Which of the following is an example of direct materials cost for an automobile
manufacturer?
A.cost of wages of assembly workers
B.cost of oil or lubricants for the factory machinery
C.cost of the automobile windshield
D.salary of the production supervisor
Customer costs generally fall under several categories. Which is not one of these
categories?
A.Cost to acquire the customer
B.Cost to provide goods and services
C.Cost to maintain customers
D.Cost to terminate customers
Project A has an expected cash flow of $500,000 at the end of year 5. Project B has an
expected cash flow of $100,000 to be received at the end of each year for the next five
years. What can be said of the net present value of project A compared to project B?
A.They are the same because both cash flows total $500,000 over the lives of the
projects.
B.Project A is preferred because of the largest lump-sum payment in year 5.
C.Project B is preferred because of the periodic payments made consistently throughout
the years and are made earlier.
D.The both have the same internal rate of return and either should be accepted.
Analysts should take which step(s) in analyzing cost data?
A.Review alternative cost drivers.
B.Plot the data.
C.Examine the data and method of accumulation.
D.All of the answers are correct.
Chemical Company has two divisions, the Mixing Division and Bottling Division. The
Mixing Division sells chemicals to the Bottling Division.
Standard costs for the Mixing Division are as follows:
The Bottling Division uses the following predetermined overhead rate:
What is the transfer price for the chemicals per gallon based on standard variable cost?
A.$3.00
B.$5.40
C.$9.00
D.$11.40
TopSail Company
TopSail Company produces one type of machine with the following costs and revenues
for the year
Refer to the TopSail Company. Calculate the break-even point in units.
A.700,000
B.2,100,000
C.1,400,000
D.450,000
Because tax rates are different in different countries, companies have incentives to set
transfer prices that will
A.increase revenues in low-tax countries.
B.decrease costs in high-tax countries.
C.decrease revenues in low-tax countries.
D.None of the answers is correct.
Activity-based costing is commonly used with standard costing. Using activity-based
costing, a company has
A.a single cost driver
B.multiple cost drivers.
C.no cost drivers.
D.the same cost drivers as standard costing.
Which statement is true concerning target pricing?
A.Target pricing is based on customers’ perceived value for the product.
B.Target pricing is illegal under Federal law.
C.Target pricing is anti-competitive.
D.Target pricing is the same as predatory pricing.
Activity-based costing (ABC) assigns costs first to
A.activities, then to the products based on each product’s use of activities.
B.products, then to the activities based on each activity’s use of products.
C.services, then to the activities based on each service’s use of activities.
D.None of the above answers is correct.
What is true concerning internal auditors?
A.Internal auditors can not deter nor detect fraud.
B.Internal auditors can deter but not detect fraud.
C.Internal auditors can not deter but can detect fraud.
D.Internal auditors can both deter and detect fraud.
Which of the following is not a capital expenditure decision?
A.Purchasing a new piece of equipment
B.Building a new factory
C.Purchasing a computer system
D.Issuing common stock
Research, development, and advertising to generate new business are examples of
which of the following costs?
A.discretionary costs.
B.committed costs.
C.required costs
D.Both b. and c. are correct
Stephanie Company
Stephanie Company has two production departments: D and J. Stephanie also has 3
service departments: Personnel, Administration, and Shipping. Shipping costs are
allocated on the basis of number of packages, while Personnel and Administration costs
are allocated using number of employees. Assume that the ranking of the benefits
provided is in the order listed below.
Refer to Stephanie Company. Using the step method, what amount of Personnel costs is
allocated to Department J (rounded to the nearest $)?
A.$ 73,171
B.$105,263
C.$157,895
D.$240,000