1) a firm has decided to use the balanced scorecard. which of the following is not an
advantage the company will gain by using the balanced scorecard?
a.it links the firm’s csfs to its strategy
b.it helps the firm monitor progress to achievement of its strategic goals
c.it can provide a basis for implementing strategic changes desired by the firm
d.it provides a comprehensive financial overview of the firm
e.it helps to coordinate activities in the firm
2) which of the following would not be considered a facility-level activity?
a.providing security for the plant
b.factory property taxes and insurance
c.closing the books each month
d.placing purchase orders
3) cathy’s towels sells three items (which it purchases from a supplier): bath towels,
hand towels, and washcloths in a 4:3:2 mix (thus, a batch of 9 towels has 4 bath towels,
3 hand towels, and 2 washcloths). each bath towel sells for $10 and costs $4, each hand
towel sells for $5 and costs $2; and each washcloth sells for $2.50 and costs $1. the
shop’s annual fixed expenses are $324,000, and the income tax rate is 40%. how many
bath towels must the firm sell at the breakeven point?
a.20,000
b.36,000
c.44,000
d.51,000
e.81,000
4) maxwell manufacturing is contemplating the purchase of a new machine to replace a
machine that has been in use for seven years. the old machine has a net book value of
$50,000 and still has five years of useful life remaining. the old machine has a current
market value of $5,000, and would have no market value after five years. the variable
operating costs and depreciation expenses (straight-line) are $135,000 per year. the new
machine will cost $90,000, has an estimated useful life of five years with zero disposal
value after five years, and an annual operating expense of $118,000 (including
straight-line depreciation). considering the five years in total and ignoring the time
value of money and income taxes, what is the difference in total relevant
decision-making costs if the old machine is replaced?
a.$0
b.$25,000
c.$35,000
d.$40,000
e.$50,000
5) kelvin co. produces and sells socks. variable costs are budgeted at $4 per pair, and
fixed costs for the year are expected to total $90,000. the selling price is expected to be
$6 per pair.
the sales dollars required to make an after-tax profit for kelvin co. of $15,000, given an
income tax rate of 40%, are calculated to be:
a.$336,000
b.$339,000
c.$342,000
d.$360,000
e.$345,000
6) based on the maintenance expenses of a company, which are to be analyzed for
purposes of constructing a flexible budget. examination of past records disclosed the
following costs and volume measures:
using the high-low technique, estimate the annual fixed cost for maintenance
expenditures:
a.$447,000
b.$240,000
c.$230,000
d.$384,000
e.$228,000
7) engineering change orders, equipment maintenance, and product development costs
are examples of:
a.unit costs
b.batch costs
c.product-level costs
d.facility-level costs
e.unit, batch, and customer-sustaining costs, respectively
8) which of the following is the primary user of management accounting information
regarding business units?
a.company management
b.investors
c.creditors
d.industry and governmental organizations
9) the gray company has a staff of five clerks in its general accounting department.
three clerks who work during the day perform sundry accounting tasks; the two clerks
who work in the evening are responsible for (1) collecting the cost data for the various
jobs in process, (2) verifying manufacturing material and labor reports, and (3)
supplying production reports to the supervisors by the next morning. the salaries of
these two clerks who work at night should be classified as:
a.period costs
b.direct costs
c.product costs
d.indirect costs
10) orange, inc. has identified the following cost drivers for its expected overhead costs
for the year:
total direct labor hours budgeted = 2,000 hours.
the following data applies to one of the products completed during the year:
if orange, inc. uses machine hours to allocate overhead cost, the unit product cost of
product x will be:
a.$60.00
b.$80.00
c.$90.00
d.$110.00
e.$130.00
11) the contribution margin per unit multiplied by the number of units sold is the:
a.segment margin
b.total contribution margin (cm)
c.contribution margin ratio
d.margin of safety (mos)
e.breakeven point
12) everlast co. manufactures a variety of drill bits. the company’s plant is partially
automated. the budget for the year includes $432,000 payroll for 4,800 direct
labor-hours. listed below is cost driver information used in the product-costing system:
a current product order has the following requirements:
using abc, how much quality control overhead is assigned to the order?
a.$8,000
b.$9,960
c.$11,108
d.$19,200
e.$45,933
13) activity-based costing (abc) differs from other costing approaches in that it more
accurately measures the cost of activities:
a.not proportional to the volume of outputs produced
b.directly proportional to the volume of outputs produced
c.inversely proportional to the volume of outputs produced
d.that are non-value adding
e.at a significantly lower cost in time and money
14) which of the following can use cost/volume/profit (cvp) analysis?
a.not-for-profit organizations, but not service firms
b.service firms, but not organizations that are not-for-profit
c.not-for-profit organizations, service firms, and manufacturers
d.manufacturing firms, but not service firms
15) based on the maintenance expenses of a company are to be analyzed for purposes of
constructing a flexible budget. examination of past records disclosed the following
costs and volume measures:
using the high-low-point method of analysis, the estimated variable cost per machine
hour is:
a.$0.40
b.$0.20
c.$0.90
d.$0.10
e.$0.70
16) the point in a joint production process at which individual products can be
identified for the first time is called the:
a.separable point
b.by-pass point
c.split-off point
d.joint identification point