Question & Answer

There are 21 correct answers in the following multiple choice questions (some questions have multiple answers that are correct). To attain a perfect score on the quiz, all correct answers must be given. Each correct answer is worth 1 point. Each omitted answer or wrong answer reduces the score by 1 point, and each additional answer beyond the correct number of answers reduces the score by 1 point. Percentage on the quiz is based on the total number of correct answers. 39.1 Material handling is usually not associated with transportation between facilities that involves rail, truck, air, or waterway delivery of goods: (a) true or (b) false? 39.2 Fixed routing is associated with which of the following types of manufacturing systems (two best answers): (a) automated production lines, (b) automated storage systems, (c) cellular manufacturing systems, (d) flexible manufacturing systems, (e) job shops, and (f) manual assembly lines? 39.3 Which of the following types of material handling equipment are typically used in a process type layout (two best answers): (a) conveyors, (b) cranes and hoists, (c) fork lift trucks, and (d) railguided vehicles? 39.4 Batch model production lines are most suited to which one of the following production situations: (a) job shop, (b) mass production, or (c) medium production? 39.5 Precedence constraints are best described by which one of the following: (a) launching sequence in a mixed model line, (b) limiting value of the sum of element times that can be assigned to a worker or station, (c) order of workstations along the line, or (d) sequence in which the work elements must be done? 39.6 Which of the following phrases are most appropriate to describe the characteristics of tasks that are performed at automated workstations (three best answers): (a) complex, (b) consists of multiplework elements, (c) involves a single work element, (d) involves straight-line motions, (e) requires sensory capability, and (f) simple? 39.7 The transfer line is most closely associated with which one of the following types of production operations: (a) assembly, (b) automotive chassis fabrication, (c) machining, (d) pressworking, or (e) spot welding? 39.8 A dial indexing machine uses which one of the following types of workpart transfer: (a) asynchronous, (b) continuous, (c) parts passed by hand, or (d) synchronous? 39.8 A dial indexing machine uses which one of the following types of workpart transfer: (a) asynchronous, (b) continuous, (c) parts passed by hand, or (d) synchronous? 39.10 Most parts classification and coding systems are based on which of the following types of part attributes (two best answers): (a) annual production rate, (b) date of design, (c) design, (d) manufacturing, and (e) weight? 39.11 What is the dividing line between a manufacturing cell and a flexible manufacturing system: (a) two machines, (b) four machines, or (c) six machines? 39.12 A machine capable of producing different part styles in a batch mode of operation qualifies as a flexible manufacturing system: (a) true or (b) false? 39.13 The physical layout of a flexible manufacturing system is determined principally by which one of the following: (a) computer system, (b) material handling system, (c) part family, (d) processing equipment, or (e) weight of parts processed? 39.14 Industrial robots can, in general, most easily handle which one of the following part types in a flexible machining system: (a) heavy parts, (b) metal parts, (c) nonrotational parts, (d) plastic parts, or (e) rotational parts? 39.15 Flexible manufacturing systems and cells are generally applied in which one of the following areas: (a) high-variety, low-volume production, (b) low variety, (c) low volume, (d) mass production, (e) medium-volume, medium-variety production? 39.16 Which one of the following technologies is most closely associated with flexible machining systems: (a) lasers, (b) machine vision, (c) manual assembly lines, (d) numerical control, or (f) transfer lines?

Describe, in general terms, why Congress implemented the AMT.

Discuss the importance of selecting an appropriate cost driver for cost allocation.

Ray and Matias each own 50 percent capital and profits interests in Alpine Properties LLC. Alpine builds and manages rental real estate, and Ray and Matias each work full time (over 1,000 hours per year) managing Alpine. Alpine’s liabilities (at both the beginning and end of the year) consist of $1,500,000 in nonrecourse mortgages obtained from an unrelated bank and secured by various rental properties. At the beginning of the current year, Ray and Matias each had a tax basis of $250,000 in his LLC interest, including his share of the nonrecourse mortgage liability. Alpine’s ordinary business losses for the current year totaled $600,000, and neither member is involved in other activities that generate passive income. a. How much of each member’s loss is suspended because of the tax-basis limitation? b. How much of each member’s loss is suspended because of the at-risk limitation? c. How much of each member’s loss is suspended because of the passive activity loss limitation? [Hint: See §469(c)(7).] d. If both Ray and Matias are single and Ray has a current-year loss of $100,000 from a sole proprietorship, how much trade or business loss can each deduct on his tax return in the current year?

