The value chain component related to the suppliers and production does not include
costs for:
A.Receipt of direct materials from suppliers.
B.Production set-up.
C.Direct production labor.
D.Salaries for sales personnel.
What is the formula for the Target Profit in Units?
A.Total Fixed Costs / Unit Contribution Margin.
B.(Total Fixed Costs + Target Profit) / Unit Contribution Margin.
C.Sales Units – Break-Even Sales Units.
D.None of the answers is correct.
Which of the following is true?
A.In job costing, firms collect costs for each “unit” produced.
B.In process costing, firms accumulate costs in a department or production process
during the accounting period, then spread those costs evenly over the units produced
that period, computing an average unit cost.
C.Process costing does not require as much record keeping as job costing system
because it does not require keeping track of the cost of each job.
D.All of the answers are correct.
What does the term capitalmean in the context of making capital expenditure decisions?
A.long-term assets.
B.the funds with which a firm acquires assets.
C.the source of funds typically reported as long-term liabilities and owners’ equity.
D.None of the above.
Mitch’s Microbrew’s regular selling price for a case of its product is $6. Variable costs
are $4 per case. Fixed costs total $1 per case based on 100,000 cases, and remain
unchanged within the relevant range of 50,000 cases to total capacity of 200,000 cases.
After sales of 80,000 cases were projected for the year, a special order was received for
an additional 10,000 cases. What is the minimum selling price for the special order?
A.$3.
B.$4.
C.$5.
D.$6.
Which of the following is a reason for using activity-based costing to allocate service
department costs?
A.It can lead to improved allocation of service department costs to production
departments.
B.It is required by generally accepted accounting principles.
C.It is required by the tax authorities.
D.All of the answers are correct.
What effect would an increase in the selling price of the product have on the break-even
point and the contribution margin?
Break-even Point Contribution Margin
A. Increase Increase
B. Increase Decrease
C. Decrease Increase
D. Decrease Decrease
External financial statements
A.promote internal management planning and decision making.
B.do not show variable and fixed costs.
C.are not in accordance with generally accepted accounting principles.
D.show direct and indirect costs.
Integrated information processing systems that tie together managerial accounting,
financial reporting, customer databases, supply chain management and other data bases
are
A.not technically feasible.
B.required by the Internal Revenue Service regulations.
C.not in accordance with generally accepted accounting principles.
D.now commercially available.
Which of the following is a weakness of the regression method of cost estimation?
A.The method is not particularly useful when the physical relation between inputs and
outputs is indirect.
B.The method is subjective.
C.The method requires that several relatively strict assumptions be satisfied.
D.The method is based on studies of what future costs should be rather than what past
costs have been.
TopSail Company
TopSail Company produces one type of machine with the following costs and revenues
for the year
Refer to the TopSail Company. Calculate the variable cost per unit.
A.$ 6
B.$ 2
C.$ 4
D.$12
Because tax rates are different in various states within the United States, companies
have incentives to set transfer prices that will
A.increase revenues in low-tax states.
B.decrease costs in high-tax states.
C.decrease revenues in low-tax states.
D.None of the answers is correct.
Which of the following is the correct formula for the break-even sales volume?
A.Fixed costs divided by the variable costs per unit.
B.Fixed costs divided by the contribution margin per unit.
C.Variable costs divided by the contribution margin per unit.
D.Variable costs divided by the fixed costs per unit.
What should a firm do to justify or reject investments in advanced manufacturing
systems?
A.only uses discounted cash flow analysis.
B.only use perfect estimates of tangible costs and benefits.
C.establish a high discount or cut-off rate
D.make a judgement that recognizes both quantifiable and nonquantifiable benefits.
The costing process that (1) measures each service department’s resource spending by
unit, batch, product, customer, or facility, then (2) identifies and measures the activities
demanded by other departments that require support-service spending, then (3)
identifies appropriate cost-driver bases and calculates cost-driver rates, and finally
allocates service department costs based on other departments’ usage of cost-driver
bases, is called the
A.usage method.
B.activity-based method.
C.step method.
D.cost driver method.
Using activity-based costing to analyze customer profitability requires the analyst to
determine the cost to maintain customers, which includes such activities as
A.billing customers.
B.processing payments.
C.issuing refunds.
D.All of the answers are correct.
On a balanced scorecard, the measure of the number of new patents developed through
research and development would most likely be an example of a performance measure
in the:
A.financial dimension
B.customer dimension
C.internal business process dimension
D.learning and growth dimension