Q&A Hero

Q: Ignatio applied for a loan for his business that he will repay in 9 months. The best way to describe this loan is as a(n): a. account payable. b. accrued expense. c. short-term note. d. long-tern debt.

Q: One fundamental difference between a process chart and a flowchart is that: A) the process chart adds a time dimension to the horizontal axis, while a flowchart is not time-oriented. B) the process chart includes the supply chain, while the flowchart stays within an organization. C) the process chart is more like a table, while the flowchart is more like a schematic diagram. D) the process chart focuses on the customer and on the provider's interaction with the customer, while the flowchart does not deal directly with the customer. E) None of these is true, because a process chart and a flowchart are the same thing.

Q: The cash flow activities on the cash flow statement are divided into these categories: a. cash from operations, buying or selling assets, and financing the business. b. payments on accounts receivable, payments on accounts payable, and changes in owners equity. c. cash from sales, cash from accounts receivable, and payments on accounts payable. d. payment on debt, cash from sales, and increases to owners equity.

Q: Value-stream mapping: A) is a variation of time-function mapping. B) examines the supply chain to determine where value is added. C) extends time function mapping back to the supplier. D) starts with the customer and works backwards. E) All of the above are true.

Q: Regina wants to open her own coffee stand. To do that she will need equipment and supplies. The two methods Regina can use to pay for these items are: a. cash flow and balance sheets. b. accounts receivable and accounts payable. c. assets and liabilities d. debt and equity.

Q: Flowcharts use distance, but not time, to show the movement of material, product, or people through a process.

Q: Jasper bought some new equipment for his business. Six months later he wants to know whether this was a good idea. To do that, he can calculate the: a. current ratio. b. operatimg profit margin. c. total asset turnover. d. return on assets.

Q: Time-function mapping is a flowchart with time added to the horizontal axis.

Q: Candace purchased a car for her companys exclusive use. The value of this car: a. is constant over time. b. increases with each use of the asset. c. decreases over time. d. increases over time.

Q: A flowchart with the addition of a time axis becomes a process chart.

Q: Activity times should not be included in a service blueprint.

Q: Stephanie ordered merchandise from one of her vendors but she doesnt have to pay for it right away. The amount of this purchase will increase Stephanies: a. accounts receivable b. assets c. balance sheet d. accounts payable

Q: Service blueprinting is a process analysis technique that focuses on the customer and the provider's interaction with the customer.

Q: Natalya reports profits when cash is received and expenses when they are paid. She is using a. a cash flow statement. b. accural-basis accounting. c. cash-basis accounting. d. liquid assets.

Q: A value-stream map includes both (1) inventory quantities, and (2) symbols for customers and suppliers.

Q: Coronado cannot use the income statement as a measure of cash flows because it is calculated on a(n) _______ rather than a(n) _______ basis. a. annual; cash b. annual; accrual c. accrual; cash d. cash; accrual

Q: Why do modern operations managers look for flexibility in their equipment?

Q: Kermit calculated his total asset turnover to be 1.13. This tells Kermit that: a. every dollar of assets generates $1.13 in sales. b. every dollar of sales costs Kermit $1.13 to generate. c. every year he turns his inventory 1.13 times. d. every dollar of assets generates $1.13 in profits.

Q: ________ involves the ability to respond with little penalty in time, cost, or customer value.

Q: Richard has in his warehouse some raw materials and finished goods that he has ready to fill customer orders. These are two types of _____. a. accounts payable. b. accounts receivable. c. cost of goods. d. inventories.

Q: Which of the following is true regarding the concept of flexibility? A) It is the ability to respond with little penalty in time, cost, or customer value. B) It may be accomplished with digitally controlled equipment. C) It may involve modular or movable equipment. D) All of the above are true. E) None of the above is true.

Q: To calculate his companys _______________, Edgar will subtract operating expenses from gross profits. a. cost of goods sold b. profits before taxes c. operating income d. retained earnings

Q: What have restaurants such as Steakhouses and Stacked Restaurants replaced their traditional paper menus with? A) spoken descriptions B) singing descriptions C) menus painted on the walls D) index cards containing a picture of each item E) iPad menus

Q: The debts that Rhondas company will repay within the next ______________ are considered to be current debt. a. 2 years b. 6 months c. 1 quarter d. 12 months

Q: When selecting new equipment and technology, decision makers look for flexibilitythe ability to respond with little penalty in time, cost, or customer value.

Q: The owners of ABC, Inc. may expect to be paid a share of the profits of the company. These payments to owners are called: a. return on investment. b. dividends. c. current expenses. d. llong-term debt.

Q: Mary is considering purchasing a machine from one of two suppliers. Supplier A's machine has an annual fixed cost of $10,000 and a unit variable cost of $2.10. Supplier B's machine has an annual fixed cost of $16,000 and a unit variable cost of $3.00. How large should Mary's annual demand be in order to make Supplier B's machine the better choice?

