Answer the Following Questions Using the Information Below

question 32

Multiple Choice

Answer the following questions using the information below:
Tri-State Manufacturing expects to spend $800,000 in 2012 in appraisal costs if it does not change its incoming materials inspection method. If it decides to implement a new receiving method, it will save $80,000 in fixed appraisal costs and variable costs of $0.40 per unit of finished product. The new method involves $120,000 in training costs and an additional $160,000 in annual equipment rental. It takes two units of material for each finished product.
Internal failure costs average $160 per failed unit of finished goods. During 2011, 5% of all completed items had to be reworked. External failure costs average $400 per failed unit. The company's average external failures are 1% of units sold. The company carries no ending inventories, because all jobs are on a per order basis and a just-in-time inventory ordering method is used.
-Any factor where a change in the factor causes a change in the speed with which an activity is undertaken is referred to as:

• A)a time driver
• B)a bottleneck
• C)manufacturing lead time
• D)customer-response time

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Definitions:

Adjusted Cash Balance

The cash amount shown in a company's bank statement, adjusted for deposits in transit, outstanding checks, and bank errors.

Check Register

A personal record book or a digital log used to track checks written, deposits made, and current balance of a checking account.

Bank Statement

A document or electronic file provided by a bank summarizing transactions in an account over a certain period.

Outstanding Deposit

Refers to funds that have been deposited in a bank account but have not yet been credited or made available for use.