Question 1

Which of the following is NOT a primary component of the logistics function?

Accepted Answer

A)  Planning
B)  Resource management
C)  Operations
D)  ProductionE) A) and B)
F) A) and C)

Question 2

For which of the following computerized conversion systems is Wal-Mart well known?

Accepted Answer

A)  CAD/CAM
B)  MRP-II
C)  CIMs
D)  JITTEST BANK - CHAPTER 11 - MULTIPLE CHOICEE) None of the above
F) All of the above

Question 3

The final hub in the logistics function which involves a follow-up to production, where the products are inspected before they are moved to the warehouse or shipping area is referred to as:

Accepted Answer

A)  Quality control.
B)  Shipping notice.
C)  Purchase requisition.
D)  Warehousing.E) B) and C)
F) None of the above

Question 4

Computerization of the conversion process results in all except:

Accepted Answer

A)  Automatic computation of materials requirements based on purchase orders.
B)  Timely transfer of inventories throughout the process.
C)  Automatic updating of inventory status reports.
D)  Automatic computation of materials requirements based on sales orders.E) C) and D)
F) None of the above

Question 5

This software allows engineers to work with advanced graphics at electronic work stations to create 3-D models that depict the production environment.

Accepted Answer

A)  Computer-integrated manufacturing systems CIMs) 
B)  Computer aided design CA
D)  
C)  Material resource planning MRP) 
D)  Computer aided manufacturing CAM) E) A) and B)
F) A) and D)

Question 6

Earnings management is the act of misstating financial information in order to improve financial statement results.

Accepted Answer

A) True 
 B)False

Question 7

The act of misstating financial information in order to improve financial statement results is referred to as:

Accepted Answer

A)  Just in time production systems.
B)  Manufacturing resource planning.
C)  Earnings management.
D)  Absorption costing.E) B) and D)
F) A) and B)

Question 8

Perpetual inventory systems:

Accepted Answer

A)  Record changes in inventory categories only at the end of each period.
B)  Record changes in inventory categories only when sales are made.
C)  Record changes in inventory categories whenever material is moved from one category to another.
D)  Does not address raw materials.E) B) and C)
F) A) and B)

Question 9

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

Accepted Answer

A)  Production schedule
B)  Production orders schedule
C)  Maintenance and control schedule
D)  Human resources scheduleE) All of the above
F) C) and D)

Question 10

Within the logistics function, segregation of duties means:

Accepted Answer

A)  One person should not have both inventory and accounting responsibilities.
B)  One person should not have production responsibilities over more than one station.
C)  One person should not have quality assurance responsibilities over a work station other than his own.
D)  Each person can only have one duty or function in the production function.E) None of the above
F) C) and D)

Question 11

Within the planning component of the logistics function, which of the following processes is responsible for preparing bill of materials and the operations list?

Accepted Answer

A)  Research and development
B)  Capital budgeting
C)  Engineering
D)  SchedulingE) A) and B)
F) A) and C)

Question 12

Resources required in the conversion process include materials, labor, overhead, and fixed assets.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following internal controls is typically associated with the maintenance of accurate inventory records?

Accepted Answer

A)  Performing regular comparisons of perpetual records with recent costs of inventory items
B)  Using a just-in-time system to keep inventory levels at a minimum
C)  Performing a match of the purchase request, receiving report, and purchase order before payment is approved
D)  Using physical inventory counts as a basis for adjusting the perpetual recordsE) C) and D)
F) B) and D)

Question 14

A system which involves recording purchases of raw materials inventory, recording all the components of work in process, and recording the total cost of sales for products completed and sold is referred to as:

Accepted Answer

A)  A perpetual inventory system.
B)  The accounting information system.
C)  A periodic inventory system.
D)  None of the above.E) A) and B)
F) B) and C)

Question 15

The three primary components of the logistics function are 1) planning, 2) production, and 3) sales.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following factors influences the need to safeguard and monitor inventory movement?