There are 15 correct answers in the following multiple choice questions (some questions have multiple answers that are correct). To attain a perfect score on the quiz, all correct answers must be given. Each correct answer is worth 1 point. Each omitted answer or wrong answer reduces the score by 1 point, and each additional answer beyond the correct number of answers reduces the score by 1 point. Percentage on the quiz is based on the total number of correct answers. 41.1 Which one of the following terms best describes the overall function of production planning and control: (a) inventory control, (b) manufacturing logistics, (c) manufacturing engineering, (d) mass production, or (e) product design? 41.2 Which of the following are the three categories of items usually listed in the master production schedule: (a) components used to build the final products, (b) firm customer orders, (c) general product lines, (d) orders for maintenance and spare parts, (e) sales forecasts, and (f) spare tires? 41.3 Inventory carrying costs include which of the following (two best answers): (a) equipment downtime, (b) interest, (c) production, (d) setup, (e) spoilage, (f) stock-out, and (g) storage? 41.4 Which of the following are the three terms in the economic order quantity formula: (a) annual demand rate, (b) batch size, (c) cost per piece, (d) holding cost, (e) interest rate, and (f) setup cost? 41.5 Order point inventory systems are intended for which of the following (two best answers): (a) dependent demand items, (b) independent demand items, (c) low production quantities, (d) mass production quantities, and (e) mid-range production quantities? 41.6 With which of the following manufacturing resources is capacity requirements planning primarily concerned (two best answers): (a) component parts, (b) direct labor, (c) inventory storage space, (d) production equipment, and (e) raw materials? 41.7 The word kanban is most closely associated with which one of the following: (a) capacity planning, (b) economic order quantity, (c) just-in-time production, (d) master production schedule, or (e) material requirements planning? 41.8 Machine loading refers most closely to which one of the following: (a) assigning jobs to a work center, (b) floor foundation in the factory, (c) managing work-in-process in the factory, (d) releasing orders to the shop, or (e) sequencing jobs through a machine?

: Describe the major components of the classical perspective and current uses of the management science approach

1. What does this analysis assume about the price elasticity of demand for the new entrant (a) above PL; (b) below PL? 2. Can you think of any limitations with the limit price model?

What is the difference between dry pressing and semi-dry pressing of traditional ceramic parts?

If a good were free, why would total consumer surplus equal total utility? What would be the level of marginal utility?

Koch Corporation’s adjusted trial balance contained the following asset accounts at December 31, 2014: Cash $7,000; Land $40,000; Patents $12,500; Accounts Receivable $90,000; Prepaid Insurance $5,200; Inventory $30,000; Allowance for Doubtful Accounts $4,000; Equity Investments (trading) $11,000. Prepare the current assets section of the balance sheet, listing the accounts in proper sequence.

Glaus Leasing Company agrees to lease machinery to Jensen Corporation on January 1, 2014. The following information relates to the lease agreement. 1. The term of the lease is 7 years with no renewal option, and the machinery has an estimated economic life of 9 years. 2. The cost of the machinery is $525,000, and the fair value of the asset on January 1, 2014, is $700,000. 3. At the end of the lease term, the asset reverts to the lessor and has a guaranteed residual value of $100,000. Jensen depreciates all of its equipment on a straight-line basis. 4. The lease agreement requires equal annual rental payments, beginning on January 1, 2014. 5. The collectibility of the lease payments is reasonably predictable, and there are no important uncertainties surrounding the amount of costs yet to be incurred by the lessor. 6. Glaus desires a 10% rate of return on its investments. Jensen’s incremental borrowing rate is 11%, and the lessor’s implicit rate is unknown. Instructions (Assume the accounting period ends on December 31.) (a) Discuss the nature of this lease for both the lessee and the lessor. (b) Calculate the amount of the annual rental payment required. (c) Compute the present value of the minimum lease payments. (d) Prepare the journal entries Jensen would make in 2014 and 2015 related to the lease arrangement. (e) Prepare the journal entries Glaus would make in 2014 and 2015.

Why are single station assembly cells generally not suited to high-production jobs?

Assume that a firm discharges waste into a river. As a result, the marginal social costs (MSC) are greater than the firm’s marginal (private) costs (MC). The following table shows how MC, MSC, AR and MR vary with output. 1 2 3 4 5 6 7 8 MC 23 21 23 25 27 30 35 42 MSC 35 34 38 42 46 52 60 72 TR 60 102 138 168 195 219 238 252 AR 60 51 46 42 39 36.5 34 31.5 MR 60 42 36 30 27 24 19 14 (a)  How much will the firm produce if it seeks to maximise profits? (b)  What is the socially efficient level of output (assuming no externalities on the demand side)? (c)  How much is the marginal external cost at this level of output? (d)  What size tax would be necessary for the firm to reduce its output to the socially efficient level? (e)  Why is the tax less than the marginal externality? (f)   Why might it be equitable to impose a lump-sum tax on this firm? (g)  Why will a lump-sum tax not affect the firm’s output (assuming that in the long-run the firm can still make at least normal profit)?

