On a balanced scorecard, the measure of profit margin would most likely be an example
of a performance measure in the:
A.financial dimension
B.customer dimension
C.internal business process dimension
D.learning and growth dimension
What can be said of the relationship between cost of goods sold and the cost of goods
manufactured when finished goods inventories increase? (Assume no change in unit
prices.)
A.They are equal.
B.Cost of Goods Sold greater than Cost of Goods Manufactured
C.Cost of Goods Manufactured greater than Cost of Goods Sold
D.Nothing can be said without additional information.
Why would the calculation of economic value added (EVA) alleviate the shortcoming
of the return on investment measurement?
A.Because it is required by generally accepted accounting principles.
B.Because it is required for Securities and Exchange Commission reporting.
C.Because it assures compliance with Internal Revenue Service Code requirements.
D.Because managers many not accept good investment opportunities if the ROI of the
investment is lower than the present ROI of the division.
Which of the following are critical success factor(s) that relate to meeting customer
requirements?
A.service.
B.quality.
C.cost.
D.All of the answers are correct.
Why do managers often have incentives for committing financial fraud?
A.Bonuses, merit pay increases, and promotions often depend on reported accounting
numbers.
B.Managers given a long-term perspective by their employment and pay arrangements
will have an incentive to “manager earnings.”
C.Bonuses, merit pay increases, and promotions often depend on reported accounting
numbers, and managers given a long-term perspective by their employment and pay
arrangements will have an incentive to “manager earnings.”
D.None of the answers is correct.
Which of the following is a method of managing production by which the firm attempts
to produce each item only as needed for the next step in the production process?
A.supply-push.
B.just-in-time.
C.demand-push.
D.economic order quantity.
Correll Company
Correll Company has two divisions, A and B. Information for each division is as
follows:
Refer to Correll Company. What is the total sales revenue for Division B?
A.$666,667.
B.$800,000.
C.$1,200,000.
D.$1,300,000.
Crimson Electronics produces high-end speakers that sell for $1,300. During April, total
operating expenses were:
Required:
a. Use account analysis to determine fixed cost per month and variable cost per TV.
b. Project total cost for May assuming production and sales of 180 units.
c. What is the contribution margin per TV?
d. Estimate total profit assuming production and sales of 180 units.
Which of the following is not one of the factors that companies using JIT find essential
for JIT to work?
A.short customer-response times.
B.backlog of orders.
C.economic-order quantities for inventory.
D.reliable suppliers.
Which statement is true concerning depreciation?
A.Depreciation does not affect after-tax cash flow.
B.Depreciation should be considered in the cash flow analysis.
C.Depreciation is not affected by income tax laws which specify the allowable methods.
D.Depreciation is a method used in financial accounting to allocate the cost of an asset
over its useful life, but has no application for managerial accounting purposes.
Total quality costs include
PreventionCarryingAppraisal
A.Yes Yes Yes
B.No No Yes
C.Yes No No
D.Yes No Yes
Which of the following statements is true concerning total variable costs?
A.Total variable costs do not vary in total within the relevant range.
B.Total variable costs vary in total in proportion to the activity level.
C.Total variable costs vary in total in an inverse relationship with production.
D.Total variable costs vary in total, but not in proportion to changes in the activity level.
Which of these is a common type of fraud on financial statements?
A.overstating inventory.
B.overstating cash.
C.understating inventory.
D.overstating cost of goods sold.
An incentive plan model for accurate reporting should have which of the following
component(s)?
A.it relates rewards positively to forecasted sales.
B.it provides incentives for the sales manager to decrease sales beyond the forecast.
C.it penalizes the sales manager when sales are more than forecasted.
D.none of the above
Which of the following terms describes the difference between the budgeted (or
standard) price and the actual price paid for each unit of input?
A.Price variance.
B.Efficiency variance.
C.Usage variance.
D.Quantity variance.
When measuring a division’s operating costs, thesalary of the division manager
(controlled by top management) is
A.direct, controllable.
B.indirect, controllable.
C.direct, noncontrollable.
D.indirect, noncontrollable.
Which of the following is not a fraudulent practice for assigning costs?
A.Misstating the stage of completion of jobs
B.Charging costs to the wrong jobs or categories
C.Comparing actual with estimated costs for pricing future jobs
D.Misrepresenting the costs of jobs
Reporting costs of quality. Fallows Corporation manufactures freezers. The following
table presents financial information for two years.
Required:
Using the data, prepare a cost of quality report for Year 1 and Year 2.
Malone, an auto mechanic, left his $35,000-a-year job at Jim’s Garage, which provided
additional health care insurance benefits of $5,000 a year, and he became an opera
singer. Malone now draws an annual salary of $25,000 and pays for his own health care
insurance of $3,500 a year with the Orlando Opera Company. Identify his opportunity
costs.
Crown Corporation
Crown Corporation has agreed to sell some used computer equipment to Bob Parsons,
one of the company’s employees, for $5,000.
Refer to Crown Corporation. What would the present value of the note be if Parsons
agreed to the immediate down payment of $1,000 but would like the note for $4,000 to
be payable in full at the end of the fourth year? The increased risk associated with the
terms of this note changes the discount rate to 8 percent.
What are the costs of producing joint products and the relevant costs for decisions to
sell or process further?
Identify the use of economic order quantity model.