Accepted Answer

A)  Inconsistent or high levels of inventory movement.
B)  If the inventory is held at various locations.
C)  If a company's inventory items are difficult to differentiate.
D)  Each of the answers, A, B, and C are correct.E) A) and C)
F) A) and B)

Question 17

Routing is the:

Accepted Answer

A)  Path electronic messages follow in the inventory system.
B)  Issuance and movement of materials into the various production phases.
C)  Physical movement of materials from the point of sale to the customer.
D)  Physical movement of materials from the vendor to the inventory stores facility.E) B) and D)
F) B) and C)

Question 18

Which of the following questions is most likely to be found on an internal control questionnaire concerning a company's conversion processes?

Accepted Answer

A)  Are vendor invoices for materials purchases approved for payment by someone who is independent of the cash disbursements function?
B)  Are signed checks for materials purchased mailed promptly without being returned to the department responsible for processing the disbursement?
C)  Are approved requisitions required when materials are released from the company's warehouse into production?
D)  Are details of payments for materials balanced to the total posted to the general ledger?E) A) and D)
F) None of the above

Question 19

If a manufacturing company's inventory of supplies consists of a large number of small items, which of the following would be considered a weakness in internal controls?

Accepted Answer

A)  Supplies of relatively low value are expensed when acquired.
B)  Supplies are physically counted on a cycle basis, whereby limited counts occur quarterly and each item is counted at least once annually.
C)  The stores function is responsible for updating perpetual records whenever inventory items are moved.
D)  Perpetual records are maintained for inventory items only if they are significant in value.E) A) and B)
F) None of the above

Question 20

The issuance and movement of materials into the various production phases is referred to as:

Accepted Answer

A)  Production scheduling process.
B)  Inventory control process.
C)  The routing process.
D)  The production orders process.E) All of the above
F) A) and B)

Exam 11: Conversion Processes and Controls

The issuance and movement of materials into the various production phases is referred to as:

Correct AnswerverifiedShow Answer

Within the planning component of the logistics function, which of the following processes is responsible for preparing bill of materials and the operations list?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Earnings management is the act of misstating financial information in order to improve financial statement results.

Correct AnswerverifiedShow Answer

Which of the following is NOT a primary component of the logistics function?

Correct AnswerverifiedShow Answer

Resources required in the conversion process include materials, labor, overhead, and fixed assets.

Correct AnswerverifiedShow Answer

Which of the following internal controls is typically associated with the maintenance of accurate inventory records?

Correct AnswerverifiedShow Answer

If a manufacturing company's inventory of supplies consists of a large number of small items, which of the following would be considered a weakness in internal controls?

Correct AnswerverifiedShow Answer

The three primary components of the logistics function are 1) planning, 2) production, and 3) sales.

Correct AnswerverifiedShow Answer

This software allows engineers to work with advanced graphics at electronic work stations to create 3-D models that depict the production environment.

Correct AnswerverifiedShow Answer

The final hub in the logistics function which involves a follow-up to production, where the products are inspected before they are moved to the warehouse or shipping area is referred to as:

Correct AnswerverifiedShow Answer

Routing is the:

Correct AnswerverifiedShow Answer

Perpetual inventory systems:

Correct AnswerverifiedShow Answer

For which of the following computerized conversion systems is Wal-Mart well known?

Correct AnswerverifiedShow Answer

Computerization of the conversion process results in all except:

Correct AnswerverifiedShow Answer

Which of the following questions is most likely to be found on an internal control questionnaire concerning a company's conversion processes?

Correct AnswerverifiedShow Answer

The act of misstating financial information in order to improve financial statement results is referred to as:

Correct AnswerverifiedShow Answer

Which of the following factors influences the need to safeguard and monitor inventory movement?

Correct AnswerverifiedShow Answer

A system which involves recording purchases of raw materials inventory, recording all the components of work in process, and recording the total cost of sales for products completed and sold is referred to as:

Correct AnswerverifiedShow Answer

Within the logistics function, segregation of duties means:

Correct AnswerverifiedShow Answer

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