Which of the following statements concerning quality is true?
A.Quality can be inspected into a product.
B.Quality should be designed into a product.
C.Quality is continual, once achieved.
D.Quality means meeting management guidelines.
Because the cost of capital includes a premium reflecting inflation expected to occur
over the life of the asset, what should decision-makers do?
A.Ignore anticipated inflation on cash flows.
B.Consider inflation-adjusted receipts but not expenditures.
C.Consider inflation adjusted expenditures but not receipts.
D.Consider inflation-adjusted receipts and expenditures.
Peters Retail, Inc.
Peters Retail, Inc. utilizes 8,000 square feet of floor space in departments A, B, and C.
Rental of $30,000 is incurred annually for this space. Department A occupied 1,000
square feet, Department B occupied 3,000 square feet, and Department C occupied
4,000 square feet.
Refer to Peters Retail, Inc. How much of the rent expense is allocated to Department B?
A.$30,000
B.$15,000
C.$11,250
D.$ 3,750
Which is not correct for just-in-time (JIT) methods?
A.JIT attempts to obtain materials just in time for production and to provide finished
goods just in time for sale.
B.JIT reduces, or potentially eliminates, inventories and the cost of carrying them.
C.JIT compels workers to immediately correct a process making defective units.
D.JIT relies on cheap, low quality materials from multiple suppliers, to meet production
objectives.
Which product pricing factor is primarily used by the majority of Japanese, Irish, and
English companies?
A.Market-based
B.Cost-based
C.Quality-based
D.Quantity-based
Java Gourmet Coffee
Java Gourmet Coffee reports the following data for April 2010 where 200,000 pounds
of roasted gourmet coffee beans were actually produced (note: standard costs do not
allow for any wastage), Actual:
Standard:
Refer to Java Gourmet Coffee. Calculate the direct materials price variance.
A.$15,500 U
B.$10,500 U
C.$15,500 F
D.$10,500 F
The cost hierarchy categorizes costs according to whether they are capacity, product,
customer, batch, or unit costs. Management of an airline would most likely consider
new flights using existing aircraft on established routes as being which of the
following?
A.Capacity costs.
B.Product costs.
C.Batch costs.
D.Unit costs.
Deferred compensation that gives an individual the right to purchase a specified number
of shares of the company’s stock at a specified price within a specified time period
is/are called
A.stock puts.
B.stock options.
C.stock calls.
D.stock puts and stock calls.
Normal costing uses actual direct material and direct labor costs, plus an amount
representing “normal”
A.manufacturing overhead.
B.indirect overhead.
C.direct overhead.
D.selling commissions.
Which of the following represents a general framework for guiding management’s
operating decisions containing projected activity levels for the next year?
A.master budget.
B.tactical short-range profit plan
C.static budget
D.all of the above.
Describe two types of common financial fraud.
The Mega-Audits Accounting Firm uses a job costing system. For Year 6, the firm
estimated total overhead to be $80,000 and the number of direct labor hours to be
20,000. In the last quarter, the firm completed the following audit jobs:
Calculate the predetermined overhead rate.
Waterbury Box Company
General Factory Administration and Maintenance are service departments in the
Waterbury Box Company. Management has decided to allocate maintenance costs on
the basis of the area in each department and general factory administration costs on the
basis of labor hours the employees worked in each of their respective departments.
The following data appears in the company records for the current period:
Refer to the Waterbury Box Company. Use the direct method to allocate service
department costs to the operating departments.
What is the nature of common (or indirect) costs?
Describe a comprehensive master budget.
Overhead variances. Trevor, Inc., uses standard costing. The company reported the
following overhead information for the current period:
Required:
Calculate the variable and fixed overhead variances.
Jamison Connelly has discovered a problem involving the mix of lye to the dry concrete
mix that costs the company $20,500 in waste and $14,000 in lost business per period.
There are two alternative solutions. The first is to lease a new mix regulator at a cost of
$14,000 per period. The new regulator would save Jamison $14,500 in waste and
$9,500 in lost business. The second alternative is to hire an additional employee to
manually monitor the existing regulator at a cost of $12,000 per period. This would
save Jamison $10,500 in waste and $8,500 in lost business per period.
Required:
Which alternative should Jamison choose?
How do traditional managerial accounting systems need to be modified to support total
quality management?
An investment of $20,000 today will yield $8,000 a year at the end of the next three
years.
Refer to the above information. Will the project be accepted at a cost of capital of 6
percent?
What is the contribution approach alternative to return on investment for division
performance measurement?