1.

An effective cost control system should include: *

a. An established plan of objectives and goals to be achieved.
b. Regular reports showing the difference between goals and actual performance.
c. Specific assignment of duties and responsibilities.
d. All of these are correct
2. To effectively control materials, a business must maintain: *
a. limited access.
b. Combination of duties.
c. Safety stock.
d. None of these are correct.
3. The cost of receiving inventory is regarded as *
a. an ordering cost.
b. a carrying cost.
c. a purchasing cost.
d. a cost of not carrying goods in stock.
4. ____ is a "pull" system of production and inventory control. *
a. EDI
b. EOQ
c. JIT
d. ABC
5. In a JIT system, the quality of each product begins with *
a. a company's vendors.
b. employees.
c. inspection of finished goods inventory.
d. a good product warranty.
6. Reducing inventory to the lowest possible levels is a major focus of *
a. JIT.
b. push inventory systems.
c. EOQ.
d. ABC.
7. The JIT philosophy does not focus on *
a. standardizing parts used in products.
b. eliminating waste in the production process.
c. finding the absolute lowest price for purchased parts.
d. improving quality of output.
8. 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 the total order costs and carrying costs over a period of time
d. To order sufficient quantity to economically meet the next period's demand
9. Carrying costs would include all of the following except: *
a. Warehouse rent.
b. Inspection employees’ wages.
c. Losses due to obsolescence.
d. Property taxes.
10. In a backflush accounting system, a single account is used for the following: *
a. Work in process and finished goods inventories.
b. Finished goods inventories and cost of goods sold.
c. Factory overhead and raw materials.
d. Labor and overhead.
11. Which of the following is not true about backflush costing? *
a. Different companies may choose different trigger points.
b. Production costs are attached to products as they move through work in
process.
c. A single account is used for raw and in-process materials because materials
are issued to production when received from the supplier.
d. Direct labor is usually insignificant in a highly automated system, so is
not cost effective to account for it separately.
12. The form used to notify the purchasing agent that additional materials are needed is
known as a: *
a. Purchase order.
b. Vendor's invoice.
c. Receiving report.
d. Purchase requisition.

13. What is EOQ? *

a. 4,000 pounds
b. 800 pounds
c. 400 pounds
d. 200 pounds

14. What is the ordering cost and carrying cost? *

a. 4,000
b. 3,215
c. 6,000
d. 4,123
15. What is the reorder point? *
a. 800
b. 1,600
c. 2,400
d. 3,200

16. Cris Co. has materials cost in the June 1 Raw and In Process (RIP) of P10,000
materials received during the month of June P205,000 and materials cost in the June
30 Raw and In Process of P12,500. What would be the amount to be backflushed from
RIP to Finished Goods at the end of June? 
a. 800
b. 1,600
c. 2,400
d. 3,200

17. In backflush costing, if the conversion cost in the Raw and In Process was P500 on
July 1 and P1,000 on July 31, the account to be credited at the end of July for the
P500 increase would 
a. Raw and In Process
b. Finished Goods
c. Raw materials
d. Cost of Goods Sold

18. The KL Co. predicts that the optimal order size is 1,600 units. The materials are
expected to cost P20.00 per unit. It is anticipated that it will cost P40 to place each
order. The annual carrying cost is P2.00. What is the company's estimated annual
usage?

a. bill of materials
b. purchase requisition
c. materials requisition
d. Receiving report
e. purchase order
1. Certifies quantities received and reports results of inspection and testing d
2. contracts for quantities to be delivered e
3. inform the purchasing agent of a need for materials. b
4. authorizes the storeroom to deliver types and quantities of materials to a given
department c
5. is the list of materials requirements for each step in the production sequence a

19. What is the economic order quantity?

20. Suppose that Noli orders 3,000 bats at a time. What is the total annual inventory cost?

21. compute for the amount of materials backflushed from RIP to Finished Goods. *

22. compute for the amount of materials backflushed from FG to Cost of Goods Sold.
23. What is the calculated material cost to be backflushed from RIP to cost of goods
sold? *

24. What is the amount of conversion costs to be backflushed to cost of goods sold?