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| 1 | |
The production process of the Crystal Water Beverage Bottling Company is extremely simple with only three machines used. The production process commences with Machine A, the sterilising machine, which can handle the sterilisation of 4500 bottles per hour. The sterilised bottles are then passed through Machine B, the filling machine, which can handle the filling of 3300 bottles per hour. The filled bottles are then passed through Machine C, the capping machine, which can handle the capping of 5800 bottles per hour. Currently, 3000 bottles are produced per hour. The marketing manager has suggested that there is unlimited demand for the output and he suggests that the hourly production should be increased to at least 4000 bottles per hour. The operations manager briefly explains to the marketing manager the theory of constraints and why his suggestion cannot be accepted with the current machinery. The theory of constraints can: |
| | A) | identify where bottlenecks exist and limit the rate of output to these bottlenecks |
| | B) | identify problems with raw material suppliers |
| | C) | identify problems with component suppliers |
| | D) | identify problems with employees |
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| 2 | |
The production process of the Crystal Water Beverage Bottling Company is extremely simple with only three machines used. The production process commences with Machine A, the sterilising machine, which can handle the sterilisation of 4500 bottles per hour. The sterilised bottles are then passed through Machine B, the filling machine, which can handle the filling of 3300 bottles per hour. The filled bottles are then passed through Machine C, the capping machine, which can handle the capping of 5800 bottles per hour. Currently, 3000 bottles are produced per hour. The marketing manager has suggested that there is unlimited demand for the output and he suggests that the hourly production should be increased to at least 4000 bottles per hour. The operations manager briefly explains to the marketing manager the theory of constraints and why his suggestion cannot be accepted with the current machinery. The maximum number of bottles that can be processed per hour is: |
| | A) | 5800 bottles |
| | B) | 4500 bottles |
| | C) | 4000 bottles |
| | D) | 3300 bottles |
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| 3 | |
The production process of the Crystal Water Beverage Bottling Company is extremely simple with only three machines used. The production process commences with Machine A, the sterilising machine, which can handle the sterilisation of 4500 bottles per hour. The sterilised bottles are then passed through Machine B, the filling machine, which can handle the filling of 3300 bottles per hour. The filled bottles are then passed through Machine C, the capping machine, which can handle the capping of 5800 bottles per hour. Currently, 3000 bottles are produced per hour. The marketing manager has suggested that there is unlimited demand for the output and he suggests that the hourly production should be increased to at least 4000 bottles per hour. The operations manager briefly explains to the marketing manager the theory of constraints and why his suggestion cannot be accepted with the current machinery. The costing method for measuring the effects of bottlenecks and operational decisions that uses financial measures of throughput, inventory and operating expense is called: |
| | A) | business process re-engineering |
| | B) | activity-based management |
| | C) | target costing |
| | D) | throughput accounting |
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| 4 | |
Pineapple Products is facing increased
competitive pressure in the market for its main product, canned pineapple
slices. Pineapple Products’ management feel that by lowering the price per
unit, Pineapple will be able to maintain its market share. The following
information is from Pineapple Products’ accounting records: Current selling price per unit | $1.20 | Current profit per unit | $0.40 | Proposed selling price per unit | $0.90 | Proposed profit per unit | $0.20 |
Pineapple Products’ target cost per unit
is: |
| | A) | $0.90 |
| | B) | $0.30 |
| | C) | $0.70 |
| | D) | $0.80 |
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| 5 | |
According to the theory of constraints, producing more non-bottleneck output: |
| | A) | creates more inventories and improves throughput |
| | B) | creates less inventories and improves throughput |
| | C) | creates less pressure at bottleneck work stations |
| | D) | creates more inventories and does not increase throughput |
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| 6 | |
The product life cycle is defined as: |
| | A) | the time from the initial conception of a product through to its abandonment |
| | B) | the time from the conception of a product through to its proper disposal |
| | C) | the time from the production of a product through to its proper disposal |
| | D) | the time from the product design through to the end of its customer support |
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| 7 | |
Which of the following is not a stage of a product life cycle? |
| | A) | Product planning and initial concept design. |
| | B) | Product design and development. |
| | C) | Production. |
| | D) | Disposal of the product taking environmental considerations into account. |
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| 8 | |
Is business process re-engineering (BPR) the same as activity-based management (ABM)? |
| | A) | Yes, they both provide information about the costs and value status of the activities within the business process. |
| | B) | Yes, they are both cost management methods. |
| | C) | Yes, business process re-engineering has the same methodology as activity-based costing. |
| | D) | No, the focus of activity-based management is on process improvement, which is the incremental continuous improvement of processes, whereas business process re-engineering involves fundamental changes to the way processes is structured. |
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| 9 | |
Which of the following is not used to reduce costs under activity-based management (ABM)? |
| | A) | Identifying the major opportunities for cost reduction. |
| | B) | Identifying the major opportunities for increasing market share. |
| | C) | Determining the real causes of the costs. |
| | D) | Developing a program to eliminate the causes and, therefore, the costs. |
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| 10 | |
A predicted outcome of activity-based management is: |
| | A) | increased market share |
| | B) | increased employee satisfaction |
| | C) | increased employee motivation |
| | D) | increased customer value and profitability |
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