B2 Deck 1

Question 1

inventory management technique that projects and plans inventory levels in order to control the usage of raw materials in the production process

Answer 1

Materials requirement planning

Question 2

inventory audit procedure not an inventory control technique

Answer 2

cycle counting

Question 3

inventory model that attempts to minimize both ordering and carrying costs

Answer 3

economic order quantity

Question 4

reorder point formula

Answer 4

= safety rock + (lead time X sales during lead time)

Question 5

economic order quantity equation

Answer 5

E square root 2SO/C

E = order Size 
S = Annual Sales 
0 = Cost per pruchase order 
C = annual carrying costs per unit

Question 6

What are the ways of converting AR to cash

Answer 6

1/ Collecting Agencies

2. Factoring AR
3. Cash Discounts
4. Electronic fund transfers

Question 7

Avg daily sales x avg collection period best depicts what about receivables

Answer 7

avg gross receivable balance

Question 8

product costs

Answer 8

not expended until product sold
- inventory and COGs manufactured and sold
DM, DL, MOH

Question 9

Period costs

Answer 9

expended on the period in which they are incurred not inventory (SG&A, interest)

Question 10

direct materials

Answer 10

costs of manufacturing purchased to be used in production

Question 11

Prime cost

Answer 11

= Direct labor + direct Material)

Question 12

Conversion cost

Answer 12

= direct labor + MOH

Question 13

overhead rate

Answer 13

All budgeted overhead costs / estimated cost drive

Question 14

applied overhead

Answer 14

= actual cost driver X overhead rate

Question 15

value add costs

Answer 15

increases the worth of the product or service to customers

Question 16

cost driver

Answer 16

a casual factor (the cause) that increases the cost (the effect) of a cost objective

Question 17

for cost accumulation system… if the cost objective is custom order then___ is used if it is mass produced homogeneous product then __ is used

Answer 17

Job costing, process costing

Question 18

formula for cost of goods manufactured

Answer 18

Work in Process Beg 
\+ direct materials used 
\+ Direct Labor
\+ MOH Applied 
= Total Manufacturing costs available 
- Ending work in process inv 
= COGM

Question 19

formula for cost of jobs completed

Answer 19

= DM used + DL + Overhead applied + Beg WIP - ending WIP