Of what value is a common set of standards in financialaccounting and reporting?

By what means would a depressed country in an economic union with a single currency be able to recover? Would the market provide a satisfactory solution to its problems or would (union) government intervention be necessary, and if so, what form could that intervention take?

Direct method using estimated costs, benchmarking Devon Ltd allocates support department costs using the direct method and estimated costs. The support department costs are budgeted at $88 000 for department A, $63 000 for department B, and $40 000 for department C. These costs are allocated using the proportion of total cost the firm would pay to an outside service provider.   Required (a)          Allocate budgeted support department costs using the direct method, first using labour hours and then with the outside cost proportions as the allocation bases. (b)          Could Devon Ltd use the cost of purchasing outside as an efficiency benchmark for the cost of both the support departments and the user departments? List several advantages and disadvantages of this approach.

Sergey Co. has net cash provided by operating activities of $1,200,000. Its average current liabilities for the period are $1,000,000, and its average total liabilities are $1,500,000. Comment on the company’s liquidity and financial flexibility, given this information.

There are 19 correct answers in the following multiple choice questions (some questions have multiple answers that are correct). To attain a perfect score on the quiz, all correct answers must be given. Each correct answer is worth 1 point. Each omitted answer or wrong answer reduces the score by 1 point, and each additional answer beyond the correct number of answers reduces the score by 1 point. Percentage on the quiz is based on the total number of correct answers. 40.1 The manufacturing engineering department in an organization is best described as which one of the following: (a) branch of the sales department, (b) concurrent engineers, (c) management, (d) product designers, (e) production supervisors, or (f) technical staff function? 40.2 Which of the following are the usual responsibilities of the manufacturing engineering department (four best answers): (a) advising on design for manufacturability, (b) facilities planning, (c) marketing the product, (d) plant management, (e) process improvement, (f) process planning, (g) product design, (h) solving technical problems in the production departments, and (i) supervision of production workers? 40.3 Which of the following are considered basic processes, as opposed to secondary processes (four correct answers): (a) annealing, (b) anodizing, (c) drilling, (d) electroplating, (e) forward hot extrusion to produce aluminum bar stock, (f) impression die forging, (g) rolling of sheet steel, (h) sand casting, (i) sheet-metal stamping, (j) spot welding, (k) surface grinding of hardened steel, (l) tempering of martensitic steel, and (m) turning? 40.4 Which of the following would be considered secondary processes, as opposed to basic processes (four correct answers): (a) annealing, (b) arc welding, (c) drilling, (d) electroplating, (e) extrusion to produce steel automotive components, (f) impression die forging, (g) painting, (h) plastic injection molding, (i) rolling of sheet steel, (j) sand casting, (k) sheet-metal stamping, (l) sintering of pressed ceramic powders, and (m) ultrasonic machining? 40.5 Which of the following are operations to enhance physical properties (three correct answers): (a) annealing, (b) anodizing, (c) die casting, (d) drilling, (e) electroplating, (f) rolling of nickel alloys, (g) sheet metal drawing, (h) sintering of pressed ceramic powders, (i) surface grinding of hardened steel, (j) tempering of martensitic steel, (k) turning, and (l) ultrasonic cleaning? 40.6 A route sheet is a document whose principal function is which one of the following: (a) continuous improvement, (b) design for manufacturability, (c) provides authorization for material handlers to move the part, (d) quality inspection procedure, (e) specifies the process plan, or (f) specifies the detailed method for a given operation? 40.7 In a make or buy situation, the decision should always be to purchase the component if the vendor’s quoted price is less than the in-house estimated cost of the component: (a) true or (b) false? 40.8 Which one of the following types of computer-aided process planning relies on parts classification and coding in group technology: (a) generative CAPP, (b) retrieval CAPP, (c) traditional process planning, or (d) none of the preceding?

A continuous hot rolling mill has eight stands. The dimensions of the starting slab are: thickness = 3.0 in, width = 15.0 in, and length = 10 ft. The final thickness is to be 0.3 in. Roll diameter at each stand = 36 in, and rotational speed at stand number 1 = 30 rev/min. It is observed that the speed of the slab entering stand 1 = 240 ft/min. Assume that no widening of the slab occurs during the rolling sequence. Percent reduction in thickness is to be equal at all stands, and it is assumed that the forward slip will be equal at each stand. Determine (a) percent reduction at each stand, (b) rotational speed of the rolls at stands 2 through 8, and (c) forward slip. (d) What is the draft at stands 1 and 8? (e) What is the length and exit speed of the final strip exiting stand 8?

