Operations Management: Planning Techniques Flashcards - CPA Business Environment and Concepts (BEC)

Question

The management of a company would do which of the following to compare and contrast its financial information to published information reflecting optimal amounts?

Answer

Benchmarking is the process of comparing and contrasting financial information.

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Question

What is the process by which products and services of a business entity are measured and evaluated relative to the best possible levels of performance?

Answer

Measuring and evaluating relative to levels of performance is a prime example for benchmarking.

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Question

Which of the following is a financial measure of success in a balanced scorecard?

Answer

The balanced scorecard can be benchmarked for success by a firm's sales growth metric.

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Question

Which of the following would be most impacted by the use of the percentage of sales forecasting method for budgeting purposes?

Answer

Of the items listed, A/P would be most impacted by the use of the percentage of sales forecasting method for budgeting purposes.

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Question

Which of the following ratios is appropriate for the evaluation of accounts receivable?

Answer

Among the ratios listed, the ratio that is appropriate for the evaluation of accounts receivable is the number of days sales are outstanding.

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Question

Of the following success factors in a balanced scorecard, which focuses on the retention of key employees?

Answer

Through the advancement of innovation and the learning and growth of employees, a firm can strive toward retaining key employees which is beneficial for future success.

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Question

Given that demand exceeds capacity, that there is no spoilage or waste, and that there is full utilization of a constant number of assembly hours, the number of components needed for an assembly operation with an 80% learning curve should (1) Increase for successive periods (2) Decrease per unit of output

Answer

The learning curve relates to the efficiency with which productive resources, typically labor, are employed and it suggests that productivity will increase over time.

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Question

In a regression analysis, the coefficient of determination measures:

Answer

The coefficient of determination measures the proportion of the total variation in the dependent variable explained by the independent variable.

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Question

Multiple regression differs from simple regression in that it:

Answer

This analysis is an expansion of simple regression because it allows consideration of more than one independent variable.

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Question

Which of the following labor costs for a manufacturing company is deducted from revenues in order to determine gross margin but is not deducted from revenues to determine contribution margin?

Answer

The manufacturing floor manager's salary is considered fixed factory overhead and is a part of the gross margin calculation but not part of the contribution margin calculation.

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Question

What is a company's margin of safety if it has sales of $200,000, a contribution margin of $120,000, fixed costs of $90,000, and income taxes of $12,000?

Answer

$90,000/($120,000/$200,000) = $150,000. $200,000 - $150,000 = $50,000.

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Question

Sales forecasts are formed considering all of the following factors except:

Answer

Sunk costs should not be considered as there is no recuperating them and they do not play a role in forecasts at all.

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Question

Probability (risk) analysis is:

Answer

Probability analysis is an extension of sensitivity analysis.

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Question

Which of the following factors is inherent in a firm's operations if it utilizes only equity financing?

Answer

Business risk represents the risk associated with the unique circumstances of a particular company, as they might affect the shareholder value of that company.

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Question

If an investor's certainty equivalent is greater than the expected value of an investment alternative, the investor is said to be:

Answer

If an investor's certainty equivalent is greater than the expected value of an investment alternative, the investor is said to be risk seeking.

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Question

The mission and vision of an organization most closely relate with its:

Answer

Mission and vision are keywords associated with a firm's strategy.

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Question

The performance component of COSO's ERM framework is supported by which of the following principles?

Answer

Identifies risk is included under the umbrella of performance.

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Question

Proper risk management includes all of the following except:

Answer

While choosing to compensate workers additionally is a good faith action, it does not assist in proper risk management.

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Operations Management: Planning Techniques - CPA Business Environment and Concepts (BEC)

The management of a company would do which of the following to compare and contrast its financial information to published information reflecting optimal amounts?

Benchmarking is the process of comparing and contrasting financial information.

What is the process by which products and services of a business entity are measured and evaluated relative to the best possible levels of performance?

Measuring and evaluating relative to levels of performance is a prime example for benchmarking.

Which of the following is a financial measure of success in a balanced scorecard?

The balanced scorecard can be benchmarked for success by a firm's sales growth metric.

Which of the following would be most impacted by the use of the percentage of sales forecasting method for budgeting purposes?

Of the items listed, A/P would be most impacted by the use of the percentage of sales forecasting method for budgeting purposes.

Which of the following ratios is appropriate for the evaluation of accounts receivable?

Among the ratios listed, the ratio that is appropriate for the evaluation of accounts receivable is the number of days sales are outstanding.

Of the following success factors in a balanced scorecard, which focuses on the retention of key employees?

Through the advancement of innovation and the learning and growth of employees, a firm can strive toward retaining key employees which is beneficial for future success.

The learning curve relates to the efficiency with which productive resources, typically labor, are employed and it suggests that productivity will increase over time.

In a regression analysis, the coefficient of determination measures:

The coefficient of determination measures the proportion of the total variation in the dependent variable explained by the independent variable.

Multiple regression differs from simple regression in that it:

This analysis is an expansion of simple regression because it allows consideration of more than one independent variable.

Which of the following labor costs for a manufacturing company is deducted from revenues in order to determine gross margin but is not deducted from revenues to determine contribution margin?

The manufacturing floor manager's salary is considered fixed factory overhead and is a part of the gross margin calculation but not part of the contribution margin calculation.

What is a company's margin of safety if it has sales of $200,000, a contribution margin of $120,000, fixed costs of $90,000, and income taxes of $12,000?

$90,000/($120,000/$200,000) = $150,000. $200,000 - $150,000 = $50,000.

Sales forecasts are formed considering all of the following factors except:

Sunk costs should not be considered as there is no recuperating them and they do not play a role in forecasts at all.

Probability (risk) analysis is:

Probability analysis is an extension of sensitivity analysis.

Which of the following factors is inherent in a firm's operations if it utilizes only equity financing?

Business risk represents the risk associated with the unique circumstances of a particular company, as they might affect the shareholder value of that company.

If an investor's certainty equivalent is greater than the expected value of an investment alternative, the investor is said to be:

If an investor's certainty equivalent is greater than the expected value of an investment alternative, the investor is said to be risk seeking.

The mission and vision of an organization most closely relate with its:

Mission and vision are keywords associated with a firm's strategy.

The performance component of COSO's ERM framework is supported by which of the following principles?

Identifies risk is included under the umbrella of performance.

Proper risk management includes all of the following except:

While choosing to compensate workers additionally is a good faith action, it does not assist in proper risk management.