Inventory Management – Financial and Strategic Management MCQBy CACSMockTest / November 25, 2022 0 Inventory Management – Financial and Strategic Management MCQ 1 / 35 : The following information is given for receipts and issues of material in the month of March 2019.What are the value of closing stock under the FIFO and LIFO methods? (A) 800 and 900 (B) 900 and 800 (C) 1,000 and 900 (D) 900 and 1000 2 / 35 Smoke, dust, gases, and loss of weight due to seasoning are examples of (A) Scrap (B) Spoilage (C) Defectives (D) Waste 3 / 35 Which of the following is the objective of inventory management? (A) To ensure timely delivery of inventory for production (B) To avoid under or overproduction (C) To maintain investment in inventories at the lowest level (D) All of the above 4 / 35 During the time of inflation, which method of pricing of material issues leads to higher material costs for a job? (A) First in first out method (B) Last in first out method (C) Highest in first out method (D) Standard pricing method 5 / 35 ___ method of pricing of material issues is not popular as it always undervalues the stock and leads to the creation of the secret reserve. (A) Weighted Average Price (B) Base Stock (C) Highest in First Out (D) Standard Price 6 / 35 If annual total carrying cost, per unit carrying cost, and cost per order is 7 15,000, 7 10 & 7 150 respectively, then Economic Order Quantity will be: (A) 1,500 units (B) 3,000 units (C) 100 units (D) 200 units 7 / 35 : In the technique of inventory control, quantities in the hand of each item or class of stock are reviewed periodically say 30, 45, or 60 days. (A) ABC Analysis (B) Two-bin System (C) Order Cycling System (D) Perpetual Inventory System 8 / 35 If EOQ is 200 units, ordering cost is ₹ 20per order and total purchases are 4,000 units. The carrying cost per unit will be: (A) ₹ 4 (B) ₹ 6 (C) ₹ 8 (D) ₹ 2 9 / 35 ___is a value-based system of inventory control, in which materials are analyzed according to their value so that costly and more valuable materials are given greater attention. (A) MAX-MIN plan (B) Review of slow and non-moving items (C) ABC Analysis (D) Order cycling system 10 / 35 Which of the following is not a cost price method of pricing material issues? (A) First-in-first-out (FIFO) method (B) Last-in-first-out (LIFO) method (C) Standard price method (D) Specified price method 11 / 35 The most suitable inventory control technique for spare parts is: (A) ABC analysis (B) VED analysis (C) JIT analysis (D) Control ratios 12 / 35 A Ltd. submits the following data:Normal uses (unit per week): 50Minimum usage (unit per week): 25Maximum usage (unit per week): 75Re-order period (weeks): 4-6 Calculate re-order level. (A) 100 units (B) 200 units (C) 150 units (D) 450 units 13 / 35 : The rate per kg of material P, Q, R & S are respectively ₹ 12,₹ 15,₹ 18 & ₹ 21. The input-output ratios of the material are 140%, 130%, 120% & 110% respectively. The most economical material for production is: (A) P (B) Q (C) R (D) S 14 / 35 This type of loss is connected with both input and output: (A) Waste (B) Scarp (C) Defectives (D) All of the above 15 / 35 Which of the following does not normally appear on a material requisition form? (A) Job number (B) Unit cost (C) Supplier’s name (D) Quantity requisitioned 16 / 35 When prices fluctuate widely, which of the following method will even out the effect of fluctuations? (A) Weighted average (B) FIFO (C) LIFO (D) Simple average 17 / 35 A, B, C analysis is (A) a system of profit planning (B) a technique of financial analysis (C) a technique of inventory control (D) a technique of profit determination 18 / 35 : Which of the following is considered as normal loss of material (A) Pilferage (B) Loss due to flood (C) Loss due to accident (D) Loss arising from careless handling of material 19 / 35 Amaze Ltd. had an opening inventory of 5,000 units costing ₹ 5 per unit on 1st April 2016. Following receipts and issues