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The cost accounting function determines product costs, costs of goods sold, and inventory values for financial reporting purposes and management reporting. What is a sample control activity that could be used to control for a poorly designed cost accounting system which may result in misallocation of costs to products?


A) Document and authorize product cost accounting procedures that describe costing methods.
B) Use a BOM for every product in all steps of production.
C) Control and account for raw materials issued to production.
D) Ensure that system development is reviewed by appropriate IT and accounting staff.

E) A) and C)
F) All of the above

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RAM Manufacturing LLC is a rapidly growing manufacturer of parts for the automotive industry. RAM Manufacturing is launching a new disc brake product. Maeve, a newly hired cost accountant, has been asked to assign a number of costs incurred in manufacturing the disc brakes to the appropriate cost category. To what product cost category would the steel used in the disc rotor in the new disc brakes be assigned to?

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The steel used in th...

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RAM Manufacturing LLC is a rapidly growing manufacturer of parts for the automotive industry. RAM Manufacturing is launching a new disc brake product. Maeve, a newly hired cost accountant, has been asked to assign a number of costs incurred in manufacturing the disc brakes to the appropriate cost category. To what product cost category would the grease used to keep the shop-floor machines working properly be assigned?

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The grease used on t...

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A digital factory that is connected, networked, and fully integrated creates opportunities to minimize costs of downtime and underperformance in production and to enable the best output from factory assets and employees. What is an advantage that companies see by using digital manufacturing?


A) A digital factory requires securing every network, cloud platform, operating system, and application across its supply chain and production network.
B) Employees might be resistant to change if they fear losing their jobs.
C) Providing more flexibility to meet customer demands
D) Leadership support plays an essential role in the success of an initiative.

E) A) and D)
F) C) and D)

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Overall equipment effectiveness (OEE) is a key performance indicator that measures how well production resources are used by identifying the percentage of productive manufacturing time. An OEE of 100% means that all products produced are acceptable (100% quality) , produced at the fastest speeds (100% performance) , and ________. Management uses OEE to identify process and performance improvement potential.


A) manufactured and sold (100% sales)
B) manufactured and properly inventoried (100% finished)
C) manufactured without interruptions in production (100% availability)
D) manufactured and shipped (100% shipped)

E) A) and D)
F) B) and C)

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Overall equipment effectiveness (OEE) is a key performance indicator that measures how well production resources are used by identifying the percentage of productive manufacturing time. An OEE of 100% means that ________, produced at the fastest speeds (100% performance) , and manufactured without interruptions in production (100% availability) . Management uses OEE to identify process and performance improvements potential.


A) all products produced are acceptable (100% quality)
B) all products produced are sold (100% sales)
C) all products produced are properly inventoried (100% finished)
D) all products produced are shipped (100% shipped)

E) A) and B)
F) A) and C)

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Which control activity listed below is a quality management control activity?


A) Regularly analyze warranty and repair costs.
B) Manufacture products according to authorized BOM, BOO, and MPS documents.
C) Automate manufacturing operations.
D) Adhere to industry regulations and safety standards.

E) All of the above
F) A) and C)

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What are the source document output(s) of the Quality Management process?


A) Testing reports
B) Production plan
C) Production schedule, production orders, material requisitions, move tickets
D) Production reports, job time tickets

E) B) and D)
F) None of the above

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The cost accounting function determines product costs, costs of goods sold, and inventory values for financial reporting purposes and management reporting. What is a sample control activity that could be used to control for inadequate product cost recording that may result in error, fraud, or financial losses?


A) Document and authorize product cost accounting procedures that describe costing methods.
B) Use a BOM for every product in all steps of production.
C) Implement change management and supporting IT general controls.
D) Ensure that system development is reviewed by appropriate IT and accounting staff.

E) A) and B)
F) B) and C)

Correct Answer

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What are the source document output(s) of the Production Scheduling process?


A) Bill of materials, operations list
B) Production plan
C) Production schedule, production orders, material requisitions, move tickets
D) Production reports, job time tickets

E) A) and B)
F) A) and C)

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Choose from the following selections the best definition of a production plan.


A) A document that specifies the components of a product, including descriptions and quantities of required raw materials and parts
B) A document that provides a sequence of production events
C) A document that provides a long-term outline of what and when products will be manufactured
D) A document that provides a short-term allocation of plant machinery and resources to the manufacturing of products

E) A) and C)
F) All of the above

Correct Answer

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A digital factory that is connected, networked, and fully integrated creates opportunities to minimize costs of downtime and underperformance in production and to enable the best output from factory assets and employees. What is an advantage that companies see by using digital manufacturing?


A) Using a digital twin for a product to improve measurement and manufacturing accuracy.
B) A digital factory requires securing every network, cloud platform, operating system, and application across its supply chain and production network.
C) Employees might be resistant to change if they fear losing their jobs.
D) Leadership support plays an essential role in the success of an initiative.

E) B) and C)
F) B) and D)

Correct Answer

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What are the source document output(s) of the Production Planning process?


A) Bill of materials, operations list
B) Production plan
C) Production schedule, production orders, material requisitions, move tickets
D) Production reports, job time tickets

E) All of the above
F) A) and D)

Correct Answer

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The manufacturing conversion and supply chain management processes involve 11 ERP features from the Financial, Production, and Supply Chain Management modules. Which of the following modules is part of the manufacturing conversion and supply chain management processes?


A) Human resources management
B) Customer relationship management
C) Supply chain management
D) Sales management

E) A) and C)
F) None of the above

Correct Answer

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Choose from the following selections the best definition of the Production Planning process.


A) Transform product ideas into product specifications
B) Develop a long-term outlook of production activities
C) Schedule production
D) Manufacture the products

E) A) and B)
F) A) and C)

Correct Answer

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For accounting purposes, the insurance on the manufacturing facility would be classified as what?


A) Manufacturing overhead
B) Indirect factory labor
C) Direct material costs
D) Indirect material costs

E) A) and B)
F) None of the above

Correct Answer

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A digital factory that is connected, networked, and fully integrated creates opportunities to minimize costs of downtime and underperformance in production and to enable the best output from factory assets and employees. What is a challenge that companies face when using digital manufacturing?


A) Eliminating manufacturing traffic jams
B) Leadership support plays an essential role in the success of an initiative.
C) Maintaining machinery and equipment using proactive real-time monitoring with a predictive maintenance model
D) Decreasing manufacturing cycle times, which is the time required to produce an order

E) C) and D)
F) B) and D)

Correct Answer

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Resources like ________ and ________ are combined and converted into a product that can be purchased and used.


A) raw materials, labor
B) finished goods, labor
C) raw materials, equipment
D) equipment, labor

E) A) and D)
F) A) and C)

Correct Answer

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What is one of the key tables that store data needed in the manufacturing conversion process?


A) Sales
B) Vendor
C) Employee
D) Customer

E) A) and B)
F) A) and C)

Correct Answer

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Production reports range from source documents to key metrics. Which is the best description of production volume by machinery?


A) The total number of orders that have been filled or remain outstanding within a period of time
B) Summary of volume produced by machine type
C) Summary of machine downtime, including reasons for the downtime
D) Summary of customer-returned items, including reasons for the returns

E) B) and D)
F) None of the above

Correct Answer

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