Q: It is important for Heather to monitor her cash flow because: a. if she borrowed money to finance her business, the lenders will want to make sure she used the money wisely. b. her investors will want to make sure they get their money back. c. cash flow is a measure of her success. d. a business can go bankrupt with negative cash flows even though the income statement shows a profit.

Q: The cash flow statement measures cash flows on a. an annual basis. b. an accrual basis. c. a cash basis. d. a normalized basis.

Q: Karla's candle factory is considering two different manufacturing options. Option A is highly automated with fixed costs of $25,000 and variable costs of $.1/candle. Option B uses hand labor with fixed costs of $10,000 and variable costs of $.5/candle. If demand for Karla's candles is 25,000, which option should she pick?

Q: For any business, both the _______ and ________ are needed to determine a firms financial position. a. income statement; balance sheet b. income statement; cash flow c. balance sheet; line of credit d. cash flow; balance sheet

Q: Bridget is considering how to get to work over the summer. She has two options. Option A is to buy a seasonal bus pass for $100. Option B is to pay $.25 for each ride. Identify the fixed and variable costs for each option. If she has to ride both to and from work, how many days of work would it take for the seasonal pass to cost the same amount as Option B?

Q: To determine her companys profits before taxes, Marilyn will have to deduct the firm's interest expense from its ____ income. a. total b. projected c. net d. operating

Q: Kirstin is thinking about opening a Chinese restaurant and needs to buy a rice cooker. Machine A has fixed costs of $100 and variable costs of $1/pound. Machine B has fixed costs of $500 and variable costs of $.1/pound. If Kirstin plans to sell 100 pounds of rice, which machine should she choose? What is the cross-over point?

Q: Horace is reviewing a document that shows the results of his firm's operations over a period of one year. Horace is looking at the: a. income statement b. balance sheet c. statement of cash flow d. statement of financial position

Q: A non-profit organization is planning a raffle to raise money. It has two options for tickets. The first option is to do the tickets by hand, with fixed costs of $50 and variable costs of $.05 per ticket. The second option is to outsource production. This would result in fixed costs of $500 and variable costs of $.01. If the organization plans to sell 10,000 tickets which option should it choose?

Q: For Webster to understand how his company performed during calendar year 2012, he must begin with firms financial position on: a. January 1, 2012. b. July 1, 2013. c. September 30, 2010. d. June 30, 2011.

Q: Brandon's computer shop is considering two different configuration options. The first one is to have each computer built by the sales associates when they have free time. The second option is to hire a dedicated assembly technician. Option A has variable costs of $50 per computer and no fixed costs. Option B has a fixed cost of $1,000 but variable costs of only $5 per computer. What is the cross-over point?

Q: Fatima borrowed money from the bank to expand her business. She plans to repay the loan within 12 months. How is this reflected on the cash flow statement? a. As an increase in owners equity and an increase to cash. b. As an increase to cash. c. As a decrease to cash. d. As an increase to current liabilities.

Q: A product is currently made in a process-focused shop, where fixed costs are $8,000 per year and variable cost is $40 per unit. The firm currently sells 200 units of the product at $200 per unit. A manager is considering a repetitive focus to lower costs (and lower prices, thus raising demand). The costs of this proposed shop are fixed costs = $24,000 per year and variable cost = $10 per unit. If a price of $80 will allow 400 units to be sold, what profit (or loss) can this proposed new process expect? Do you anticipate that the manager will want to change the process? Explain.

Q: Walter knows the result of the equation Sales-Expenses = Profits can be found on the: a. cash flow b. income statement c. retained earnings d. balance sheet

Q: An organization is considering three process configuration options. There are two different intermittent processes, as well as a repetitive focus. The smaller intermittent process has fixed costs of $3,000 per month and variable costs of $10 per unit. The larger intermittent process has fixed costs of $12,000 per month and variable costs of $2 per unit. A repetitive focus plant has fixed costs of $50,000 per month and variable costs of $1 per unit. a. If the company produced 20,000 units, what would be its cost under each of the three choices? b. Which process offers the lowest cost to produce 40,000 units? What is that cost?

Q: Total assets less short-term debt equals ownership equity. a. True b. False Indicate the answer choice that best completes the statement or answers the question.

Q: A firm is about to undertake the manufacture of a product, and it is weighing the process configuration options. There are two intermittent processes under consideration, as well as a repetitive focus. The smaller intermittent process has fixed costs of $3,000 per month and variable costs of $10 per unit. The larger intermittent process has fixed costs of $12,000 per month and variable costs of $2 per unit. A repetitive focus plant has fixed costs of $50,000 per month and variable costs of $1 per unit. a. At what output does the large intermittent process become cheaper than the small one? b. At what output does the repetitive process become cheaper than the larger intermittent process?

