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1) the mathematical tool used to determine the optimum short-term product (or service)
mix is:
a.linear regression (i.e., ordinary least-squares) analysis
b.linear programming
c.linear ratio analysis
d.pareto optimality analysis
e.nonlinear cost-benefit analysis
2) based on analyzing the relationship of total factory overhead (y) to direct labor hours
(x). the following relationship was found:
y = $1,000 + $2x
the $2 in the equation is an estimate of:
a.total fixed costs
b.variable overhead costs per direct labor hour
c.total overhead costs
d.fixed overhead costs per direct labor hour
3) a master budget is typically prepared for:
a.a period of one year
b.top management only
c.strategic planning purposes only
d.strategic business units only
e.operating activities only
4) oracle supply co. supply forecasts purchases of 15,000 widgets in june. it sells the
widget at $12.00 per unit. the company has 1,000 units on hand on june 1 . the desired
ending inventory of widgets on june 30 is to be 20% lower than the beginning
inventory. total june sales for widgets are anticipated to be (in dollars):
a.$177,600
b.$180,000
c.$182,400
d.$189,600
e.$192,000
5) plainfield company manufactures part g for use in its production cycle. the costs per
unit for 10,000 units of part g are as follows:
verona company has offered to sell plainfield 10,000 units of part g for $30 per unit. if
plainfield accepts verona's offer, the released facilities could be used to save $45,000 in
relevant costs in the manufacture of part h. in addition, $5 per unit of the fixed overhead
applied to part g would be totally eliminated. what alternative is more desirable and by
what amount?
a.option a
b.option b
c.option c
d.option d
6) the following data pertains to lam co.'s manufacturing operations:
additional information for the month of april:
overhead is applied at $12 per direct labor hour.
if the volume of production is increased over the level planned, the cost per unit would
be expected to:
a.decrease for fixed costs and remain unchanged for variable costs
b.remain unchanged for fixed costs and increase for variable costs
c.decrease for fixed costs and increase for variable costs
d.increase for fixed costs and increase for variable costs
7) headlines publishing company (hpc) specializes in international business news
publications. its principal product is hpc-monthly, which is mailed to subscribers the
first week of each month. a weekly version, called hpc-weekly, is also available to
subscribers over the web at a higher cost. sixty percent of hpc's subscribers are
nondomestic customers. the company experienced a fast growth in subscribers in its
first few years of operation, but sales have begun to slow in recent years as new
competitors have entered the market. hpc has the following cost structure and sales
revenue for its subscription operations on a yearly basis. all costs and all subscription
fees are in u.s. dollars.
required: use these data to determine the following:
1> contribution margin per unit for weekly and monthly subscriptions.
2> contribution margin ratio for weekly and monthly subscriptions.
3> hpc's breakeven point in annual sales units and sales dollars (round answers up, to
nearest whole number).
4> hpc's required sales to reach a target before-tax profit of $75,000 for the year. what
is the breakdown of this overall level of subscriptions into weekly and monthly
subscriptions?
5> what are the critical success factors for hpc? for its domestic subscribers? for its
international subscribers? how can cvp analysis be used to make hpc more competitive?
8) staley co. manufactures computer monitors. the following is a summary of its basic
cost and revenue data:
assume that staley co. is currently selling 600 computer monitors per month and
monthly fixed costs are $80,000.
staley co.'s operating income is calculated to be:
a.$19,800
b.$21,800
c.$24,800
d.$23,800
e.$20,800
9) matrix inc. calculates cost for an equivalent unit of production using both the
weighted-average and the fifo methods.
cost per equivalent unit for conversion under the fifo method is calculated to be:
a.$2.00
b.$2.40
c.$3.00
d.$3.10
e.$3.20
10) which of the following is not considered part of the institute of management
accountants' definition of management accounting?
a.partnering in management decision making
b.devising planning and performance management systems
c.analyzing data and providing information
d.providing expertise in financial reporting and control
e.assisting management in the formulation and implementation of an organization's
strategy
11) sutherland company listed the following data for 2013:
assuming sutherland applied overhead based on direct labor hours, the company's
predetermined overhead rate for 2013 is (round to two significant digits):
a.$23.20 per direct labor hour
b.$23.60 per direct labor hour
c.$22.24 per direct labor hour
d.$22.50 per direct labor hour
e.$22.85 per direct labor hour
12) which of the following is not used for evaluating a regression analysis?
a.correlation
b.t-value
c.r-squared
d.standard error
e.multicollinearity
13) the proper treatment of the cost of unused capacity, as identified through the use of
an activity-based budgeting (abb) system, is:
a.to charge the amount to customers whose uneven orders caused the unused capacity
b.to charge the amount to a "deferred asset" account on the balance sheet
c.to change the amount to a "deferred credit" account on the balance sheet
d.to charge the amount to all products produced during the area (via overhead
application rates)
e.to charge the amount to the product line, department, or a given manager within the
organization where the decision to acquire the capacity was made
14) you just bought a new car for $125,000. before you had time to get insurance, the
car was wrecked. weird wally offers to take it off your hands for $10,000. you can then
purchase a similar model for $128,000. a body-shop with an excellent reputation offers
to rebuild it for $90,000 and loan you a similar model while the vehicle is being rebuilt.
once rebuilt, the body-shop claims, it will run like a new car and nobody will be able to
tell the difference. what would you do from a financial point of view?
a.rebuild to save $13,000
b.rebuild to save $28,000
c.rebuild to save $38,000
d.sell to weird wally and save $7,000
15) the merchant manufacturing company has two service departments purchasing and
maintenance, and two production departments fabrication and assembly. the distribution
of each service department's efforts to the other departments is shown below:
the direct operating costs of the departments (including both variable and fixed costs)
were as follows:
the total cost accumulated in the fabrication department using the direct 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.$102,750
b.$114,600
c.$87,000
d.$131,250
e.$135,000
16) after critical success factors (csfs) have been identified, the next step in developing
a competitive strategy is to develop relevant and reliable measure for these cfss. these
measures are important to help the organization:
a.make profit for any extended period
b.increase sales above previous year(s)
c.develop policies to enhance customer profitability
d.improve productivity in selected product areas
e.monitor progress toward achieving strategic goals
