exam 3 practice exam Flashcards
Which is the following is value-added time?
a. Wait
b. Queue
c. Moving
d. Processing
Processing
Which of the following shows the net operating income that an investment center earns above the minimum required retunr on its operating assets?
a. RI
b. ROI
c. CM
d. Revenue Variance
a. RI
How much should a company be willing to pay for an additional minute of machine time (assuming it takes one minute to make the product)?
a. Sales price of product
b. CM of product
c. Amount that gives a positive ending NOI
d. None of the above
b. CM of product
This is the elapsed time from when a customer order is received until the finished goods are shipped.
a. Manufacturing Cycle Time
b. Processing Time
c. Throughput Time
d. Delivery Cycle Time
d. Delivery Cycle Time
Which of the following is not a way to manage constraints?
a. Work overtime on bottlenecks
b. Invest in additional capacity at bottleneck
c. Staff less workers to bottlenecks
d. Improve the business process
c. Staff less workers to bottlenecks
In an add or drop decision, a business segment should always be dropped if?
a. It has a negative NOI
b. It has less CM than common allocated fixed expenses
c. It has less CM that traceable fixed expenses
d. Need more information
c. It has less CM that traceable fixed expenses
Which of the following is not a benefit of decentralization?
a. Lower-level managers can respond quickly
b. Lower-level decisions often based on better information
c. Able to easily spread innovative ideas throughout the organization
d. Top management freed to concentrate on strategy
c. Able to easily spread innovative ideas throughout the organization
When taking a special order, what is the minimum price that you can accept (assuming it does not impact normal operations)?
a. Normal price of item
b. Any offered price
c. Cost of materials
d. Contribution margin of unit
d. Contribution margin of unit
