The two approaches to reporting cash flows provided by operating activities are the
a. Direct and indirect methods
b. The basic and standard methods
c. The gross margin and contribution margin methods
d. The liquidity and profitability methods
A contribution format income statement presents all costs
a.By behavior rather than by function.
b.By function rather than behavior.
c.By cost classification rather than by behavior.
d.None of these answer choices are correct.
An ideal standard signifies
a. Perfection.
b. Realistic projections.
c. Attainable goals.
d. All of these answer choices are correct.
Unprofitable customers should be
a. Dropped immediately.
b. Evaluated for implications that any action will have on the customer, other customers
and the company.
c. Evaluated for implications that any action will have on the company only.
d. Required to reimburse the company for any losses
As decision windows and operating cycles continue to shorten, which of the following
characteristics of a measure become more important?
a. Specific
b. Measurable
c. Actionable
d. Timely
Indicate which of the following users are classified as internal versus external users.
Internal External
a. Plant superintendent
b. Banker
c. Internal Revenue Service
d. Warehouse manager
e. Potential investor
The contribution margin of a particular segment less any direct fixed costs is called
a. Segment margin
b. Segment profit
c. Segment operating margin
d. None of these answer choices are correct
Which of the following items is relevant when deciding whether to prepare the
statement of cash flows using the direct method versus the indirect method?
a. Operating activities only
b. Investing activities only
c. Financing activities only
d. Investing and financing activities only
The DuPont model for calculating ROI contains which of the following components?
a. Margin
b. Asset turnover
c. Both margin and asset turnover.
d. Neither margin nor asset turnover.
The payback period is most often used as which of the following tools?
a. Preference
b. Screening
c. Budgeting
d. Evaluation
An activity that is performed for each individual unit of product is classified as a
a. Variable cost-level activity.
b. Unit-level activity.
c. Batch-level activity.
d. Operations-level activity.
On December 31, Berry Company recorded the following information in the Mixing
Department’s Work in Process account:
Assume that the unfinished units in ending inventory are 60% complete for both
materials and conversion. What is balance in the ending Work in Process on December
31?
a. $32,640
b. $33,300
c. $51,800
d. $52,300
Cost behaviors and estimates are valid only within the normal level of operating
activity. This range is referred to as the
a.Normal range
b.Activity range
c.Relevant range
d.Cost range
The value today of the dollars to be paid or received in the future is referred to as
a. Present value
b. Future value
c. Either a or b
d. Neither a nor b
Nora, Inc. manufactures components used by a major cell phone manufacturer. During
the year, Nora produced 160,000 components and used 40,500 direct labor hours. Nora
based its current year budget on a production level of 150,000 components each of
which requires 15 minutes of direct labor time. Total budgeted variable overhead for the
year was $131,250. Actual variable overhead for the year was $145,800. What is Nora’s
flexible budget variable overhead variance?
a. $14,550 favorable
b. $14,550 unfavorable
c. $4,050 unfavorable
d. $4,050 favorable
Building a balanced scorecard involves
a. Clarifying strategies.
b. Translating strategies into operational objectives.
c. Selecting measures that provide evidence of objectives achievements.
d. All of these answer choices are correct.
Which of the following measures how much of earnings per share is returned to
common stockholders in the form of dividends?
a. Earnings per share
b. Dividend payout ratio
c. Price/earnings ratio
d. Return on assets