1) in performing activity analysis during the design of an activity-based costing system
(abc), the management accountant studies:
a.the cost drivers and managers in the plant
b.the advice of operation-level managers
c.the resources, activities and cost drivers in the operation
d.the cost allocation methods applicable to the firm
e.the implementation problems for an abc system
2) the effect of increasing the targeted (i.e., desired) ending inventory for a given budget
period has the following effect on the production budget for the period:
a.increases the required production for the budget period
b.has no effect on the required production for the budget period
c.has an indeterminate effect (i.e., additional information is required)
d.none of the above
3) national inc. manufactures two models of cmd that can be used as cell phones, mpx,
and digital camcorders.
national uses a volume-based costing system to apply factory overhead based on direct
labor dollars. the unit prime costs of each product were as follows:
national’s controller had been researching activity-based costing and decided to switch
to it. a special study determined national’s two products have the following budgeted
activities:
using activity-based costing, applied machinery overhead for the high f model per unit
is (rounded to the nearest cent):
a.$6.13
b.$11.86
c.$16.28
d.$32.46
e.$66.73
4) for a simple regression analysis model that is used to allocate factory overhead, an
internal auditor finds that the intersection of the line of best fit for the overhead
allocation with the y-axis is $5,000. the slope of the line is .20 . the independent
variable, factory wages, amounts to $900,000 for the month. what is the estimated
amount of factory overhead to be allocated for the month?
a.$65,000
b.$180,000
c.$230,000
d.$92,500
e.$185,000
5) a data point that is outside the normal distribution of data is called an “outlier,” which
is often removed from the data before analysis because it:
a.leads to inaccurate calculations
b.can distort the results of the data analysis
c.has an upward bias on the statistical measures in regression
d.will always add bias to the results of a high-low analysis
6) the name for a variety of methods used to examine how an amount will change if
factors involved in predicting that amount change is:
a.sensitivity analysis
b.contribution margin analysis
c.factor analysis
d.cost analysis
e.cost-volume-profit analysis
7) 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.
cost per equivalent unit for material p under the weighted-average method is calculated
to be:
a.$5.10
b.$2.60
c.$2.50
d.$2.30
e.$5.40
8) operation costing is a hybrid costing system for products and services that uses:
a.job costing to assign direct material costs and standard costing for conversion cost
b.process costing to assign conversion costs and normal costing for materials cost
c.job costing for direct materials costs and process costing for conversion cost
d.normal costing for conversion cost and process costing for materials cost
9) tierney construction, inc. recently lost a portion of its financial records in an office
theft. the following accounting information remained in the office files:
direct labor cost incurred during the period amounted to 2.5 times the factory overhead.
the cfo of tierney construction, inc. has asked you to recalculate the following accounts
and to report to him by the end of tomorrow.
what should be the amount of direct materials purchased?
a.$28,000
b.$19,000
c.$15,000
d.$12,000
10) customer lifetime value is a type of analysis used to:
a.assess the ethical practices of each salesperson-customer relationship
b.assess the current profit potential of a customer
c.assess the long term profit potential of a customer
d.assess the current profit potential of all the firm’s customers
e.assess the long term profit potential of all the firm’s customers
11) burmer co. has accumulated data to use in preparing its annual profit plan for the
upcoming year. the cost behavior pattern of the maintenance costs must be determined.
data regarding the machine hours and maintenance costs for the last year and the results
of the regression analysis are as follows:
a staff assistant has run regression analyses on the data and obtained the following
output using excel:
regression analysis
y (dependent) variable: maintenance cost
x (independent) variable: maintenance hours
the t statistic for the independent variable:
a.is statistically significant at less than 5% risk
b.at 11.46, is statistically significant
c.at 52.78, is too large to be statistically significant
d.lies somewhere between 6.49 and 7.063
12) non-financial measures of operations include all the following except:
a.stock price
b.product quality
c.customer satisfaction
d.market share
e.growth opportunities
13) which of the following subjects would be found on the financial perspective section
of a balanced scorecard?
a.liquidity
b.sales penetration
c.efficiency of manufacturing
d.price
14) by-product costing approaches include:
a.activity-based approach
b.cost approach
c.asset recognition approach
d.resource consumption approach
e.sales value at split off approach
15) which of following statements is/are true concerning strategic positioning?
a.once a firm has chosen a position, it is unwise to change it, even though the company
or business environment might change
b.if a firm does decide to compete on more than one strategic position, it must carefully
execute both strategies to be successful
c.since the business environment is always changing, rather than stick constantly with
one strategic position, firms should pay close attention during times of change, and
adjust their strategies accordingly
d.a firm following both competitive strategies is likely to succeed only if it achieves one
of them significantly
16) studebaker corporation, one of the earliest auto manufacturers, prospered in the late
1940’s and into the 1950’s. its advertising after world war ii emphasized quality of
design and production. the corporation also used the stability of its work force in its
advertisements, often featuring pictures of father and son working side by side in its
factories.
required:
(a) from just this brief description of studebaker corporation, which type of competitive
strategy–cost leadership or differentiation,–would you guess studebaker was using?
explain your choice.
(b) given your answer in part (a), speculate on what market factors might have caused
the corporation to go into bankruptcy and cease production in the mid-1960s.
17) in a sell-or-process-further decision, joint production costs:
a.are irrelevant to the decision
b.should be allocated to outputs on the basis of relative sales dollars
c.should be allocated to outputs on the basis of relative physical units
d.cannot be allocated to products for financial reporting purposes
e.usually are traceable to individual products/outputs
18) a useful device for solving production problems involving multiple products and
limited resources is:
a.gross profit per unit of product
b.contribution per unit of scarce resource
c.value-stream costing
d.relevant cost pricing
e.the contribution income statement
19) due to the sluggish economy, the bi-wheels company has experienced some
difficulty in selling its bicycles. the following data relate to the current year:
required:
1> compute bi-wheels’ annual breakeven point, in both units and dollars. also, compute
the contribution margin ratio.
2> the manager believes that a $40,000 increase in advertising would result in a
$120,000 increase in annual sales. if the manager is right, what will be the effect on the
company’s operating income?
3> refer to the original data. the vice-president in charge of sales is certain that a 10%
reduction in selling price in combination with a $30,000 increase in advertising will
cause sales volume to increases by 50%. what effect would this strategy have on
operating income of the company?
4> refer to the original data. in the following year, bi-wheels saved $5 of total variable
costs per bicycle by buying parts from a different manufacturer. however, bi-wheels’
rent and insurance increased by $5,600. the store sold 11,000 bikes. what was its
operating income for the year?
20) the five steps of strategic decision making include all of the following except:
a.identify the alternative actions
b.gather, summarize, and report accounting information
c.determine the strategic issues surrounding the problem
d.choose and implement the desired alternative
e.provide an ongoing evaluation of the effectiveness of implementation