Which of these is the perspective of the balanced scorecard that is at the top of the list
for a company’s lenders and shareholders?
A.financial perspective.
B.internal business and production process perspective.
C.learning and growth perspective.
D.customer perspective.
Which of the following is not a step in activity based costing?
A.Identify the activities that consume resources and assign costs to those activities.
B.Identify the cost drivers associated with each activity.
C.Compute a cost rate per department or plant.
D.Assign cost to products by multiplying the cost driver rate times the volume of cost
driver consumed by the product.
Which of the following is not an example of performance measures used to measure
customer satisfaction with service?
A.Number of customers
B.Amount of purchases per customer
C.Number of customer complaints per 1,000 orders
D.Customer satisfaction surveys
Ben’s Delivery Company
Ben’s Delivery Company reports the following information for 2010:
Actual:
Standard:
Refer to Ben’s Delivery Company. What is the variable overhead variance for fuel
costs?
A.$12.00 U
B.$12.00 F
C.$6.00 U
D.$6.00 F
What is the secondstep in allocating service department costs to production
departments?
A.Assign overhead costs that are directly attributable to a service or production
department.
B.Allocate other overhead costs based on appropriate cost drivers.
C.Allocate service department costs to production departments.
D.None of the answers is correct.
Which of the following transfer pricing procedures maximizes the company’s profit by
transferring at the differential outlay cost to the selling division plus the opportunity
cost to the company of making the internal transfers?
A.economic transfer pricing rule.
B.effective transfer pricing rule.
C.efficient transfer pricing rule.
D.None of the answers is correct.
A new managerial application for budgeting focuses on how multinational corporations
exchange budget data electronically through the World Wide Web by using
A.the world wide web budget data exchange interface technology.
B.the Internet.
C.e-commerce.
D.the international budget information and data exchange transactions.
An incentive model for accurate reporting having three components (1) it relates
rewards to positively forecasted sales, (2) it provides incentives to increase sales
beyond the forecast, and (3) it penalizes when sales fall lower than forecasted, should
be developed for the firm’s
A.chief executive officer
B.chief financial officer
C.budget director
D.sales manager
In a normal costing system, how is the predetermined overhead rate calculated?
A.Divide actual manufacturing overhead by the normal (or estimated) activity level.
B.Divide estimated manufacturing overhead by the actual activity level.
C.Divide estimated manufacturing overhead by the normal (or estimated) activity level.
D.Divide actual manufacturing overhead by the actual activity level.
An investment center’s performance is most likely to be affected by which of the
following?
A.an increase is sales volume.
B.a decrease in expenses.
C.an increase in interest rates.
D.all of the above.
Which of the following statements is true concerning the flexible budget?
A.The flexible budget shows the expected relation between costs and volume.
B.The flexible budget has a fixed cost component which is expected to be incurred
regardless of the level of activity.
C.The flexible budget has a variable cost per unit of activity component where variable
costs change in total as the level of activity changes.
D.all of the above.
Which of the following accurately describes the managerial accountants’ professional
environment and ethical responsibilities?
A.Stockholders have an ethical responsibility to report accurately even when their own
compensation suffers.
B.Financial analysts have an ethical responsibility to report accurately even when their
own compensation suffers.
C.Managers have an ethical responsibility to report accurately even when their own
compensation suffers.
D.Managers do not have an ethical responsibility to report accurately even when their
own compensation suffers.
Which of the following is an example of the costs incurred by a tire company for
replacing defective tires?
A.prevention costs.
B.appraisal costs.
C.internal failure costs.
D.external failure costs.
Which of the following is an example of a non-value-added cost?
A.Storage
B.Moving items
C.Waiting for work
D.All of the above are non-value-added costs.
Using activity-based costing to analyze customer profitability requires the analyst to
determine the cost to retain customers,which includes such activities as
A.follow-up calls.
B.conducting campaign to win back customers.
C.promoting the product.
D.All of the answers are correct.
Which of the following is nota characteristic of an effective cost system?
A.Decision focus
B.Different costs for different purposes
C.Cost-benefit test
D.Generally accepted accounting principles compliant
Control charts are management tools that
A.depict variations in a process and its behavior over time.
B.help management distinguish between random or routine variations in quality.
C.direct attention to variations that management should investigate.
D.All of the answers are correct.
Which statement is true concerning capacity costs?
A.Capacity costs are certain fixed costs that provide a firm with the capacity to produce
or sell or both.
B.Capacity costs need not be incurred in the short run to conduct business.
C.Capacity costs are uncontrollable in the long run.
D.Capacity costs are always non-value added.
Identify capacity costs, committed costs, and discretionary costs.
Compare and contrast the terms relevant costs and non-relevant costs as used in
decision making.
Falcon Company’s most recent capital expenditure project will require an initial
investment of $600,000 and is expected to generate the following cash flows:
Year 1 $100,000
Year 2 $250,000
Year 3 $250,000
Year 4 $200,000
Year 5 $100,000
Required:
If the required rate of return is 20% and taxes are ignored, what is the project’s net
present value?
Explain the use of differential analysis to determine when to add or drop parts of
operations.
Crown Corporation
Crown Corporation has agreed to sell some used computer equipment to Bob Parsons,
one of the company’s employees, for $5,000.
Refer to Crown Corporation. If Crown offers to accept a $1,000 down payment and set
up a note receivable for Bob Parsons that calls for four $1,000 payments at the end of
each of the next 4 years and Crown uses a 6 percent discount rate, what is the present
value of the note?
Product mix decision. The Jackson Company has one machine on which it can
produce either of two products, Y or Z. Sales demand for both products is such that the
machine could operate at full capacity on either of the products, and Jackson can sell all
output at current prices. Product Y requires one hour of machine time per unit of output
and Product Z requires two hours of machine time per unit of output. The following
information summarizes the per-unit cash inflows and costs of Products Y and Z.
Selling costs are the same whether Jackson produces Product Y or Z, or both; you may
ignore them.
Required:
Should Jackson Company plan to produce Product Y, Product Z, or some mixture of
both? Why?
Break-even time. Clarkson Company’s research and development department is
presenting a proposal for new-product research. The new product will require research,
development, and design investments of $500,000 (discounted cash flow). Sales will
begin after two years and will generate an annual discounted net cash flow of $200,000
starting in Year 3.
Solving for budgeted manufacturing costs. Calvin Company expects to sell 10
million cases of paper towels during the current year. Budgeted costs per case are $24
for direct materials, $18 for direct labor, and $6 (all variable) for manufacturing
overhead. Calvin began the period with 80,000 cases of finished goods on hand and
wants to end the period with 20,000 cases of finished goods on hand.
Required:
Compute the budgeted manufacturing costs of the Calvin Company for the current
period. Assume no beginning or ending inventory of work-in-process.
How does fraudulent financial reporting differ from simply making an error in financial
reporting?
Identify a non-value-added activity for customers of each of the following: a grocery
store, a bank, and an airline.
How might each organization be able to eliminate the non-value-added activity
identified?