Here’s 25 MCQs on the topics:
Department functions in a manufacturing business
Business process documents
Risk owners and risk exposure
Stakeholders directly/indirectly involved in business processes
*Solve and check answers, Click link 🖇️ you will get answersheet..you can comment there ✍️ if you have any questions ‼️*
🧠Part A – Department Functions in Manufacturing Business
1. The Production Department in a manufacturing company is primarily responsible for:
A. Marketing goods to customers
B. Producing goods using raw materials and labor
C. Maintaining accounting records
D. Procuring raw materials
✅ Answer: B
Explanation: Production converts inputs into finished goods, ensuring efficiency and quality.
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2. The Procurement Department ensures:
A. Financial reporting accuracy
B. Adequate inventory levels of raw materials
C. Employee welfare
D. After-sales service
✅ Answer: B
Explanation: Procurement handles purchasing of raw materials and supplies required for production.
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3. Which department maintains quality control standards?
A. HR Department
B. Production Department
C. Quality Assurance Department
D. R&D Department
✅ Answer: C
Explanation: QA monitors processes and output to ensure they meet required standards.
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4. The Finance Department mainly handles:
A. Machinery maintenance
B. Budgeting, accounting, and financial planning
C. Sales promotion
D. Product design
✅ Answer: B
Explanation: Finance ensures funds availability, manages cash flow, and prepares financial statements.
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5. The Human Resources Department is responsible for:
A. Planning product launches
B. Hiring, training, and evaluating employees
C. Negotiating with suppliers
D. Cost accounting
✅ Answer: B
Explanation: HR manages workforce recruitment, performance, and compliance with labor laws.
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📜 Part B – Documents & Business Processes
6. A Purchase Requisition is prepared by:
A. Supplier
B. Storekeeper or user department
C. Finance department
D. Customer
✅ Answer: B
Explanation: The user department raises a requisition to request procurement of materials.
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7. A Goods Received Note (GRN) is used to:
A. Approve purchase orders
B. Record goods received from suppliers
C. Record goods issued to production
D. Confirm payment to supplier
✅ Answer: B
Explanation: GRN verifies receipt of goods against the purchase order.
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8. The Production Order document authorizes:
A. Payment to suppliers
B. Commencement of production for a job
C. Dispatch of finished goods
D. Employee payroll
✅ Answer: B
Explanation: Production order triggers manufacturing activities.
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9. The Bill of Materials (BOM) lists:
A. Selling prices of finished goods
B. Components and quantities required to produce one unit
C. Supplier names and prices
D. Employees assigned to production
✅ Answer: B
Explanation: BOM defines the structure and components for each product.
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10. A Job Card is used to record:
A. Worker attendance
B. Work performed, time taken, and materials used for a job
C. Customer complaints
D. Purchase details
✅ Answer: B
Explanation: Job card helps in cost tracking for each job or batch.
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⚖️ Part C – Risk Owners and Risk Exposure
11. A Risk Owner is:
A. The person responsible for detecting fraud
B. The individual responsible for managing a specific risk
C. The external auditor
D. The Board of Directors
✅ Answer: B
Explanation: Risk owner ensures proper risk mitigation measures are in place.
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12. Risk Exposure refers to:
A. The total revenue of a firm
B. The potential impact and likelihood of a risk event
C. The cost of control measures
D. Employee turnover rate
✅ Answer: B
Explanation: Exposure = Probability × Impact.
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13. The Finance Manager is typically the risk owner for:
A. Environmental risk
B. Market competition
C. Liquidity and financial reporting risk
D. Safety and health risk
✅ Answer: C
Explanation: Finance handles risks relating to funding and reporting accuracy.
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14. The Production Manager is risk owner for:
A. Machine breakdown and process failure
B. Fraudulent reporting
C. Supplier insolvency
D. Customer dissatisfaction
✅ Answer: A
Explanation: Production risks include machinery issues and process inefficiencies.
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15. A high risk exposure situation means:
A. Risk impact is low
B. Probability of occurrence is minimal
C. Risk impact and likelihood are both significant
D. The risk is fully controlled
✅ Answer: C
Explanation: High exposure = high likelihood + high impact.
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👥 Part D – Stakeholders (Direct & Indirect)
16. Which of the following is a direct stakeholder in a manufacturing business?
A. Environmental NGOs
B. Employees
C. Media
D. Government agencies
✅ Answer: B
Explanation: Direct stakeholders are internal or directly affected parties (employees, owners, customers).
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17. Indirect stakeholders include:
A. Shareholders
B. Suppliers
C. Community and environment
D. Employees
✅ Answer: C
Explanation: Indirect stakeholders are affected by business outcomes but not directly involved.
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18. Shareholders are interested mainly in:
A. Product quality
B. Employee attendance
C. Return on investment and profitability
D. Inventory management
✅ Answer: C
Explanation: Investors seek return and sustainable growth.
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19. Suppliers are stakeholders because they:
A. Provide raw materials and depend on company’s stability
B. Buy finished goods
C. Provide auditing services
D. Regulate company operations
✅ Answer: A
Explanation: Suppliers rely on continued business for income and stability.
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20. Customers are stakeholders because they:
A. Own shares
B. Influence production planning and quality
C. Manage employee salaries
D. Prepare financial statements
✅ Answer: B
Explanation: Customer needs drive production, design, and quality management.
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21. Government agencies are stakeholders because they:
A. Advertise the company’s products
B. Collect taxes and enforce regulations
C. Lend money to the company
D. Design the product packaging
✅ Answer: B
Explanation: Governments regulate compliance, labor, environment, and taxation.
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22. The Board of Directors is responsible for:
A. Day-to-day operations
B. Long-term strategic direction and governance
C. Factory maintenance
D. Marketing research
✅ Answer: B
Explanation: The board oversees management and protects stakeholder interests.
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23. Which stakeholder group is most concerned about workplace safety?
A. Employees and labor unions
B. Customers
C. Creditors
D. Media
✅ Answer: A
Explanation: Employees are directly exposed to safety risks.
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24. Creditors are stakeholders because they:
A. Supply labor
B. Provide funds or credit to the company
C. Regulate market pricing
D. Monitor environmental impact
✅ Answer: B
Explanation: Creditors’ interest lies in the firm’s ability to repay debts.
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25. The community as a stakeholder is primarily interested in:
A. Profit-sharing and dividends
B. Employment opportunities and environmental protection
C. Raw material costs
D. Advertising campaigns
✅ Answer: B
Explanation: Communities benefit from jobs, local development, and sustainable practices.
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