Renee operates a proprietorship selling collectibles over the Web. This year, Renee’s business reported revenue of $95.5 million and deducted $88.6 million in expenses and loss carryovers. Her business deductions included cost of goods sold of $48.5 million, sales commissions paid of $16.9 million, $10.5 million of interest paid on a mortgage, $10.7 million of depreciation, and $2 million deduction for a net operating loss carryover.

A single model manual assembly line produces a product whose work content time = 47.8 min. The line has 24 workstations with a manning level = 1.25. Available shift time per day = 8 hr, but downtime during the shift reduces actual production time to 7.6 hr on average. This results in an average daily production of 256 units/day. Repositioning time per worker is 8% of cycle time. Determine (a) line efficiency, (b) balancing efficiency, and (c) repositioning time.

An analyst recently suggested that there will be a major economic expansion that will favorably affect the prices of highrated, fixed-rate bonds because the credit risk of bonds will decline as corporations improve their performance. Assuming that the economic expansion occurs, do you agree with the analyst’s conclusion? Explain. (LO2)

It is possible that as people get richer they will spend a smaller and smaller fraction of each rise in income (and save a larger fraction). Why might this be so? What effect will it have on the shape of the consumption function?

John and Tara Smith are married and have lived in the same home for over 20 years. John’s uncle Tim, who is 64 years old, has lived with the Smiths since March of this year. Tim is searching for employment but has been unable to find any—his gross income for the year is $2,000. Tim used all $2,000 toward his own support. The Smiths provided the rest of Tim’s support by providing him with lodging valued at $5,000 and food valued at $2,200.  a. Are the Smiths able to claim Tim as a dependent?

Dimitri Company, a manufacturer of small tools, provided the following information from its accounting records for the year ended December 31, 2014. Inventory at December 31, 2014 (based on physical count of goods in Dimitri’s plant, at cost, on December 31, 2014) $1,520,000 Accounts payable at December 31, 2014 1,200,000 Net sales (sales less sales returns) 8,150,000 Additional information is as follows. 1. Included in the physical count were tools billed to a customer f.o.b. shipping point on December 31, 2014. These tools had a cost of $31,000 and were billed at $40,000. The shipment was on Dimitri’s loading dock waiting to be picked up by the common carrier. 2. Goods were in transit from a vendor to Dimitri on December 31, 2014. The invoice cost was $76,000, and the goods were shipped f.o.b. shipping point on December 29, 2014. 3. Work in process inventory costing $30,000 was sent to an outside processor for plating on December 30, 2014. 4. Tools returned by customers and held pending inspection in the returned goods area on December 31, 2014, were not included in the physical count. On January 8, 2015, the tools costing $32,000 were inspected and returned to inventory. Credit memos totaling $47,000 were issued to the customers onthe same date. 5. Tools shipped to a customer f.o.b. destination on December 26, 2014, were in transit at December 31, 2014, and had a cost of $26,000. Upon notification of receipt by the customer on January 2, 2015, Dimitri issued a sales invoice for $42,000. 6. Goods, with an invoice cost of $27,000, received from a vendor at 5:00 p.m. on December 31, 2014, were recorded on a receiving report dated January 2, 2015. The goods were not included in the physical count, but the invoice was included in accounts payable at December 31, 2014. 7. Goods received from a vendor on December 26, 2014, were included in the physical count. However, the related $56,000 vendor invoice was not included in accounts payable at December 31, 2014, because the accounts payable copy of the receiving report was lost. 8. On January 3, 2015, a monthly freight bill in the amount of $8,000 was received. The bill specifically related to merchandise purchased in December 2014, one-half of which was still in the inventory at December 31, 2014. The freight charges were not included in either the inventory or in accounts payable at December 31, 2014. Instructions Using the format shown below, prepare a schedule of adjustments as of December 31, 2014, to the initial amounts per Dimitri’s accounting records. Show separately the effect, if any, of each of the eight transactions on the December 31, 2014, amounts. If the transactions would have no effect on the initial amount shown, enter NONE. Accounts Net Inventory Payable Sales Initial amounts $1,520,000 $1,200,000 $8,150,000 Adjustments—increase (decrease) 1 2 3 4 5 6 7 8 Total adjustments Adjusted amounts $ $ $