Which of the following does benchmarking not focus on?
a. Identifying best practices
b. Studying best practices
c. Analyzing best practices
d. Eliminating non-value-added processes
Benny Books sells first edition books. Benny purchases the books from his supplier for
$100 a book and sells them through his website for $225 a book. Benny’s fixed costs are
$87,000. What is Benny’s breakeven point in books?
a. 268
b. 387
c. 696
d. 870
Using the direct method of preparing the statement of cash flows, which of the
following is not an activity generating operating cash flows?
a. Collections from customers
b. Collection of notes receivable
c. Payments for income taxes
d. Payments to employees
Kandy Harts manufactures custom T-shirts. Each T-shirt can be imprinted front and
back with photos, company logos or other information. Each T-shirt requires 2 ounces
of ink, 15 minutes of direct labor (processing, folding, packaging), and a plastic bag for
packaging. The following information is available regarding costs:
Kandy applied overhead at a rate of $9.40 per direct labor hour, and fringe benefits for
workers are an additional 20% of wages. What is the standard price of producing one
long-sleeve T-shirt?
a. $11.15
b. $12.23
c. $11.23
d. $11.73
If you think of an organization ‘s structure as a continuum, on the centralized end of the
continuum, operational managers
a. Are never evaluated.
b. Are evaluated on costs, revenue, and profit.
c. Have complete control over operational decisions.
d. Have no authority to make decisions.
Using the direct method of preparing the statement of cash flows, to determine the cash
effects of operating activities, which of the following needs to be adjusted?
a. Net income
b. Reported revenues and expenses
c. Long-term assets and liabilities from the balance sheet
d. Equity as reported in the balance sheet
Which of the following geographical regions report the highest usage of a balanced
scorecard to monitor performance?
a. Asia
b. Canada
c. South America
d. United States
Kid’s Corner sells lamp systems for $25. These systems use LEDs to create a light
display across walls or ceilings. Kid’s Corner pays $13 for the systems. Fixed costs
incurred by the company are $18,000.
a. What is the breakeven point in units?
b. If Kid’s Corner wishes to earn $10,000 in operating income, how many systems will
it have to sell?
Tanger Products plans to produce 10,000 units in January. Each unit requires 3 pounds
of plastic, which costs $2 per pound. What standard material cost would the company
use to plan for production?
a. $2
b. $6
c. $3,333
d. $5,000
A performance dashboard does which of the following?
a. Offers a visual display of key performance measures
b. Identifies whether a measure is leading or lagging
c. Both Offers a visual display of key performance measures and Identifies whether a
measure is leading or lagging
d. Neither Offers a visual display of key performance measures nor Identifies whether a
measure is leading or lagging
In contrast to a variable cost
a.The total amount of a fixed cost does not change with activity level.
b.The total amount of a fixed cost increases as activity increases.
c.The per unit amount of a fixed cost does not change with activity level.
d.The per unit amount of a fixed cost increases as activity increases.
Cost-plus pricing adds an amount to
a. The cost of the product or service to cover operating costs and contribute to its profit.
b. Variable and fixed costs to cover overhead.
c. The sales price to cover unexpected costs.
d. Contribution margin to cover fixed costs.
A 10 percent increase in sales volume will result in
a.A 10 percent decrease in per unit fixed cost.
b.A 10 percent increase in total fixed cost.
c.A 10 percent increase in per unit fixed cost.
d.No change in total fixed cost.
Which of the following is the most time consuming part of implementing an
activity-based costing system?
a. Identifying activities
b. Developing activity cost pools
c. Calculating activity cost pool rates
d. Calculate the unit product cost
Assigning manufacturing overhead cost to activity pools is referred to as first-stage
allocation because
a. Costs are assigned first to the activity pools before being assigned to cost objects.
b. Costs are assigned first to the activity pools before being assigned to cost drivers.
c. Costs are assigned first to the activity pools before being assigned to activity drivers.
d. Costs are assigned first to the activity pools before being assigned to activity objects.
A pictorial representation of the cause-and-effect relationships embodied in the strategy
is called a
a. Strategy map.
b. Strategy scorecard.
c. Strategy dashboard.
d. Strategy lead.
If an unprofitable customer cannot be turned into a profitable one, the company should
consider
a. Lowering its selling price for the customer
b. Dropping the customer
c. Increasing the selling price until the customer become profitable
d. None of these answer choices are correct
Morrow Company has invested in equipment that cost $70,000. The equipment has a
7-year life and no salvage value. Morrow uses straight-line depreciation. The equipment
has a payback period of 4 years. The accounting rate of return is closest to
a. 3.5%
b. 10.7%
c. 25%
d. 39%