1) An Enterprise Resource Planning System can best be described as ________.
A) a collection of programs that use a variety of unconnected databases
B) a single database that collects data and feeds it into applications that support each of
the company’s business activities, such as purchases, production, distribution, and sales
C) a database that is primarily used by a purchasing department to determine the correct
amount of a particular supply item to purchase
D) a sophisticated means of linking two or more companies to facilitate their planning
processes
2) Period costs ________.
A) include only fixed costs
B) seldom influence financial success or failure
C) include the cost of selling, delivering, and after-sales support for customers
D) should be treated as an indirect cost rather than as a direct manufacturing cost
3) Costs can be best managed before ________.
A) they are locked in
B) they are incurred
C) after they are locked in
D) after they are committed to
4) In joint costing, which of the following changes may lead to a change in product
classification?
A) main product sales price increases due to a new application
B) byproduct sales price decreases due to a new government regulation
C) main product becomes technologically obsolete
D) byproduct loses its market due to a new invention
5) Skizone Company’s 4-Variance Analysis:
If Skizone’s combined 4-Variance Analysis shows an unfavorable spending variance of
$2,300, what is the fixed overhead spending variance (a)?
A) $8,800 favorable
B) $4,200 unfavorable
C) $8,800 unfavorable
D) $4,200 favorable
6) A variance is ________.
A) the difference between actual fixed cost per unit and standard variable cost per unit
B) the standard units of inputs for one output
C) the difference between an actual result and a budgeted performance
D) the difference between actual variable cost per unit and standard fixed cost per unit
7) In the cost classification system used by manufacturing firms, assembly workers’
wages would be included in ________.
A) irrelevant cost
B) direct manufacturing costs
C) indirect manufacturing costs
D) period cost
8) The time from which a machine is setup for order till the product becomes a
manufactured good is ________.
A) waiting time
B) manufacturing time
C) manufacturing cycle time
D) customer-response time
9) The net present value method of capital budgeting is preferred over the internal
rate-of-return method because ________.
A) the net present value method is expressed as a percentage of initial investment
B) the net present values of individual projects can be added to determine the effects of
accepting a combination of projects
C) the percentage return computed under the net present value method is very easy to
compare
D) the calculation under the net present value method is easy as it does not use time
value of money
10) The Alfarm Corporation processes raw milk up to the splitoff point where two
products, cream and liquid skim, are produced and sold. There was no beginning
inventory. The following material was collected for the month of February:
The cost of purchasing 750,000 gallons of direct materials and processing it up to the
splitoff point to yield a total of 727,500 gallons of good product was $2,280,000.
What are the physical-volume proportions to allocate joint costs for cream and liquid
skim, respectively?
A) 59.00% and 41.00%
B) 60.82% and 39.18%
C) 50.00% and 50.00%
D) 59.79% and 40.21%
11) Which of the following is true of COQ measures?
A) They forecast customer satisfaction and employee satisfaction, which are useful
indicators of long-run performance.
B) They focus managers’ attention on how poor quality affects operating income.
C) They direct attention to financial processes that help managers identify the precise
problem areas that need improvement.
D) They provide immediate short-run feedback on whether quality-improvement efforts
are succeeding.