IMANET IMANET Certifications IMANET-CMA Questions & Answers

• Question 1241:

  A systematic approach to reaching targeted cost levels during value chain analysis is known as

  A. Value engineering

  B. Life-cycle costing

  C. Process value analysis

  D. Activity analysis.

  Correct Answer: A

  Value engineering is a means of reaching targeted cost levels. It is a systematic approach to assessing all aspects of the value chain cost buildup for a product.

• Question 1242:

  Process value analysis is a key component of activity-based management that links product costing and

  A. Reduction of the number of cost pools.

  B. Continuous improvement

  C. Accumulation of heterogeneous cost pools.

  D. Overhead rates based on broad averages.

  Correct Answer: B

  Design of an ABC system starts with process value analysis, a comprehend sive under standing of how an organization generates its output. It involves a determination of which activities that use resources are value-adding or no value-adding and how the latter may be reduced or eliminated. This linkage of product costing and continuous improvement of pro-esses is activity-based management (ABM). It encompasses driver analysis, activity analysis, and performance measurement.

• Question 1243:

  Benefits of computer-integrated manufacturing (CIM) include all of the following except

  A. Faster response to market changes.

  B. Lower production costs.

  C. Greater oversight by upper management.

  D. Improved product quality.

  Correct Answer: C

  Computer-integrated manufacturing (CIM) provides many benefits, among them improved product quality (less rework), better customer service, faster response to market changes, greater product variety, lower production costs, and shorter product development times. Greater oversight by upper management is debatable as a positive good and it does not apply in CIM in any case.

• Question 1244:

  A manufacturing arrangement characterized by low or no setup times and the ability to switch quickly from producing one product to another is called a

  A. Just-in-time manufacturing system.

  B. Computer-integrated manufacturing system.

  C. Flexible manufacturing system.

  D. Robot.

  Correct Answer: C

  An example of the use of automation and advanced technologies in the manufacturing field is flexible manufacturing, which is the capacity of computer-controlled machinery to perform many different programmed functions. By eliminating machine setup time, strengthening control, and automating handling processes, flexible manufacturing permits the efficient production of small numbers of different products by the same machines. A company can therefore more accurately match output with consumer tastes and avoid long production runs of identical goods.

• Question 1245:

  Increased competition, technological innovation, and a shift from mass production of standardized products to custom prockiced products in many inductees have increased the need for productivity improvement and flexibility of production systems. In response to these demands, organizations have increased their reliance on automation and the use of advanced technologies in their operations. Which other following is an example of the use of automation and advanced technologies?

  A. Flexible manufacturing system (FMS).

  B. Just-in-b me (JIT) system

  C. Master budgeting system (MBS).

  D. Economic order quantity (EOQ).

  Correct Answer: A

  Flexible manufacturing is the capacity of computer-controlled machinery to perform many different programmed functions. By eliminating machine setup time, strengthening control, and automating handling processes, flexible manufacturing permits the efficient production of small numbers of different products by the same machines A company can therefore more accurately match output filth consumer tastes and avoid long production runs of identical goods. A flexible manifesting system consists of two or more computer- controlled machines linked by automated handling devices such as robots and transport systems.

• Question 1246:

  A major justification for investments in computer-integrated manufacturing (CIM) projects is

  A. Reduction in the costs of spoilage, reworked units, and scrap.

  B. Lower book value and depreciation expense for factory equipment.

  C. Increased working capital.

  D. Stabilization of market share.

  Correct Answer: A

  Automating and computerizing production processes requires a substantial investment in fixed assets and an increase in risk because of greater fixed costs. CIM also necessitates an increase in software costs and extensive worker retraining. However, the costs of spoilage, rework, and scrap are reduced along with labor costs. The qualitative advantages of CIM are increased flexi lily, shorter manufacturing lead time, quicker development of new products, better product delivery and service, faster response to market changes1 and improved competitiveness.

• Question 1247:

  United Industries manufactures three products at its highly automated factory. The products are very popular, with demand far exceeding the company's abilitqto supply the marketplace. To maximize profit, management should focus on each product

  A. Gross margin.

  B. Segment margin.

  C. Contribution margin ratio.

  D. Contribution margin per machine hour.

  Correct Answer: D

  When demand far exceeds a company's abilitstto supply the marketplace, management will want to maximize its profits per unit of scarce resource. If the scarce resource is raw materials, the products that provide the greatest contribution margin per unit of raw materials are the products to emphasize. If machine hours are the constraint, profits are machined by emplaning the contribution margin per machine hour.

• Question 1248:

  Three of the basic measurements used by the theory of constraints (TOO) are

  A. Gross margin (or gross profit), return on assets, and total sales.

  B. Number of constraints (or subordinates), number of no constraints, and operating leverage.

  C. Throughput (or throughput contribution), inventory (or investments), and operational expense.

  D. Fixed manufacturing overhead per unit, fixed general overhead per unit, and unit gross margin (or gross profit).

  Correct Answer: C

  Theory of constraints (TOO) analysis describes three basic measurements: throughput contribution (sales -- direct materials), investments (raw materials; work-in-process; finished goods; RandD costs; and property, plant, and equipment), and operating costs (all costs except direct materials).

• Question 1249:

  Antlers1 Inc. produces a single product that sells for $150 per unit. The product is processed through the Cutting and Finishing Departments. Additional data for these departments are as follows: The current production rate is the budgeted rate for the entire year. Direct labor employees earn $20 per hour, and the company has a "no layoff" period in effect. What is the amount of the throughput contribution per unit as computed using the theory of constraints?

  

  A. $90.00

  B. $76.67

  C. $46.67

  D. $26.67

  Correct Answer: A

  Throughput costing, sometimes called super variable costing, recognizes only direct materials costs as being truly variable and thus relevant to the calculation of throughput margin (throughput contribution). All other manufacturing costs are ignored because they are considered fixed in the short turn. For Antlers' single product, the throughput margin is therefore $90 ($150 selling price --$45 direct materials in Cutting --$15 direct materials in Finishing)

• Question 1250:

  Data regarding four different products manufactured by an organization are presented as follows. Direct material and direct labor are readily available from the respective resource markets. However, the manufacturer is limited to a maximum of 3000 machine hours per month.

  

  The product that is the most profitable forth manufacturer in this situation is

  A. Product A.

  B. Product B.

  C. Product C.

  D. Product.D

  Correct Answer: B

  When resources are limited, maximum profits are achieved by maximizing the dollar contribution margin per limited or constraining factor. In this situation, machine hours are the constraining factor. Product B has a contribution margin per machine hour of $28 [4 x ($18--$11)], which is greater than that of Product A [3 x ($15-- $7) = $24], Product C [2 x ($20-- $10) = $20], or Product D [3 x ($25 --$16) = $27].