Doug’s Delivery Company
Doug’s Delivery Company reports the following information for 2010:
Actual:
Standard:
Refer to Doug’s Delivery Company. What is the variable overhead flexible budget for
March 2010?
A.$180.00
B.$198.00
C.$220.00
D.$240.00
Which of the following is a cost that does not change in total as the level of activity
changes?
A.fixed cost.
B.direct cost.
C.indirect cost.
D.variable cost.
Activity-based management starts with which of the following?
A.activity benefit analysis.
B.activity cost cutting.
C.activity-based costing.
D.activity analysis.
Bluestone Company is planning to expand its warehouse distribution center. Variable
costs will increase 5% and fixed costs will increase 20%. Last year’s costs are below.
Calculate the future total cost assuming 1,000 units are shipped each month.
A.$74,000
B.$72,500
C.$75,000
D.$76,500
When are cost allocation concepts appropriate?
A.only as management deems appropriate.
B.in manufacturing, nonmanufacturing, and service organizations.
C.in allocating costs to production departments, but not from one service department to
another.
D.None of the answers is correct.
Which of the following statements is correct regarding marketing travel costs?
A.Marketing travel costs are incurred for customer-related activities.
B.Marketing travel costs are fixed in the long-term.
C.Marketing travel costs are variable in the short-term.
D.both “a” and “b”
How do companies that are large, highly integrated and very centralized, weight the
performance evaluation?
A.more on each division’s performance and less on company-wide performance.
B.less on each division’s performance and more on company-wide performance.
C.on the stock market performance of the company’s shares, only.
D.equally between each division’s performance and company-wide performance.
Who manages cash flows and raises cash for operations in most organizations?
A.Controller
B.Treasurer
C.Board of directors
D.Chief executive officer
What costs can be justified when a firm enters into a long-term contractual relationship
to supply a product?
A.Variable costs
B.Fixed costs
C.Full costs
D.Absorption costs
Which of the following statements is true concerning finding a cost-allocation base for
activity-based costing?
A.Finding the cost-allocation base is justified if the benefits from improved decisions
exceed the costs of finding and using the base.
B.Finding the cost-allocation base is usually difficult and costly.
C.Finding the cost-allocation base may require the accumulation of extensive data in
addition to the regular accounting information.
D.All of the answers are correct.
Considering the time dimension, how does managerial decision making compare with
external performance evaluation?
Managerial Decision Making External Performance
A. Past Past
B. Past Future
C. Future Past
D. Future Future
What is the term that describes costs that relate directly to a cost object?
A.direct cost.
B.indirect cost.
C.sunk cost.
D.target cost.
What is true concerning companies that use absolute performance evaluations?
A.Divisional performance is compared with that of other divisions in the same industry.
B.Managers are shielded from the risk of managing a division in a poorly performing
industry.
C.Incentives are provided for managers to move out of low-performing to
high-performing industries.
D.Managers are forced to seek, new, more profitable opportunities.