What is the term that describes the rate companies frequently use to apply fixed
overhead costs to units produced?
A.Actual overhead rate.
B.Predetermined overhead rate.
C.Post-determined overhead rate.
D.Variable overhead rate.
Which of the following statements is true concerning discretionary costs?
A.Discretionary costs cannot be avoided in the short run.
B.Discretionary costs are usually essential for achieving long-run goals.
C.Discretionary costs include payments to government agencies.
D.All of the answers are correct.
Which of the following statements is true concerning the variable component of power
cost?
A.This cost would be categorized as a unit level activity.
B.This cost would be categorized as a cost which varies in total with the unit level of
output.
C.This cost would be categorized as a facility-related cost.
D.both “a” and “b”
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 Administration
costs is allocated to Department D (rounded to the nearest $)?
A.$ 97,561
B.$320,000
C.$400,000
D.$444,444
What is the firststep in the activity analysis process used to implement Activity Based
Management?
A.Chart, from start to finish, the activities used to complete the product or service
B.Classify activities as value-added or non-value-added
C.Eliminate non-value-added activities
D.Continuously improve and reevaluate the efficiency of value-added activities or
replace them with more efficient activities
What happens to the contribution margin if fixed expenses decrease while variable cost
per unit remain constant.
A.Contribution margin will be unchanged.
B.Contribution margin will be higher.
C.Contribution margin will be lower.
D.Cannot determine the change.
The new quality-based view includes which of the following?
A.waiting for inspections of finished products.
B.reworking defective goods.
C.establishing quality at the beginning of the process.
D.incurring less than 3 percent defects is a reasonable goal.
Which costing system uses equivalent units in the computation of costs?
A.Job costing
B.Process costing
C.Both a and b
D.Neither a nor b
Which of the following companies would most likely use a process costing system?
A.PriceWaterhouseCoopers (auditing engagements)
B.Accenture (consulting)
C.Universal Studios (movies)
D.Miller Brewing Company (beer)
Target costs equal which of the following?
A.target prices minus target profits.
B.fixed costs plus variable costs.
C.prime costs plus conversion costs.
D.opportunity cost plus cost of capital.
The decision to accept or reject an investment proposal can be made using either the
internal rate of return method or the net present value method under most
circumstances. The following is/are circumstance(s) that may arise where the two
methods need not give the same answer and the net present value method’s answer is
always the correct one.
A.mutually exclusive projects.
B.projects with different lifetimes.
C.projects with intermixing of inflows and outflows.
D.all of the above are possible circumstances.
Compare and contrast the functions of the controller, internal auditor, and treasurer. Can
one person effectively perform all of these functions in a small business?
Data from the duplicating department of Easton Company for the last nine months are
as follows:
Review the actual data and the regression output above. Do you think the data could be
improved by removing any outliers? If so, identify likely outliers from the data given
and state reasons why you would remove them. Would removing these data points
change the regression output? How? Give reasons for the change and direction the
values may move. Give reasons why you might want to leave the data as is.
The following equation is used for determining cost-volume-profit relationships by
firms
Total Cost = (Unit-
Describe how analysts estimate cost behavior using regression, account analysis, and
engineering methods.
Compare the traditional and the new quality-based view.