ABC Company
ABC Company reports the following information for the most recent period when 2,750
units were produced.
Refer to ABC Company. Calculate the total direct materials variance.
A.$7,500 U
B.$7,850 U
C.$7,150 U
D.$7,000 U
What are selling, general and administrative costs considered ‘sticky?”
A.These costs increase more when sales increase than they decrease when sales
decrease by the same amount.
B.These costs increase less when sales increase than they decrease when sales decrease
by the same amount.
C.These costs increase the at the same rate when sales increase and decrease at the
same rate when sales decrease by the same amount.
D.None of the answers are correct.
What is the appropriate decision to make it the present value of the future cash inflows
exceeds the present value of the future cash outflows for a proposal?
A.accept the alternative.
B.reject the alternative.
C.find a better alternative.
D.decrease the firm’s cost of capital.
All of the following statements are true regarding the contrast between income
statements for managerial use with those for external reporting except:
A.Income statements for external reporting show variable and fixed costs.
B.Income statements for external reporting typically aggregate data more than those
used for managerial purposes.
C.Income statements for external reporting comply with income tax regulations and
financial accounting principles.
D.Operating profit is used at the bottom of income statements prepared for managerial
use.
Which product pricing practice is used by the majority of Japanese companies in
assembly-type operations (e.g. electronics and automobiles)?
A.Variable costs, only
B.Fixed costs, only
C.Full costs
D.Absorption costs
The use of activity-based costing and activity-based management have resulted in
A.less need to maintain good relationships with suppliers.
B.overhead costs being reduced substantially.
C.increased number of supervisory personnel being hired.
D.All of the answers are correct.
If revenues are $25 per unit, variable costs are $15 per unit, and fixed costs are $400,
what is the operating profit when 100 units are sold?
A.($600)
B.$600
C.($1,900)
D.$2,500
For managerial accounting purposes, how are fixed manufacturing costs treated?
A.As product costs.
B.As period costs.
C.As opportunity costs.
D.As variable costs.
Which statement is true concerning target costing?
A.Target costing is setting price below costs in the short run to drive out competitors.
B.Target costing is the systematic evaluation of all costs relevant to a decision.
C.Target costing is the concept of price-based costing.
D.None of the answers is correct.
To encourage division managers to act in ways consistent with organizational goals,
divisional planning and control systems attempt to create
A.profit maximization.
B.centralization.
C.goal congruence.
D.non-goal-congruent behavior.