Chapter 7 (MCQs)

Which item does not describe a world-class company?

• the goal of a world-class company is to delight its customers

• customers in a world-class company are external departments only

• world-class companies work in cross-functional teams

• a world-class company has a flat organizational structure

Which subsystem is not a part of the production system?

• directing the movement of work through the process

• determining raw material requirements

• authorizing work to be performed

• monitoring the flow of cost information related to production

The purpose of the cost accounting system is to

• produce information for inventory valuation

• authorize release of raw materials

• direct the movement of work-in-process

• determine material requirements

Which process creates a homogeneous product through a continuous series of standard procedures?

• batch process

• make-to-order process

• continuous process

• none of the above

An example of a continuous process is the production of

• wedding invitations

• milk products

• jet aircraft

• all of the above

All of the following are characteristics of batch processing except

• each item in the batch is similar

• batches are produced in accordance with detailed customer specifications

• batches are produced to replenish depleted inventory levels

• setting up and retooling is required for different batches

When determining which items to produce, a firm must know

• last year’s production level

• raw material inventory levels

• the standard cost of the item

• the sales forecast

The production schedule is

• the expected demand for the firm’s finished goods for a given year

• the formal plan and authority to begin production

• a description of the type and quantity of raw materials and subassemblies used to produce a single unit of finished product

• the sequence of operations during manufacturing

A move ticket

• is the formal plan and authority to begin production

• specifies the materials and production required for each batch

• records the work done in each work center

• authorizes the storekeeper to release materials to work centers

The internal control significance of the excess materials requisition is that it

• indicates the amount of material released to work centers

• identifies materials used in production that exceed the standard amount allowed

• indicates the standard quantities required for production

• documents the return to raw materials inventory of unused production materials