1) zapvideo inc. produces two basic types of video games, clash and slash. pertinent
data follow:
there is insufficient labor capacity in the plant to meet the combined demand for both
clash and slash.
both products are produced through the same production departments.
in view of the labor shortage, which of the two products is most profitable, and how
much is the contribution margin, per direct labor hour?
a.slash, $23.00
b.clash, $18.00
c.slash, $11.50
d.slash, $11.00
e.clash, $10.50
2) which of the following aspects of a company would not be considered a critical
success factor, for a company that competes on differentiation?
a.cutting edge research and development
b.excellent customer service
c.award-winning product quality
d.continually beating competitors to the market with new, innovative products
e.a high level of production efficiency
3) when using cost-volume-profit (cvp) analysis, the following information helps to
show how decisions affect operating income except:
a.variable costs
b.fixed costs
c.output level
d.gross margin
e.sales volume
4) activity-based costing for manufacturing operations is used to assign:
a.direct material and direct labor costs to products
b.direct labor and manufacturing overhead costs to products
c.manufacturing overhead costs to products
d.selling and general administrative overhead costs to products
e.selling and general administrative overhead and manufacturing overhead costs to
products
5) graham corporation’s budgeted production schedule for the coming year is as
follows:
quarter 1 = 22,500 units
quarter 2 = 19,000 units
quarter 3 = 17,000 units
quarter 4 = 24,000 units
each unit of product requires three pounds of direct material. the company’s policy is to
begin each quarter with 30% of that quarter’s direct materials production requirements.
graham expects to have 50,000 pounds of direct materials on hand at the beginning of
quarter 1 .
what would be graham’s budgeted direct materials purchases in the third quarter?
a.19,100 pounds
b.44,700 pounds
c.51,000 pounds
d.57,300 pounds
e.72,600 pounds
6) capital one produces a single product, which it sells for $8.00 per unit. variable costs
per unit equal $3.20. the company expected total short-term fixed costs to be $7,200 for
the coming month, at the projected sales level of 20,000 units. management is
considering several alternative actions designed to improve operating results. in
conjunction with this, they have created a profit-planning model, which can be used to
evaluate different scenarios.
capital one’s management believes that a 10% reduction in the selling price will
increase sales volume by 10%. if this plan is implemented, then:
a.profit should increase by approximately $8,000 per month
b.profit should remain approximately the same
c.profit should decrease by approximately $8,000 per month
d.profit should decrease by approximately $16,000 per month
e.profit should increase by approximately $16,000 per month
7) in deciding whether to drop or keep a product line, all of the following are relevant to
the decision except:
a.the level of unavoidable fixed costs
b.the segment margin generated by the product line
c.demand interdependencies across product lines of the company
d.effect of the decision on overall company morale
e.whether dropping the product line today would eliminate future options for growth
and expansion
8) crown co. can produce two types of lamps, the enlightner and foglighter. the data on
the two lamp models are as follows:
it takes one machine hour to produce each product. total fixed costs for the manufacture
of both products are $90,000. demand is high enough for either product to keep the
plant operating at maximum capacity.
assuming that sales mix remains constant in units, what is the breakeven point in total
units? (round intermediate calculations to 2 decimal places and final answer to the
nearest whole number.)
a.687
b.711
c.805
d.945
e.1,006
9) due in part to increased global competitiveness and changes in management
techniques and processes, what has changed about the role of the management
accountant?
a.management accountants have started to place a greater emphasis on financial
information, in order to promote continued growth in earnings
b.rather than to focus on problems within functions (such as a marketing problem or a
production problem), management accountants are using a strategic approach to address
problems in a cross-functional manner
c.management accountants have developed a variety of new techniques to measure
functional area performance
d.there has been a renewed emphasis on short-term profitability, since product life
cycles have started getting shorter
10) time-driven abc provides a direct way to measure:
a.production efficiency
b.unused capacity
c.product line profitability
d.value-adding activities
e.customer value
11) abc costing helps an organization implement its strategy through all of the following
means except:
a.providing accurate cost information
b.identifying the most profitable products and customers
c.helping improve cycle time
d.identifying value added and non-value added activities
e.providing a basis for effective utilization of capacity
12) in swot analysis, strengths and weaknesses are most easily identified by looking:
a.at the firm as a potential customer
b.inside the firm at its specific resources
c.at the firm’s competition
d.at the firm’s product
e.outside the firm from a consultant’s perspective
13) gorberchev food processing expects to have 20,000 units of finished goods
inventory on hand on march 31 and reports the following expected sales (in units) for
the first four months:
at the end of each month the company desires its finished goods ending inventory to be
20% of the next month’s projected sales (in units).
the budgeted production (in units) for gorberchev food processing for april should be:
a.112,000
b.120,000
c.127,200
d.128,000
e.142,000
14) in a joint production process, the allocation of joint (common) costs to the joint
products is needed:
a.to meet external reporting requirements (i.e., for financial statement preparation
purposes)
b.to determine whether the firm in question should produce at all
c.to assess managerial performance
d.to determine which products, if any, should be produced beyond the split-off point
e.for short-term decision-making purposes
15) volume-based overhead rates may cause undesirable strategic effects such as:
a.incorrect decisions
b.unprofitable cross-subsidization of products
c.ineffective management of operations for process improvement
d.answers a, b and c are all correct
e.none of the answers above is correct
16) 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.
total equivalent units for material p under the weighted-average method are calculated
to be:
a.104,000 equivalent units
b.71,600 equivalent units
c.85,400 equivalent units
d.72,000 equivalent units
e.94,000 equivalent units
17) which of the following most accurately describes what is included in cost
management information?
a.only the most up-to-date, accurate financial information available on a firm
b.all the non-financial information about a firm researched and analyzed for a minimum
of 2 years
c.a combination of financial information and relevant non-financial information
d.a detailed report outlining how management currently handles all of a company’s
costs, and the changes it intends to make in the future
18) the main objective(s) of internal accounting controls is/are:
a.to increase customer satisfaction
b.to increase revenue
c.to prevent or detect errors and fraudulent acts
d.to facilitate new product lines
e.to increase employee morale