Chapter 11

Question 1

logistics

Answer 1

the logical systematic flow of resources throughout the organization

Question 2

planning

Answer 2

determines what products should be produces, how many, what resources should be available, and what timing is needed

Question 3

research and development

Answer 3

focuses on product improvements

Question 4

capital budgeting

Answer 4

plans the capital resources needed to support production

Question 5

engineering

Answer 5

responsible for planning the specification for products that will be manufactured

Question 6

bill of materials

Answer 6

the form that specifies the components of a product, including descriptions and quantities of materials and parts needed

Question 7

operation list

Answer 7

describes the chain of events that constitute a product’s production

Question 8

scheduling

Answer 8

plans the timing for production activities, taking into consideration all the open sales orders, inventory needs, and the resources available

Question 9

production orders

Answer 9

authorize production activities for a particular sales order or forecasted need

Question 10

production schedule

Answer 10

outlines the specific timing required for a sales order, including the dates and times designated for the production run

Question 11

maintenance and control

Answer 11

concerned with maintaining the capital resources used to support production, including production facilities and other fixed assets such as machinery, equipment, computers, and vehicles

Question 12

human resources

Answer 12

responsible for managing the placement and development of sufficient qualified personnel

Question 13

inventory control

Answer 13

responsible for managing and recording the movement of inventory in the many different directions that it may go throughout the conversion process

Question 14

economic order quantities

Answer 14

the most efficient quantity of products to purchase

Question 15

stores

Answer 15

control of raw materials inventory held in storage or in holding areas, waiting for processing

Question 16

raw materials

Answer 16

include the basic components of the company’s products, including anything from wood, metal, and nails to finished parts purchased as subassemblies

Question 17

routing

Answer 17

the issuance and movement of materials into the various production phases

Question 18

routing slip

Answer 18

documents the descriptions and quantities of materials taken into production for a specified sale or other authorized production activity

Question 19

work in process inventory

Answer 19

inventory that is in process

Question 20

finished goods inventory

Answer 20

when goods are finished

Question 21

inventory status reports

Answer 21

prepared at various stages of the production process in order to document the extent of work completed and the resulting level of inventory

Question 22

warehousing

Answer 22

involves managing the holding area for finished goods awaiting sale

Question 23

operations

Answer 23

term commonly used to refer to the major business activity in which a company engages

Question 24

quality control

Answer 24

follow up to production, inspecting if the products are up to par

Question 25

rework

Answer 25

additional procedures necessary to bring a product up to its required specifications

Question 26

standard costs

Answer 26

expected costs based on projections of a product’s required resources

Question 27

perpetual inventory systems

Answer 27

involve recording purchases as raw materials inventory, recording all the components of work in process for inventories at various stages of production, recording the total cost of sales for products completed and sold

Question 28

periodic inventory systems

Answer 28

involve updating the inventory and cost of sales accounts only at the end of the period

Question 29

variances

Answer 29

represent the differences between actual costs and the standard costs applied

Question 30

control acitivites

Answer 30

authorization 
segregation of duties
adequate records and controls
safeguarding of assets
independent checks and reconciliation

Question 31

physical inventory count

Answer 31

determines the quantity of inventory on hand by actually counting all items on the premises and in other areas of the company’s responsibilities

Question 32

physical inventory reconciliation

Answer 32

comparing the perpetual system inventory to the physical count

Question 33

computer aided design

Answer 33

techniques may be used to enhance the engineering function

Question 34

computer aided manufacturing

Answer 34

involves the complete automation of the production process, including the full replacement of human resources with computers

Question 35

industrial robots

Answer 35

computers programmed to perform repetitive procedures

Question 36

materials resource planning

Answer 36

involves the automated scheduling of production orders and movement of materials in the production process

Question 37

manufacturing resource planning

Answer 37

considers all manufacturing resources rather than just materials

Question 38

enterprise wide resource planning

Answer 38

integrating all processes into one program

Question 39

computer integrated manufacturing systems

Answer 39

integrate all of the conversion processes to allow for minimal disruptions due to reporting requirements or inventory movement issues

Question 40

just in time production systems

Answer 40

concerned with minimizing or eliminating inventory levels and the related costs of maintaining those inventories

Question 41

earnings management

Answer 41

the act of misstating financial info in order to improve financial statement results

Question 42

absorption costing

Answer 42

involves inclusion of both variable and fixed costs in the determination of unit costs for ending inventories and cost of goods sold