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HCCS ACNT 2309 Exam 1 Multiple Choice M

Satisfactory Essays
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1. Sully Company uses 3,000 yards of canvas each day to make tents. It usually takes ten days from the time Sully orders the material to when it is received. If Sully’s desired safety stock is 12,000 yards, what is Sully’s order point?
a.
12,000 yards
b.
21,000 yards
c.
30,000 yards
d.
42,000 yards

ANS: D
3,000 (daily usage) x 10 (lead time)
30,000
Safety stock
12,000
Order point
42,000

PTS: 1 DIF: Moderate REF: P. OBJ: 1
NAT: IMA 3A - Strategic Management TOP: AACSB - Analytic

2. What is the objective of the economic order quantity (EOQ) model for inventory?
a.
To minimize order costs or carrying costs, whichever are higher
b.
To minimize order costs or carrying costs and maximize the rate of inventory turnover
c.
To minimize …show more content…

PTS: 1 DIF: Moderate REF: P. OBJ: 3
NAT: IMA 2B - Cost Management TOP: AACSB - Reflective

9. The Bisset Corporation uses Raw Material A in a manufacturing process. Information as to balances on hand, purchases, and requisitions of Raw Material A is given in the following table.

Raw Material A

Date

Transaction

Number of Units

Unit Price

Balance of Units

Jan. 1
Beginning balance
100
$1.40 100

Jan. 24
Purchased
300
$1.55

400

Feb. 8
Issued
80

320

Mar. 16
Issued
140

180

Jun. 11
Purchased
150
$1.62

330

Aug. 18
Issued
130

200

Sep. 6
Issued
110

90

Oct. 15
Purchased
150
$1.70

240

Dec. 29
Issued
140

100

If a perpetual inventory record of Raw Material A is maintained on a LIFO basis, the March 16 issue will consist of:
a.
20 units @ $1.40 and 120 units @ $1.55.
b.
100 units @ $1.40 and 40 units @ $1.55.
c.
140 units @ $1.55.
d.
100 units @ $1.55 and 40 units @ $1.40.

ANS: C
On a LIFO basis, the 140 units issued on March 16 would have been assigned a cost of $1.55 per unit as follows:

Number of Units

Unit Price
Units issued on February 8
Units issued on March 16
Beginning Balance
100
$1.40

Jan. 24 Purchase
300
$1.55
80
140

PTS: 1 DIF: Moderate REF: P. OBJ: 3
NAT: IMA 2B - Cost Management TOP: AACSB - Analytic 10. The Bisset Corporation uses Raw Material A in a manufacturing process.

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