Moving the delivery of services from within the organization to a provider outside the
organization is referred to as
a. Outcome sourcing.
b. Outsourcing.
c. Delivery diffusion.
d. Delivery transfer
Most managerial decisions are made at which of the following levels?
a.Organization-level
b.Operating-segment level
c.Managerial accounting level
d.Presidential level
The IMA Statement of Ethical Professional Practice includes which of the following
components?
a.Overarching principles that express members ‘ values.
b.Interpretations of principles.
c.Both overarching principles that express members ‘ values and interpretations of
principles.
d.Neither overarching principles that express members ‘ values nor interpretations of
principles.
Pueblo Production Company manufactures 50,000 high-definition televisions each year.
Pueblo is considering purchasing the glass screens from an outside source rather than
producing them internally. The following data relate to the glass screens:
Should Pueblo purchase or produce the screens, and what is the savings associated with
the decision?
a. Purchase the screens and save $157,100
b. Produce the screens and save $157,100
c. Produce the screens and save $207,500
d. Purchase the screens and save $207,500
Managerial accounting reports historical information often with the purpose of
a.Comparing actual results to budgeted results
b.Helping managers to make decisions that will affect the company ‘s future by
projecting the results of certain decisions.
c.Both comparing actual results to budgeted results and helping managers to make
decisions that will affect the company ‘s future by projecting the results of certain
decisions.
d.Neither comparing actual results to budgeted results nor helping managers to make
decisions that will affect the company ‘s future by projecting the results of certain
decisions.
A negotiated price is one that
a. Provides the selling division with a normal profit.
b. Provides the buying division with the lowest price available from outside suppliers.
c. Is agreed to by both the buying and selling division.
d. None of these answer choices are correct.
The following financial statement items are shown for J&T Manufacturing.
Calculate the common-size percentage for inventory.
a. 8%
b. 14%
c. 20%
d. 500%
A company with a high operating leverage will experience
a. A large percentage change in operating income as a result of a small percentage
change in sales.
b. A small percentage change in operating income as a result of a small percentage
change in sales.
c. The same percentage change in operating income as a result of a percentage change
in sales.
d. A small percentage change in operating income as a result of a large percentage
change in sales.
General Hospital is planning to add a new diagnostic machine which should improve its
quality of certain blood tests. The machine under consideration has a cost of $79,189
and is expected to save the hospital $8,000 each year. The machine has an expected
useful life of 14 years.
Required:
a. Calculate the internal rate of return on the diagnostic machine.
b. If the hospital uses a hurdle rate of 6%, should the diagnostic machine be purchased?
Why or why not?
Horizontal analysis is
a. Looking at the changes in the account balances reported on a financial statement over
time.
b. Looking at the changes in the account balances within a financial statement for one
year.
c. Preparing an analysis of the profitability ratios in columns.
d. None of these answer choices are correct.
Which of the following formulas is used to calculate the breakeven point in units?
a. Total fixed costs divided by contribution margin per unit.
b. Total fixed costs divided by total contribution margin.
c. Total fixed costs divided by contribution margin ratio.
d. None of these formulas calculates the breakeven point in units.
A measure is relevant if it
a. Is complete and accurate.
b. Is clearly and directly related to the process it measures.
c. Relates to a corporate strategic objective.
d. None of the these answer choices are correct.
Jumbo Industries is considering the purchase of equipment costing $80,000. The
company has a 15% required minimum rate of return. The equipment is expected to
generate $20,000 in additional operating income. What is the equipment ‘s residual
income?
a. $8,000
b. $9,000
c. $12,000
d. $15,000
Investigating liquidity is important because
a. If a company cannot pay its bills on time, it will have difficulty obtaining resources
needed to continue operating.
b. A company needs the ability to take advantage of opportunities as they arise.
c. Both if a company cannot pay its bills on time, it will have difficulty obtaining
resources needed to continue operating and a company needs the ability to take
advantage of opportunities as they arise.
d. Neither if a company cannot pay its bills on time, it will have difficulty obtaining
resources needed to continue operating nor a company needs the ability to take
advantage of opportunities as they arise.
Rather than looking only at the balances reported on the financial statements, it is
helpful to look at the changes in the account balances over time. This is called
a. Common analysis.
b. Vertical analysis.
c. Horizontal analysis.
d. Benchmarking
Traditionally, organizations have evaluated their performance using only financial
measures. However, many other performance indicators should be considered. The
balanced scorecard was developed to assist managers in measuring performance across
several perspectives.
Required
a. Identify and discuss each of the perspectives used in the balanced scorecard.
b. Provide three measures of performance used in each perspective.
An example of a variable cost for a cell phone manufacturer is
a.Units sold.
b.Units produced.
c.Minutes talked.
d.Touch screens used in production.
Why would a movie theater with some seats still available not sell tickets at a reduced
price to moviegoers that show up at the last minute?
Which of the following is the correct journal entry to record direct materials put into
production?
Place an “X” in the column that corresponds to the type of activity level referred to in
each scenario.
What assumptions are made when calculating breakeven point in a multi-product
environment?
Net income after interest and taxes is a common income measurement choice used to
calculate ROI for an entire organization, because all expenses are under the CEO ‘s
control at the corporate level.
What is the cost of goods manufactured? How does it differ from total manufacturing
cost? How are the cost of goods manufactured and the total manufacturing cost used in
the schedule of cost of goods manufactured?
The following balances were gathered from Brannon Corporation’s general ledger.
Required:
Using the indirect method, prepare the cash flows provided by operating activities
section of Brannon’s statement of cash flows.
