CPA Business Environment and Concepts (BEC) : Operations Management: Planning Techniques

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Example Questions

Example Question #1 : Operations Management: Planning Techniques

The management of a company would do which of the following to compare and contrast its financial information to published information reflecting optimal amounts?

Possible Answers:

Forecast

Budget

Utilize best practices

Benchmark

Correct answer:

Benchmark

Explanation:

Benchmarking is the process of comparing and contrasting financial information.

Example Question #1 : Balance Scorecard And Benchmarking

What is the process by which products and services of a business entity are measured and evaluated relative to the best possible levels of performance?

Possible Answers:

Measuring the performance gap

Variance management

Benchmarking

Standard measurement

Correct answer:

Benchmarking

Explanation:

Measuring and evaluating relative to levels of performance is a prime example for benchmarking.

Example Question #2 : Operations Management: Planning Techniques

Which of the following is a financial measure of success in a balanced scorecard?

Possible Answers:

Staff morale

Market share

Cycle time

Sales growth

Correct answer:

Sales growth

Explanation:

The balanced scorecard can be benchmarked for success by a firm's sales growth metric.

Example Question #3 : Operations Management: Planning Techniques

Which of the following would be most impacted by the use of the percentage of sales forecasting method for budgeting purposes?

Possible Answers:

Accounts payable

Bonds payable

Mortgages payable

Common stock

Correct answer:

Accounts payable

Explanation:

Of the items listed, A/P would be most impacted by the use of the percentage of sales forecasting method for budgeting purposes.

Example Question #4 : Operations Management: Planning Techniques

Which of the following ratios is appropriate for the evaluation of accounts receivable?

Possible Answers:

Days sales outstanding

Return on assets

Current ratio

Collection to debt ratio

Correct answer:

Days sales outstanding

Explanation:

Among the ratios listed, the ratio that is appropriate for the evaluation of accounts receivable is the number of days sales are outstanding.

Example Question #1 : Balance Scorecard And Benchmarking

Of the following success factors in a balanced scorecard, which focuses on the retention of key employees?

Possible Answers:

Financial

Customer satisfaction

Advancement of innovation and human resource development

Internal business processes

Correct answer:

Advancement of innovation and human resource development

Explanation:

Through the advancement of innovation and the learning and growth of employees, a firm can strive toward retaining key employees which is beneficial for future success.

Example Question #1 : Learning Curve

Given that demand exceeds capacity, that there is no spoilage or waste, and that there is full utilization of a constant number of assembly hours, the number of components needed for an assembly operation with an 80% learning curve should (1) Increase for successive periods (2) Decrease per unit of output

Possible Answers:

1

2

Both 1 and 2

Neither

Correct answer:

1

Explanation:

The learning curve relates to the efficiency with which productive resources, typically labor, are employed and it suggests that productivity will increase over time.

Example Question #6 : Operations Management: Planning Techniques

In a regression analysis, the coefficient of determination measures:

Possible Answers:

Goodness of fit

Economic plausibility

Independence of residuals

Independence of variables

Correct answer:

Goodness of fit

Explanation:

The coefficient of determination measures the proportion of the total variation in the dependent variable explained by the independent variable.

Example Question #7 : Operations Management: Planning Techniques

Multiple regression differs from simple regression in that it:

Possible Answers:

Has more independent variables

Allows the computation of the coefficient of determination

Provides an estimated constant term

Has more dependent variables

Correct answer:

Has more independent variables

Explanation:

This analysis is an expansion of simple regression because it allows consideration of more than one independent variable.

Example Question #2 : Learning Curve

Which of the following labor costs for a manufacturing company is deducted from revenues in order to determine gross margin but is not deducted from revenues to determine contribution margin?

Possible Answers:

Salesperson's commissions

Hourly assembly worker's wages

Office manager's salary

Manufacturing floor manager's salary

Correct answer:

Manufacturing floor manager's salary

Explanation:

The manufacturing floor manager's salary is considered fixed factory overhead and is a part of the gross margin calculation but not part of the contribution margin calculation.

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