learning Objective: 11.1 Describe the relationship between conversion processes, inventory, and supply chain management.
Section Reference: Conversion Processes
AACSB: Analytic
Bloom's: Analysis
AICPA: AC: Systems and Process Management
91) RAM Manufacturing LLC is a rapidly growing manufacturer of parts for the automotive industry. RAM Manufacturing is launching a new disc brake product. Maeve, a newly hired cost accountant, has been asked to assign a number of costs incurred in manufacturing the disc brakes to the appropriate cost category. To what product cost category would a manufacturing employees hourly wages be assigned?
Diff: 2
Learning Objective: 11.2 Explain how the cost accounting system records conversion expenditures that impact the financial statements.
Section Reference: Traditional Cost Accounting
AACSB: Analytic
Bloom's: Application
AICPA: AC: Systems and Process Management
92) RAM Manufacturing LLC is a rapidly growing manufacturer of parts for the automotive industry. RAM Manufacturing is launching a new disc brake product. Maeve, a newly hired cost accountant, has been asked to assign a number of costs incurred in manufacturing the disc brakes to the appropriate cost category. To what product cost category would the grease used to keep the shop-floor machines working properly be assigned?
Diff: 2
Learning Objective: 11.2 Explain how the cost accounting system records conversion expenditures that impact the financial statements.
Section Reference: Traditional Cost Accounting
AACSB: Analytic
Bloom's: Application
AICPA: AC: Systems and Process Management
93) RAM Manufacturing LLC is a rapidly growing manufacturer of parts for the automotive industry. RAM Manufacturing is launching a new disc brake product. Maeve, a newly hired cost accountant, has been asked to assign a number of costs incurred in manufacturing the disc brakes to the appropriate cost category. To what product cost category would the salary of the CFO be assigned to?
Diff: 2
Learning Objective: 11.2 Explain how the cost accounting system records conversion expenditures that impact the financial statements.
Section Reference: Traditional Cost Accounting
AACSB: Analytic
Bloom's: Application
AICPA: AC: Systems and Process Management
94) RAM Manufacturing LLC is a rapidly growing manufacturer of parts for the automotive industry. RAM Manufacturing is launching a new disc brake product. Maeve, a newly hired cost accountant, has been asked to assign a number of costs incurred in manufacturing the disc brakes to the appropriate cost category. To what product cost category would the steel used in the disc rotor in the new disc brakes be assigned to?
Diff: 2
Learning Objective: 11.2 Explain how the cost accounting system records conversion expenditures that impact the financial statements.
Section Reference: Traditional Cost Accounting
AACSB: Analytic
Bloom's: Application
AICPA: AC: Systems and Process Management
95) RAM Manufacturing LLC is a rapidly growing manufacturer of parts for the automotive industry. Justin, the Chief Financial Officer of RAM Manufacturing, recently read an article titled "Digital Manufacturing and the CFO" in the CMA's Strategic Finance magazine. Justin arranges a meeting with Maeve, head of manufacturing operations to discuss the article. After meeting and discussing digital manufacturing at RAM Manufacturing, they discuss some of the advantages RAM Manufacturing could realize from implementing this initiative. Briefly discuss some of the advantages RAM Manufacturing can expect from this initiative.
• Predicting and preempting machinery and equipment failure by performing functions like self-calibration and self-diagnosis
• Maintaining machinery and equipment using proactive real-time monitoring with a predictive maintenance model
• Connecting equipment and asset sensors to the cloud to improve equipment reliability and reduce unplanned outages
• Processing employee performance metrics through machine learning data models to identify at-risk factory employees and use the data to improve productivity and reduce attrition
• Using a digital twin for a product to improve measurement and manufacturing accuracy
• Eliminating manufacturing traffic jams
• Decreasing manufacturing cycle times, which is the time required to produce an order
• Improving production quality and output
• Providing more flexibility to meet customer demands
Diff: 3
Learning Objective: 11.3 Identify opportunities and challenges in digital manufacturing.