took place in April 2016:5th April 2016: Purchased 800 units @ ₹ 8 per unit12th April 2016: Purchased 200 units @ ₹ 8 per unit15th April 2016: Issued 3,000 units25th April 2016: Purchased 1,000 units @ ₹ 9 per unitCost of inventory as of 30th April 2016 under weighted average basis will be: (A) ₹ 25,500 (B) ₹ 27,000 (C) ₹ 20,000 (D) ₹ 23,500 20 / 35 A written comprehensive order, with specification, material code, and quantity sent to inform the purchasing department, of a need for material is called (A) Purchase order (B) Bill of material (C) Purchase requisition (D) Bin card 21 / 35 _ account does not record the balance of stores ledger control account. (A) Manufacturing (B) Trading (C) Profit and loss (D) Work-in-progress 22 / 35 Re-order Quantity: 300 kgMinimum usage: 20 kg per dayMinimum lead time: 5 daysMaximum stock level: 400 kgRe-order level will be (A) 350 kg (B) 200 kg (C) 375 kg (D) 150 kg 23 / 35 Normal usage 50 units per week, maximum usage 75 units per week, reorder period 4 to 6 weeks. The minimum level of stock will be (A) 250 Units (B) 150 Units (C) 450 Units (D) 200 Units 24 / 35 In a situation of rising prices, profit and tax liability would be lower under method than under method of material issue pricing. (A) FIFO; LIFO (B) LIFO; FIFO (C) LIFO; Average (D) FIFO; Average 25 / 35 EOQ is 200 units, ordering cost Rs. 20 per order, and total purchases 4,000 units. The carrying cost per unit will be (A) ₹ 2 (B) ₹ 6 (C) ₹ 4 (D) None of the above 26 / 35 About 50 units are required every day for a machine. A fixed cost of ₹ 50 is incurred for placing an order. The inventory carrying cost per unit amounts to ₹ 0.02 per day. The lead period is 32 days. Economic Order Quantity is (A) 200 Units (B) 300 Units (C) 500 Units (D) 100 Units 27 / 35 In a company, the weekly minimum and maximum consumption of Material-A is 25 and 75 units respectively. The re-order quantity as fixed by the company is 300 units. The material is received within 4 to 6 weeks from the issue of supply order. The maximum level of Material-A is (A) 640 Units (B) 650 Units (C) 175 Units (D) 560 Units 28 / 35 Following information is available regarding a product-X:1st January 2015:Opening balance: 50 units @ Rs. 4 Receipts:5th January 2015: 100 units @ Rs. 512th January, 2015: 200 units @ Rs. 5.50 Issues:2nd January 2015: 30 units18th January 2015: 170 unitsThe value of closing stock according to the FIFO method is (A) ₹ 660 (B) ₹ 770 (C) ₹ 825 (D) ₹ 1,100 29 / 35 For a product-X, the following information is available:Maximum consumption per week: 300 unitsNormal consumption per week: 200 unitsRe-order period: 2 to 4 weeksThe re-order level will be (A) 400 units (B) 200 units (C) 600 units (D) 800 units 30 / 35 Bill of material acts as an authorization to the store’s department in procuring the material and all the materials listed on the bill is sent to the. (A) Sales department (B) The Production department (C) Accounts department (D) Stores department 31 / 35 : Under which of the following inventory control techniques, two piles or bundles are maintained for each item of stock (A) Min-max plan (B) Order cycling system (C) Two-bin system (D) ABC analysis 32 / 35 Dec 2014: Under which of the following inventory control technique, the maximum and minimum level of each stock is laid down (A) Min-max plan (B) Two bin system (C) Order cycle system (D) ABC analysis 33 / 35 The method of regular physical verification of material throughout the year is known as (A) Periodic stock taking (B) Bin card system (C) Continuous stock taking (D) Stock ledger system 34 / 35 Which of the following is recorded by bin card (A) Quantity. (B) Quantity and value (C) Value (D) Quality 35 / 35 Which type of material is classified as ‘A’ type in ABC analysis (A) High price, more quantity (B) High price, less quantity (C) Low price, more quantity (D) Low price, less quantity Your score is LinkedIn Facebook Twitter VKontakte Related