If performance measures are perfect proxies for organizational goals,
A. sub-optimization will be enhanced.
B. sub-unit managers will strive to achieve organizational goals.
C. sub-units can all be decentralized.
D. residual income will rise.
Which of the following is false as it relates to quality?
A. Quality is the total of all characteristics of a product or service that impacts on its
ability to meet the needs of a specific person.
B. Quality must always be viewed from the user’s perspective.
C. Quality is never concerned with what the user thinks, feels, or deems important.
D. The definition of quality has evolved through time and is more currently
comprehensive than in the past.
Grant Corporation
The following information is available for Grant Corporation for the current month:
All materials are added at the start of production and the inspection point is at the end
of the process.
Refer to Grant Corporation. What are equivalent units of production for material using
weighted average?
A. 86,600
B. 87,500
C. 86,400
D. 85,500
Averaging the total cost of completed beginning work-in-process inventory and units
started and completed over all units transferred out is known as
A. strict FIFO.
B. modified FIFO.
C. weighted average costing.
D. normal costing.
A managerial accountant who communicates information objectively is exercising
which of the following standards?
A. objectivity
B. integrity
C. competence
D. confidentiality
Which of the following might be appropriate for items in the “C” category of a Pareto
inventory analysis?
A. a red-line system
B. a two-bin system
C. a periodic inventory system
D. all of the above
When the majority of authority is maintained by top management personnel, the
organization is said to be
A. centralized.
B. decentralized.
C. composed of cost centers.
D. engaged in transfer pricing activities.
A managerial accountant who prepares clear reports and recommendations after
analyzing relevant facts is exercising which of the following standards?
A. objectivity
B. integrity
C. competence
D. confidentiality
Riley Company
Riley Company produces two products from a joint process: A and C. Joint processing
costs for this production cycle are $9,000.
If A and C are processed further, no disposal costs will be incurred or such costs will be
borne by the buyer.
Refer to Riley Company. Using a physical measure, what amount of joint processing
cost is allocated to Product C (round to the nearest dollar)?
A. $3,682
B. $4,500
C. $5,318
D. $6,062
Which of the following is subtracted from weighted average EUP to derive FIFO
EUP?
A. beginning WIP EUP completed in current period
B. beginning WIP EUP produced in prior period
C. ending WIP EUP not completed
D. ending WIP EUP completed
Residual income is used as a performance measure in which of the following types of
centers?
A. yes no yes
B. yes yes yes
C. no yes yes
D. no yes no
Which of the following capital expenditure planning and control techniques has been
criticized because it might mistakenly imply that earnings are reinvested at the rate of
return earned by the investment?
A. payback method
B. accounting rate of return
C. net present value method
D. internal rate of return
Backflush costing is concerned with which of the following?
A. yes no
B. no no
C. yes yes
D. no yes
Which of the following is a term more descriptive of the term “direct costing”?
A. out-of-pocket costing
B. variable costing
C. relevant costing
D. prime costing
The balanced scorecard perspective that focuses on using a firm’s intellectual capital to
adapt to the needs of the market through product or service innovations is the:
A. learning and growth perspective
B. internal business perspective
C. customer value perspective
D. financial perspective
In the application of “variable costing” as a cost-allocation process in manufacturing,
A. variable direct costs are treated as period costs.
B. nonvariable indirect manufacturing costs are treated as product costs.
C. variable indirect manufacturing costs are treated as product costs.
D. nonvariable direct costs are treated as product costs.