1) which of the following items is not useful for addressing risk and uncertainty in cvp
analysis?
a.regression analysis
b.sensitivity analysis
c.what-if analysis
d.monte carlo simulation (mcs) analysis
e.decision trees and decision tables
2) sales forecasts are the first step in the budgeting process of a merchandising firm
because:
a.the revenue data are easiest to generate
b.sales information is precise in amount
c.sales personnel have the quickest access to data
d.sales forecasts are the most objective of all budgeted activities
e.almost all activities of a firm emanate from (i.e., are linked to) estimated sales
demand
3) overhead costs are allocated to cost objects in an activity-based costing system in the
following manner:
a.overhead costs are traced to departments, then costs are traced to products
b.overhead costs are traced to activities, then costs are traced to products
c.overhead costs are traced to activities, then costs are traced to departments and then
allocated to products
d.overhead costs are traced from resources to cost objects
e.none of the above
4) all of the following actions enhance the new focus on making management
accounting information more relevant in helping a firm achieve strategic goals, except:
a.increasing emphasis on the management accountant as a partner in management
decision making
b.increasing emphasis on external financial reporting
c.decreasing emphasis on financial statement analysis
d.increasing emphasis on the use of cost information for competitive advantage
5) neary co. produces three products x, y, and z from a joint process. each product may
be sold at the split-off point or processed further. additional processing requires no
special facilities, and production costs of further processing are entirely variable and
traceable to the products involved. last year all three products were processed beyond
split-off. joint production costs for the year were $80,000. sales values and costs needed
to evaluate neary’s production policy follow.
the amount of joint costs allocated to product y using the net realizable value method is
(calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and
round all dollar amounts to the nearest whole dollar):
a.$21,222
b.$24,000
c.$18,050
d.$17,155
e.$33,333
6) talamoto co. manufactures a single product that goes through two processes mixing
and cooking. the following data pertains to the mixing department for september.
material p is added at the beginning of work in the mixing department. material q is also
added in the mixing department, but not until units of product are forty percent
completed with regard to conversion. conversion costs are incurred uniformly during
the process.
the cost of goods completed and transferred out under the weighted-average method is
calculated to be:
a.$885,000
b.$882,000
c.$888,000
d.$891,000
e.$887,000
7) as a preliminary step in the selection of variables to use in a statistical-forecasting
model, the management accountant has calculated the coefficient of correlation between
the firm’s sales and three economic indexes. the results were as follows:
which of the following statements indicates the best course of action for the auditor to
take in the development of a forecasting model?
a.drop all three indexes from further consideration because a coefficient of correlation
of + 1.0 is necessary for a statistically significant relationship
b.include only indexes b and c in the model because they have the only negative
coefficients of correlation
c.include only index c in the model because its coefficient of correlation is relatively
high and therefore probably statistically significant, while the coefficients of indexes a
and b are likely to be insignificant
d.include only index a in the model because it has the only positive coefficient of
correlation
8) units accounted for includes units completed and transferred out plus:
a.beginning inventory
b.units to account for
c.ending inventory
d.units started
9) volume-based rates produce inaccurate product cost when:
a.a large share of factory overhead cost is not volume-based
b.firms produce a diverse mix of products
c.large volumes of a product are manufactured
d.both answer a and answer b are correct
e.none of the answers above is correct
10) effective implementation of activity-based costing (abc) requires:
a.normally the assistance of a consultant
b.a sophisticated and expensive computer system
c.support of top management and key employees
d.capturing properly the complexity of the data
e.abc has no significant implementation issues
11) firms should use a process costing system when they produce products that:
a.are semi-homogeneous
b.pass through a series of inspection points
c.pass through a series of manufacturing departments
d.have a small batch size
12) variable costs will generally be relevant for decision making because they:
a.differ between options
b.are volume-based
c.have not been committed and differ between options
d.differ between options and have been committed
e.measure opportunity cost
13) abc company uses a materials inventory account to record both direct and indirect
materials. abc charges direct materials to wip, while indirect materials are charged to
the factory overhead account. during the month of april, the company has the following
cost information:
the debit to the factory overhead account is:
a.$110,000
b.$30,000
c.$90,000
d.$80,000
e.$50,000