B1 Operations Management

Question 1

Control Chart

Answer 1

Goal post conformance

Keeps deviations within an acceptable range

Question 2

Pareto Diagram

Answer 2

Demonstrates frequency of defects from highest to lowest frequency

Question 3

Cause & Effect (Fishbone)

Answer 3

Used to identify sources of problems in produce process by resource & take corrective action
Working backwards

Question 4

Product Cost

Answer 4

Direct materials
Direct labor
Manufacturing overhead applied

Question 5

Period Cost

Answer 5

I/S only - expensed in period incurred

SG&A
Interest expense

Question 6

Cost object (objectives)

Answer 6

Product costing (inventory & COG manufactured & sold)
Income determination (profitability)
Efficiency measurements (actual vs expected)

Question 7

Cost of Goods Manufactured formula

Answer 7

WIP inventory BEG
\+ DM used* 
\+ DL
\+ MOH applied 
-WIP inventory END 
= COG manufactured (completed this period)

*DM used= 
Beg Raw Material 
\+Purchases (+Freight in)(Net Discount)
=Available
-Raw Material End

Question 8

Cost of Goods Sold

Answer 8

Finished goods inventory BEG
+COG manufactures
-Finished goods inventory END
=COGS

Question 9

Normal spoilage

Answer 9

Inventory cost - B/S
Capitalized as part of inventory cost
If accounted for separately, it is allocated to good units produced

Question 10

Abnormal spoilage (Shrinkage)

Answer 10

Per unit cost is based on actual unites
Equivalent units of production include spoiled units
Expenses separately on I/S as period expense