High-pressure performance evaluation systems not only put pressure on people to
perform well but also create incentives to
A.be motivated.
B.”manage earnings.”
C.leave the company.
D.None of the answers is correct.
Which statement is true concerning negotiated transfer pricing?
A.It preserves the autonomy of the division managers.
B.It does not preserve the autonomy of the division managers.
C.It violates generally accepted accounting principles.
D.It is the same as centrally administered transfer pricing.
Which of the following is a method of managing purchasing, production, and sales, by
which the firm attempts to time purchases so that items arrive just in time for sale or
production?
A.total quality management.
B.flexible manufacturing practices.
C.just-in-time inventory.
D.theory of constraints.
Which of the following is an example of performance measures used to measure
customer satisfaction with quality?
A.Number of Customers
B.Customer satisfaction surveys
C.Amount of purchases per customer
D.Number of defective products per 1000 units produced
How do you calculate economic value added (EVA) and how is it used?
Lydia’s Delivery Company
Lydia’s Delivery Company reports the following information for 2010:
Actual:
Standard:
Refer to Lydia’s Delivery Company. What is the variable overhead price variance for
fuel costs?
A.$10.00 U
B.$16.00 F
C.$26.00 F
D.$ 6.00F
When will the contribution margin ratio increase?
A.when the break-even point increases.
B.when the break-even point decreases.
C.when the variable expenses as a percentage of sales decrease.
D.when the variable expenses as a percentage of sales increase.
Little League Baseball Manufacturer
The Little League Baseball Manufacturer purchases materials for the production of
customized little league baseball bats, hires workers to convert the materials to
customized finished baseball bats, and then offers the customized baseball bats for sale
to little league teams and the general public.
Refer to Little League Baseball Manufacturer.
Manufacturing costs, such as the wages for janitorial staff to sweep and mop the floors,
that are not easily traced to a specific customized baseball bat fall into which of the
following categories?
A.direct material costs.
B.direct labor costs.
C.manufacturing overhead costs.
D.opportunity costs.
Resources used versus resources supplied. Selected information about resources for
Farris Industries, which produces various products, is as follows:
Required:
a. Prepare an activity-based management income statement (e.g., Exhibit 3.9).
b. Write a short report stating why managers should know the difference between
resources used and resources supplied. Give examples of how managers could use the
information about resources used and resources supplied.
c. Management wants to keep the cost of unused capacity to less than 20 percent of total
costs. How well is the company doing?
Stephanie Company
Stephanie Company has two production departments: D and J. Stephanie also has 3
service departments: Personnel, Administration, and Shipping. Shipping costs are
allocated on the basis of number of packages, while Personnel and Administration costs
are allocated using number of employees. Assume that the ranking of the benefits
provided is in the order listed below.
Refer to Stephanie Company. Using the direct method, what amount of Shipping costs
is allocated to Department J (rounded to the nearest $)?
A.$ 63,636
B.$318,182
C.$381,818
D.$450,000
Which of the following is the process by which the costs of operating the human
resources, accounting, computer support, and maintenance departments are allocated to
other departments?
A.direct department cost allocation.
B.producing department cost allocation.
C.service department cost allocation.
D.common department cost allocation.
Pricing and bidding, contract cost reimbursement, and motivation are reasons for
A.allocating common costs to departments and products.
B.allocating common costs to service departments, only.
C.not allocating common costs to departments and products.
D.not allocating common costs to production departments.
The service department cost allocation methodology that begins with the service
department that receives the smallest dollar amount of service from the other service
departments has its costs allocated to the other service and production departments, then
distributes the total costs of the service department receiving the next smallest amount
of service from other service departments, and so on is called the
A.wave method.
B.activity-based method.
C.step method.
D.pass along method.
Charley’s Products allocates telephone expenses based on a variable rate of $1 per
phone call. It allocates the fixed monthly charge equally over its budgeted usage. Able
Division expected to make 300 telephone calls, but actually made 350. Baker Division
expected to make 300 telephone calls, but actually made 250. Actual fixed costs for the
month totaled $3,000. What are the amounts allocated to the two divisions using a dual
rate of allocation?
A.Able Division = $2,259, Baker Division = $1,291
B.Able Division = $2,209, Baker Division = $1,391
C.Able Division = $1,850, Baker Division = $1,750
D.Able Division = $1,800, Baker Division = $1,800
What is true of the Foreign Corrupt Practices Act?
A.It is illegal for any U.S. citizen or company to bribe foreign government officials in
the course of business.
B.Questionable payments to foreign officials, record keeping, and internal accounting
control are addressed.
C.”Grease payments” paid to low-level foreign government employees to expedite
routine matters are permitted.
D.All of the answers are correct.