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Free IIA IIA-CIA-Part3 Exam Braindumps (page: 34)

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PDF with 1555 Questions

Under throughput costing, the only cost considered to be truly variable in the short run is:

  1. Direct materials.
  2. Direct labor.
  3. Manufacturing overhead.
  4. All manufacturing costs are considered variable.

Answer(s): D

Explanation:

Throughput costing, also called super variable costing, recognizes only direct materials costs as being truly variable and thus relevant to the calculation of throughput margin.



The immediate goal of a theory of constraints (TOC) analysis is to:

  1. Maximize the efficiency of the entire production process.
  2. Minimize direct materials cost.
  3. Maximize contribution margin through the constraint.
  4. Smooth production flow to eliminate backup in the system.

Answer(s): C

Explanation:

A basic principle of TOC analysis is that short-term profit maximization requires maximizing the contribution margin through the constraint, called the throughput margin or throughput contribution.



In a theory of constraints (TOC) analysis, the bottleneck operation (the constraint) corresponds to which part of the drum-buffer-rope model?

  1. Drum.
  2. Buffer.
  3. Rope.
  4. No part of TOC analysis corresponds to the drum-buffer-rope model.

Answer(s): B

Explanation:

Production flow through a constraint is managed using the drum-buffer-rope (DBR) system. The drum (i.e., the beat to which a production process marches) is the bottleneck operation. The constraint sets the pace for the entire process. The buffer is a minimal amount of work-in-process input to the drum that is maintained to ensure that it is always in operation. The rope is the sequence of activities preceding and including the bottleneck operation that must be coordinated to avoid inventory buildup.



The process model used in a theory of constraints (TOC) analysis is called:

  1. Just-in-time.
  2. Drum-buffer-rope.
  3. Materials requirements planning.
  4. Lean production.

Answer(s): B

Explanation:

Production flow through a constraint is managed using the drum-buffer-rope (DBR) system. The drum (i.e.. the beat to which a production process marches) is the bottleneck operation. The constraint sets the pace for the entire process. The buffer is a minimal amount of work-in-process input to the drum that is maintained to ensure that it is always in operation. The rope is the sequence of activities preceding and including the bottleneck operation that must be coordinated to avoid inventory buildup.



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