Q: Depreciation is the cost of a firms land and building allocated over its useful life. a. True b. False

Q: The local convenience store makes personal pan pizzas. Currently, its process makes complete pizzas, fully cooked, for the customer. This process has a fixed cost of $20,000, and a variable cost of $1.75 per pizza. The owner is considering a different process that can make pizzas in two ways: completely cooked (as before), or partially cooked and then flash frozen for the customer to finish heating at home. This alternate process has a fixed cost of $24,000, but a lower variable cost (because much less energy is used in baking) of $1.25 per pizza. a. What is the crossover point between the existing process and the proposed process? b. If the owner expects to sell 9,000 pizzas, should he get the new oven?

Q: Liquidity represents the degree to which a firm can meet maturing short-term debt obligations with available working capital. a. True b. False

Q: Big John's Manufacturing currently produces its lead product on a machine that has a variable cost of $0.32 per unit, and fixed costs of $75,000. Big John is considering purchasing a new machine that would drop the variable cost to $.28 per unit, but has fixed costs of $150,000. What is the cross-over point between the two machines?

Q: To determine the debt ratio, the total debt is divided by the total income. a. True b. False

Q: A product is currently made in a process-focused shop, where fixed costs are $9,000 per year and variable costs are $50 per unit. The firm is considering a fundamental shift in process, to repetitive manufacturing. The new process would have fixed costs of $90,000, and variable costs of $5. What is the crossover point for these processes? For what range of outputs is each process appropriate?

Q: The balance sheet shows a firm's assets, liabilities, and owners' equity at a specific point in time. a. True b. False

Q: In an affluent society, how do we produce a wide number of options for products at low cost? Hint: Focus on how to address some of the major challenges of mass customization.

Q: The terms earnings, profits and income refer to different amounts on the income statement. a. True b. False

Q: Identify the four basic process strategies, and describe them in a complete sentence or two each.

Q: Jane is determining the overall financial situation for her business. Since she has to report to a group of investors, she should just give them the income statement. a. True b. False

Q: What is mass customization?

Q: If 1 million passengers pass through the St. LouisAirport with checked baggage each month, a successful Six Sigma program for baggage handling would result in how many passengers with misplaced luggage? A) 3.4 B) 6.0 C) 34 D) 2700 E) 6 times the monthly standard deviation of passengers

Q: Profits reward owners for investing in a company, but they do little to promote future growth. a. True b. False

Q: Dividends to a firms owners are not considered an expense in the income statement. a. True b. False

Q: One of Britain's largest children's hospitals working with Ferrari Racing is an example of: A) internal benchmarking. B) external benchmarking. C) Taguchi concepts. D) employee empowerment. E) corporate responsibility.

Q: Accounts payable, accrued expenses, 2-year notes payable, and 90-day notes are all short-term liabilities. a. True b. False

Q: A hospital benchmarked against Ferrari Racing in an effort to: A) improve patient handoff quality. B) increase surgery prep time. C) lengthen surgery duration. D) reduce the number of doctors. E) all of the above

Q: A Six Sigma program has how many defects per million? A) 3.4 B) 34 C) 1000 D) 6 times the standard deviation E) 2700

Q: The major difference between cash-basis accounting and accrual-basis accounting is when the firm recognizes revenue and profits. a. True b. False

Q: The best financial ratio to determine a companys ability to pay debt is the operating profit margin. a. True b. False

Q: A Three Sigma program has how many defects per million? A) 34 B) 3 C) 3 times the standard deviation D) 2700 E) 1500

Q: A new business needs to manage cash flows carefully because if a firm runs out of cash, it is out of business. a. True b. False

Q: PDCA is most often applied with regard to which aspect of TQM? A) Six Sigma B) employee empowerment C) continuous improvement D) benchmarking E) JIT

Q: The income statement answers the question: "How profitable is the business?" a. True b. False

Q: PDCA, developed by Shewhart, stands for which of the following? A) Plan-Do-Check-Act B) Plan-Develop-Check-Accept C) Problem-Develop Solution-Check-Act D) Problem-Do-Continue-Act E) Prepare-Develop-Create-Assess

Q: Accounts receivable consist of payments due from a firm to its suppliers. a. True b. False

Q: Based on his 14 Points, Deming is a strong proponent of: A) inspection at the end of the production process. B) an increase in numerical quotas to boost productivity. C) looking for the cheapest supplier. D) training and knowledge. E) all of the above.

Q: The cash flow statement answers the questions From where did the cash come? and Where did the cash go? a. True b. False

Q: The philosophy of zero defects is: A) the result of Deming's research. B) unrealistic. C) prohibitively costly. D) an ultimate goal; in practice, 1 to 2% defects is acceptable. E) consistent with the commitment to continuous improvement.

Q: While increasing debt levels can increase the owners return on equity, it also reduces risk. a. True b. False

Q: The quality loss function indicates that costs related to poor quality are low as long as the product is within acceptable specification limits.

Q: The three activities that explain the cash inflows and outflows of a business are the operating, selling, and financing activities. a. True b. False

Q: One of the ways that just-in-time (or JIT) influences quality is that by reducing inventory, bad quality is exposed.

Q: Line employees need the knowledge of TQM tools.

Q: Net income is used to measure the return on the firms total assets. a. True b. False