Which term describes the interest rate used in computing the present value of future
cash flows?
A.applicable treasury rate
B.discount rate
C.income tax rate
D.borrowing rate.
KF Company
KF Company uses standard costing. The company reported the following information
for the current period:
Refer to KF Company. Calculate the total fixed overhead efficiency variance.
A.$8,000 F
B.$300 F
C.$500 U
D.$1,000 U
CVP-sensitivity analysis. Joan’s Beauty College is considering introducing a new nail
design seminar to run on an annual basis with the following price and cost
characteristics:
Required:
a. What enrollment enables Joan’s Beauty College to break even?
b. How many students will enable Joan’s Beauty College to make an operating profit of
$30,000 for the year?
c. Assume that the projected enrollment for the year is 600 students for each of the
following situations:
(1) What will be the operating profit for 600 students?
(2) What would be the operating profit if the tuition per student (that is, sales price)
decreased by 10 percent? Increased by 20 percent?
(3) What would be the operating profit if variable costs per student increased by 10
percent? Decreased by 20 percent?
(4) Suppose that fixed costs for the year are 10 percent lower than projected, whereas
variable costs per student are 20 percent higher than projected. What would be the
operating profit for the year?
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 direct materials price variance.
A.$350 F
B.$-0-
C.$350 U
D.$7,150 U
Cost-volume-profit analysis includes some inherent, simplifying assumptions. Which of
the following is not one of these assumptions?
A.Cost and revenues are predictable and are linear over the relevant range.
B.Variable costs fluctuate proportionally.
C.Changes in beginning and ending inventory levels are insignificant in amount.
D.Sales mix will change as fixed costs increase beyond the relevant range.
Management tools that are graphs of skewed statistical distributions which display the
number of problems or defects as bars of varying lengths are called
A.Control charts.
B.Cause-and-effect charts.
C.Pareto charts.
D.All of the answers are correct.
The linked set of activities that increases the usefulness (or value) of the products or
services of an organization is the
A.direct chain.
B.indirect chain.
C.value chain.
D.variable chain.
Why are joint-process costs allocated?
A.Used for performance evaluations.
B.Used for reporting purposes.
C.Used for establishing regulated rates.
D.All of the answers are correct.
Strategic uses of activity-based management include developing strategy and which of
the following?
A.Long-range plans.
B.Focusing attention on departments.
C.Focusing attention on plants.
D.Focusing attention on managers.
Who often encounter ethical dilemmas in the budgeting process because they are
involved in the creation of the budget, and their performances are subsequently
evaluated by comparing the budget to actual results?
A.customers
B.advertising firms
C.shareholders
D.managers
Pete’s Sports Products makes caps and uniforms. It can sell all of either product it can
make. The relevant data for these two products follows:
Total fixed overhead is $240,000. The company has 100,000 machine hours available
for production. The company should select which product to maximize operating
profits?
A.Uniforms, because its contribution margin per unit is $16.
B.Uniforms, because its contribution margin per hour is $8.
C.Caps, because its contribution margin per hour is $16
D.Caps, because its contribution margin per unit is $8.
Bill’s Computer Parts has two decentralized divisions, Hardware and Pre-Fab. Pre-Fab
has always purchased certain units from Hardware at $230 per unit. Because Hardware
plans to raise the price to $260 per unit, Pre-Fab desires to purchase these units from
outside suppliers for $230 per unit. Hardware’s costs follow: variable costs per unit,
$200; annual fixed costs, $30,000. Annual production of these units for Pre-Fab is 1,500
units. If Pre-Fab buys from an outside supplier, the facilities Hardware uses to
manufacture these units would remain idle.
Required:
What would be the result if Bill’s Computer Parts’ management enforces a transfer price
of $260 per unit between Hardware and Pre-Fab?
Why does the capital investment process require audits?
Discuss the meaning of the term “break-even”. Why would a manager be concerned
with the break-even point? Does a break-even calculation provide absolute accuracy?
Why or why not? Discuss the impact of multiple products on the calculation of
break-even.
Explain the theory of constraints.
Discuss the managerial accountants’ professional environment and ethical
responsibilities.
Explain multinational transfer prices.
Fisher Products Company
The Fisher Products Company uses a job costing system. The company estimated its
annual overhead to be $100,000, and the number of direct labor hours for the year to be
20,000 hours. In the first month, the following jobs were completed:
Refer to the Fisher Products Company. What is the total manufacturing cost of job
#205?