Section Reference: Opportunities and Challenges
AACSB: Analytic
Bloom's: Application
AICPA: AC: Systems and Process Management
96) RAM Manufacturing LLC is a rapidly growing manufacturer of parts for the automotive industry. Justin, the Chief Financial Officer of RAM Manufacturing, recently read an article titled "Digital Manufacturing and the CFO" in the CMA's Strategic Finance magazine. Justin arranges a meeting with Maeve, head of manufacturing operations to discuss the article. After meeting and discussing digital manufacturing at RAM Manufacturing, they discuss some of the challenges they may face in implementing this initiative. Briefly discuss some of the challenges RAM Manufacturing can expect to this initiative.
• Cyber and privacy risks
• Data storage
• Risk exposure
• Process fragmentation
• Resistance to change
• Limited existing technology support and capabilities
• A clear vision and strategy with top management support
Diff: 3
Learning Objective: 11.3 Identify opportunities and challenges in digital manufacturing.
Section Reference: Opportunities and Challenges
AACSB: Analytic
Bloom's: Application
AICPA: AC: Systems and Process Management
97) RAM Manufacturing LLC is a rapidly growing manufacturer of parts for the automotive industry. Justin, the Chief Information Officer (CIO) of RAM Manufacturing, was recently tasked with leading the implementation of an Enterprise Resource Planning (ERP) system for RAM Manufacturing. One of the key areas of focus for the ERP project is the conversion process. Justin has assigned Maeve, a recently hired systems analyst, to lead the conversion process. What 11 ERP features should be considered by Maeve in the conversion process?
1. Budgeting
2. Cost Management
3. Cost Accounting
4. Product Costing
5. Raw Material Management
6. Bill of Materials
7. Production Scheduling
8. Warehouse Management
9. Inventory
10. Stock Control
11. Forecasting
Diff: 3
Learning Objective: 11.4 Explain how data generated by the AIS is converted to reporting and analytics.
Section Reference: Introduction
AACSB: Analytic
Bloom's: Application
AICPA: AC: Systems and Process Management
98) RAM Manufacturing LLC is a rapidly growing manufacturer of parts for the automotive industry. Justin, the Chief Information Officer (CIO) of RAM Manufacturing, was recently tasked with leading the implementation of an Enterprise Resource Planning (ERP) system for RAM Manufacturing. One of the key areas of focus for the ERP project is the conversion process. Justin has assigned Maeve, a recently hired systems analyst, to lead the conversion process. What are some of the tables that should be considered by Maeve in the conversion process?
1. Process
2. Process Requirements
3. Product
4. Bill of Materials
5. Raw Material Requirements
6. Inventory
7. Vendor
8. Supplier
Diff: 3
Learning Objective: 11.4 Explain how data generated by the AIS is converted to reporting and analytics.
Section Reference: Database Design
AACSB: Analytic
Bloom's: Application
AICPA: AC: Systems and Process Management
99) RAM Manufacturing LLC is a rapidly growing manufacturer of parts for the automotive industry. At RAM Manufacturing every production order must be approved by an authorized employee. As part of an internal audit, Joan, a newly hired internal auditor, is checking the list of authorized approvers for production orders approved in January.
Which Production order(s) should be investigated further based on the data in the tables below?
Diff: 3
Learning Objective: 11.4 Explain how data generated by the AIS is converted to reporting and analytics.
Section Reference: Database Design
AACSB: Analytic
Bloom's: Application
AICPA: AC: Systems and Process Management
100) RAM Manufacturing LLC is a rapidly growing manufacturer of parts for the automotive industry. At RAM Manufacturing every production order must be approved by an authorized employee. As part of an internal audit, Joan, a newly hired internal auditor, is checking the list of authorized approvers for production orders approved in January.
Joan finds that production orders 4328 and 4331 were not approved by an authorized approver. Joan wants to find of the name of the employee who approved those production orders. Which module in the ERP system does Joan need to access to extract this information?
Diff: 3
Learning Objective: 11.4 Explain how data generated by the AIS is converted to reporting and analytics.
Section Reference: Database Design
AACSB: Analytic
Bloom's: Application
AICPA: AC: Systems and Process Management
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