70) The document which gives authorization to the production department to manufacture a product is a
A) production order.
B) materials requisition.
C) purchase order.
D) sales forecast.
71) The source for the item and quantity information shown on a materials requisition is the
A) bill of lading.
B) bill of materials.
C) inventory status report.
D) factor availability report.
72) The department that receives copies of materials requisitions from both the inventory control function and the production department is
C) accounts payable.
73) The document used by the cost accounting function to establish a WIP record for each job is the
A) sales forecast.
B) production order.
C) materials requisition.
D) job time card.
74) Which document is not updated when a manufacturing order is complete and goods are transferred to stores?
A) Production order
B) WIP record
C) Finished goods inventory records
D) Materials requisition
75) The general formula for calculating the inventory reorder point is
A) average inventory usage rate multiplied by lead time.
B) economic order quantity less average inventory usage rate.
C) lead time multiplied by economic order quantity.
D) lead time multiplied by average inventory turnover rate.
76) A manufacturing company wants to know the optimal amount to order of part number 45612. It should gather appropriate inventory information about the part and then calculate the part's
A) inventory usage rate.
B) lead time.
C) economic order quantity.
D) reorder point.
77) Calculation of the reorder point requires knowledge of
A) the economic order quantity multiplied by the average usage rate.
B) the time from the issuance of a purchase order until the order is received.
C) the average time from the issuance of a purchase order until the economic order quantity occurs.
D) the minimum inventory usage rate.
78) Which is the best way for a company to prevent having outdated inventory on hand?
A) Store inventory securely
B) Classify inventory according to location in the company's records
C) Evaluate inventory turnover
D) Write down the inventory balance when a warehouse employee finds outdated inventory
79) Which of the following is not a concern regarding the storage and handling of inventory items?
A) Price paid per unit
B) Protection against damage or spoilage
C) Avoidance of obsolescence
D) Security against embezzlement