Chapter 14 – ‘The Production Cycle’

Question 1

1. Most costs are locked in at which stage in the production cycle? 
   a. product design
   b. production planning  
   c. production operations  
   d. cost accounting

Answer 1

a.
product design (Correct. Decisions made during product design determine
the majority of costs.)

Question 2

2. Which of the following is an advantage of bar-coding over RFID?
   a. speed  
   b. accuracy
   c. Cost
   d. safety

Answer 2

c. Cost (Correct. Bar-coding is currently less expensive than RFID)

Question 3

3. Which document lists the components needed to manufacture a specific
product?
A. operations list   
b. master production schedule 
c. bill of materials 
d. production order

Answer 3

c. bill of materials (Correct. The bill of materials lists the components of a
finished product.)

Question 4

4. Which document captures information about labor used in production? 
   a. move ticket
   b. job-time ticket
   c. operations list  
   d. bill of materials

Answer 4

b. job-time ticket (Correct. The job-time ticket records time spent on each
activity. ) 

Question 5

5. An increase in which component of quality costs is most likely to result
   in a decrease in the other three components?
   a. prevention costs
   b. inspection costs
   c. internal failure costs
   d. external failure costs

Answer 5

a. prevention costs (Correct. Increases in prevention costs often reduce the
time and cost of inspecting products, as well as the proportion of defective
products.)

Question 6

6. Activity-based costing can be used to refine which of the following?
   a. job-order costing
   b. process costing
   c. both job-order and process costing
   d. neither job-order nor process costing

Answer 6

c. both job-order and process costing (Correct. Activity-based costing can be
used with either job-order or process costing.)

Question 7

7. Which system is most likely to be used by a company that massproduces
   large batches of standard items in anticipation of customer
   demand?
   a. MRP-II
   b. lean manufacturing
   c. activity-based costing
   d. throughput

Answer 7

a. MRP-II (Correct. MRP-II is a push form of manufacturing that is
appropriate for mass production of standardized items for which demand is
predictable.)

Question 8

8. The development of an MPS would be most effective in preventing
which of the following threats?
a. recording and posting errors 
b. loss of inventory
c. production of poor-quality goods 
d. excess production

Answer 8

d. excess production (Correct. An MPS schedules production to satisfy demand
and, therefore, reduces the chance of overproduction.)

Question 9

9. Which control procedure is probably least effective in reducing the
   threat of inventory loss?
   a. limiting physical access to inventory
   b. documenting all transfers of inventory within the company
   c. regular materials usage reports that highlight variances from standards
   d. periodically counting inventory and investigating any discrepancies between
   those counts and recorded amounts

Answer 9

c. regular materials usage reports that highlight variances from standards
(Correct. Although variances could indicate theft, they are more likely to
reflect changes in efficiency.)

Question 10

10. What is the number of good units produced in a given period of time
called?
a. productive capacity 
b. productive processing time 
c. yield 
d. throughput

Answer 10

d. throughput (Correct. Throughput is the measure of the number of good units
produced per unit of time.)