1) orange computer co. is quickly becoming a major player in the personal computer
market. the company currently has multiple companies producing products that go into
an orange computer. this practice of having an outside firm provide a function for
orange computer co. is called:
a.outsourcing
b.opportunity costing
c.profitability maximization
d.strategic positioning
e.multivariate sourcing
2) which one of the following shows the direct materials required for production and
their budgeted cost?
a.direct materials usage budget
b.budgeted cost of goods sold
c.direct materials purchases budget
d.production budget
e.direct materials cost budget
3) the income statement for a manufacturing company includes:
a.indirect labor, factory overhead, and total manufacturing cost
b.total manufacturing cost and cost of goods sold
c.indirect materials, factory overhead, and cost of goods manufactured
d.indirect labor, indirect materials and cost of goods sold
e.none of the above
4) which of the following is a description of categorizing related customer costs into
cost pools on the basis of cost drivers?
a.customer revenue analysis
b.customer cost analysis
c.customer profitability analysis
d.customer value assessment
e.customer equity analysis
5) shaver co. manufactures a variety of electric razors for men and women. the
company’s plant is partially automated. listed below is cost driver information used in
the product-costing system:
in addition, shaver expects to spend $514,368 for 8,037 direct labor-hours. two current
product orders had the following requirements:
using abc, how much product-level overhead is assigned to the current order for
women’s razors?
a.$218.00
b.$250.70
c.$331.20
d.$284.00
e.$288.00
6) stoltenberg co. had the following information for the month of june:
beginning work-in-process inventory is 30 percent complete as to conversion. ending
work-in-process inventory is 50 percent complete as to conversion. materials are added
at the end of the process.
how many units were completed in june?
a.12,000
b.10,000
c.14,000
d.16,000
e.18,000
7) information pertaining to yekstop corp.’s sales revenue is presented below.
management estimates that 4% of credit sales are eventually uncollectible. of the
collectible credit sales, 65% are likely to be collected in the month of sale and the
remainder in the month following the sale. the company desires to begin each month
with an inventory equal to 75% of the sales projected for the month. all purchases of
inventory are on open account; 30% will be paid in the month of purchase, and the
remainder paid in the month following the month of purchase. the purchase costs are
approximately 60% of the selling prices.
total budgeted cash collections in january by yekstop corp. are:
a.$556,512
b.$375,216
c.$421,728
d.$464,006
e.$502,568
8) beth johnson was recently appointed vice president of administration in the sigma
group, a nationwide personal financial planning services firm. ann garber, department
manager, has just finished reading the most recent memo from vp johnson, which reads
in part:
in order to more efficiently apportion the costs of hard copy duplication, departments
will be charged $0.075 per page for all duplicated materials. this new rate replaces the
two-tier rate structures of $0.05 and $0.10 per page, and is effective as of the date of
this memo. the two tier system was used to charge a higher rate for the more difficult
jobs.
“what is she trying to do?” ann asks. “this new price will drive up my department’s
duplicating costs so much that we’ll have to cut back on how much stuff we have
duplicated.”
required:
a. what is the control advantage of any multi-tier pricing (costing) system versus a
single price (cost) system?
b. if the new price for duplication reduces total usage of duplicating services, are there
any significant disadvantages to such a reduction in usage?
9) value streams are useful in decision-making because:
a.they identify all value-added products and services
b.they help to highlight the improved efficiency in the plant
c.special orders can be evaluated within the context of the value stream
d.irrelevant costs are identified
e.lean thinking produces better decision making
10) when gathering activity data, which of the following would not be a question that
abc project team members typically ask employees or managers?
a.time spent performing the activity
b.resources required for the activity
c.where the activity takes place
d.value the activity has for the customer
11) which of the following is required for multiple regression?
a.the use of dummy variables
b.the use of more than one cost driver
c.the use of more than one dependent variable
d.the use of a trend variable
e.the use of multiple sets of data
12) general corporate sales expenditures are:
a.customer unit-level costs
b.customer batch-level costs
c.customer-sustaining costs
d.distribution-channel costs
e.sales-sustaining costs
13) the long term care plus company has two service departments actuarial and
premium rating, and two production departments marketing and sales. 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 sales department using the step method is (calculate all
ratios and percentages to 2 decimal places, for example 33.33%, and round all dollar
amounts to the nearest whole dollar):
a.$100,000
b.$104,000
c.$126,000
d.$130,000
e.$135,000
14) for the current year, power cords corp. expected to sell 42,000 industrial power
cords. fixed costs were expected to total $1,650,000; unit sales price was expected to be
$3,750; and unit variable costs were budgeted at $2,250.
power cords corp.’s margin of safety (mos) in units is:
a.48,800
b.39,000
c.40,900
d.36,100
e.32,500
15) the opportunity cost of making a component part in a factory with no excess
capacity is the:
a.variable manufacturing cost of the component
b.fixed manufacturing cost of the component
c.total manufacturing cost of the component
d.cost of the production given up in order to manufacture the component
e.net benefit foregone from the best alternative use of the capacity required
16) the form of the income statement that is used in cvp analysis is referred to as:
a.an activity-based cost (abc) income statement
b.a contribution income statement
c.an absorption costing income statement
d.a flexible-budget income statement
e.a segment profitability report