The first section of the cash budget reconciles the cash available to the borrowing
required to meet the minimum cash balance.
A decrease in accounts payable is added to net income when using the indirect method
of calculating cash flows provided by operating activities.
A fixed cost is a cost that does not change in total with the activity level.
The Robinson-Patman Act of 1936 prohibits companies from engaging in price
discrimination -that is, offering the same item to different customers at different prices.
Variable costs associated with a segment ‘s sales may not always be avoidable.
The time it takes, in years, for an investment to return the original amount of invested
capital is referred to as
a. Payback period.
b. Period of return.
c. Investment return period.
d. Capital return period.
Delta Airlines uses Wipro, an Indian company, to handle its customer service calls. This
is an example of
a. Offshoring.
b. Outshoring.
c. Outsourcing.
d. Offsourcing.
Which of the following is a similarity between job order costing and process costing
systems?
a. Both accumulate costs on a job cost sheet
b. Both accumulate product costs in each production department during the period
c. Both systems track cost flows from raw materials to work in process, from work in
process to finished goods, and from finished goods to cost of goods sold
d. Both produce many different types of products, often to customer specifications
When a company repurchases its own stock, which of the following is the correct
reporting on the statement of cash flows?
a. A source of cash in the financing section
b. A use of cash in the financing section
c. A source of cash in the investing section
d. A use of cash in the investing section
The packaging department in a large manufacturing company would be classified as a
a. Cost center.
b. Profit center.
c. Investment center.
d. Segment.
Which of the following is not a component of the master budget?
a. Budgeted income statement
b. Direct material purchases budget
c. Ending inventory and cost of goods sold budget
d. All of these answer choices are components of the master budget.
When using a standard costing system, at the end of an accounting period, the balances
in which of the following accounts will be at standard amounts?
a. Raw materials inventory and Work in process only
b. Cost of goods sold only
c. Finished goods and cost of goods sold only
d. Raw materials, Work in process, Finished goods, and Cost of goods sold
Just-in-time inventory can be traced back to
a.Toyota Motor Company
b.Henry Ford
c.Microsoft
d.Wal-mart
Which of the following is not a source of cash?
a. Dividends received on investment
b. Borrowing $5,000 on short-term note
c. Gain on sale of warehouse
d. All of these answer choices are sources of cash
The relationship between the discount rate and the present value is
a. Inverse
b. Proportionate
c. Constant
d. Sporadic
At the break-even point of 2,000 units, variable costs are $55,000, and fixed costs are
$32,000. How much is the selling price per unit?
a. $43.50
b. $11.50
c. $16.00
d. $27.50
Which of the following budget approaches will produce a more accurate budget?
a. Participative budgeting.
b. Imposed budgeting.
c. Responsibility budgeting.
d. None of these answer choices are correct.
A strategy map
a. Is a visual display of the key measures related to an organization’s strategies.
b. Is a pictorial representation of the cause-and-effect relationships embodied in the
strategies.
c. Is a visual display of the corporation’s strategies.
d. Is a pictorial representation of the particular strategies that have been met by the
organizational units.
Which of the following is least likely to be in a company ‘s code of ethics?
a.Transparency of information
b.Commitment to the environment
c.Maximum amount of bonuses to be paid to executives
d.Discrimination
Ellis Dover is a scout for a Major League Baseball team based in Phoenix, Arizona.
Ellis needs to travel to Los Angeles, California on June 1 to perform a variety of
professional functions prior to the team travelling to Los Angeles to play. If Ellis flies,
he could catch a 6 a.m. flight on June 1. In order to perform all of his professional
responsibilities, Ellis will need to spend the night and catch a flight on June 2nd to
return to Phoenix. If Ellis flies, he will need to rent a car for $38 per day. To cover
meals and other incidental expenses, Ellis will receive $45 per day (per diem) for each
day he works out of town. Flights between Phoenix and Los Angeles can be purchased
for $89 one way.
Phoenix is approximately 300 miles from Los Angeles, a 5-hour drive at speed limits
permitted on the freeways connecting the two cities. If he drives from Phoenix to Los
Angeles, Ellis would need to leave the afternoon of May 31 and would be reimbursed
$.50 per mile. He would need to spend 2 nights in a hotel, the night of May 31 and the
night of June 1. He would return to Phoenix by car on June 2nd. The hotel used by the
team charges $160 per night. What is the relevant cost of driving?
a. $755
b. $505
c. $415
d. $428
A profit center manager should be evaluated by
a. Examination of actual costs against budgeted costs.
b. A review of both revenues and expenses, with a focus on operating income.
c. How well assets have been used to generate income.
d. None of these answer choices are correct.
Indicate which of the following users are classified as internal versus external users.
In an activity- based costing system, all activities are not created equal. List the five
categories for which activities are classified and give one example of each.
Identify the desirable characteristics of performance measures.
Morgan’s Creations sells monogrammed baby blankets. The blankets cost Morgan $15
each. Morgan sells her blankets at a 60% markup. What is her sales price?
Suppose you are investigating direct materials variances. You find that the direct
materials price variance is favorable, but the direct materials quantity variance is
unfavorable. Assuming that the quantity purchased and used were equal, what
circumstances could explain both variances?
A drawback of cost-plus pricing is that it is a relatively difficult approach to pricing.
Place an “X” in the column that corresponds to the type of activity referred to in a
hospital setting.
An organizational structure in which decision-making authority for the entire
organization rests in the hands of one person or a small group of people in a single
location is called centralization.
Indirect materials are classified as manufacturing overhead. How might indirect
materials generate an unfavorable usage variance that is not related to the efficient use
of the variable overhead activity driver?