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10 Unrecorded Inventory - Started Submitted Timespent...

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10 Unrecorded Inventory Started: July 3, 2010 5:39 PM Submitted: July 3, 2010 5:50 PM Time spent: 00:11:42  Total score: 207.144/236 = 87.7729%   1-12 Costs 1. Sunk cost ID (no calc)
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(CMA/CFM examination) A sunk cost is a cost    Stud ent  Res pons e Valu e Corr ect  Ans wer Feed back A.  com mon  to all  alter nativ es in  ques tion  and  not  clearl y or  pract ically  alloc able  to  any  of  the  alter nativ
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2. MorMac relevant costs example problem
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MorMac inventory varies during the year. During a high activity month of 160 orders, salary of  the receiving clerk in the warehouse was $2,400. During a low activity month of 100 orders, it  was $2,000. What is the relevant cost and by what percentage did it change? Respectively  nearest    Stud ent  Resp onse Valu e Corr ect  Ans wer Feed back A.  60  and  60%      B.  20%  and  $400      C. 
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3. Irrelevant cost (no calc)
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(CMA/CFM modified) Which one of the following items is irrelevant for a company attempting to  minimize the cost of a stockout?    Stud ent  Resp onse Valu e Corr ect  Ans wer Feed back A.  Stora ge  cost  of  inven tory      B.  Prob ability  of  being  out of  stock   
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4. Not a holding cost
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(CMA/CFM modified) Which one of the following items is not included in the annual holding  costs of inventory?    Stud ent  Res pons e Valu e Corr ect  Ans wer Feed back A.  Insur ance  on  inven tory      B.  Taxe s on  inven tory     
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5. Terminology
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Match the term with its correct definition in the drop-down box.  Statement Response Value  Correct Match Expected  opportunity cost  of a stockout  Amount of profit  forgone and the  probability of its  occurrence 14.28%  Amount of profit  forgone and the  probability of its  occurrence Total cost of  inventory control  Sum of order  cost per order  and number of  orders plus  holding costs per  item and  average balance 14.28%  Sum of order  cost per order  and number of  orders plus  holding costs per  item and  average balance
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6. Thurston per-order cost with inflation
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Thurston Company is a regional distributor of automobile window glass. With the introduction  of new hybrid models and the expected high level of consumer demand, management  recognizes a need to determine the total inventory cost associated with maintaining an optimal  supply of replacement windshields.  Thurston is expecting a daily demand for 36 windshields. The purchase price of each  windshield is $50. Historical ordering costs incurred in the purchasing department for placing  and processing orders are as follows: Year Orders Placed Total 20x7 20 $12,300 20x8 55 $12,475 20x9 100 $12,700 The working capital manager expects ordering costs to  increase 16 percent over the cost suggested by the values in the table.
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7. Thurston per order cost inflation (table)
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Thurston Company is a regional distributor of automobile window glass. With the introduction 
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