What is the objective of economic order quantity?
A.minimize the sum of carrying costs and order costs for the period.
B.maximize the sum of carrying costs and order costs for the period.
C.minimize carrying costs and maximize order costs for the period.
D.maximize carrying costs and minimize order costs for the period.
Which stage of a product’s life cycle establishes 80 to 90 percent of what the product’s
costs will be?
A.Product design and development
B.Product manufacturing
C.Product controlling
D.Product planning
What is the cultural impact on budgeting?
A.Lower-level managers in Germany, the United Kingdom, the United States, New
Zealand, Canada, and Australia are less willing to accept the “fact” that top managers
are more powerful than they.
B.Lower-level managers in Germany, the United Kingdom, the United States, New
Zealand, Canada, and Australia are more likely to not accept top-down budgets.
C.Lower-level managers in Germany, the United Kingdom, the United States, New
Zealand, Canada, and Australia are more likely to want to participate in budgeting,
D.all of the above
For the internal rate of return to rank projects the same way as the net present value
rule, which condition must exist?
A.The cutoff rate used for the internal rate equals the cost of capital.
B.Projects are mutually exclusive.
C.Projects have different lives.
D.There must be more than one internal rate of return.
In which area will analysts will likely err when making capital investment decisions?
A.the amount of future cash flows
B.the timing of cash flows
C.the discount rate.
D.all of the above.
Which term describes the costs of activities that the company can eliminate without
reducing product quality, performance, or value?
A.non-value-performance-quality-added costs.
B.non-value-added costs.
C.non-performance-added costs.
D.non-quality-added costs.
Which critical success factor relates to the expectations the customer has about all
aspects, both tangible and intangible, of the product’s purchase and use?
A.Service
B.Quality
C.Quantity
D.Cost
The economic order quantity model derives the optimal number of which of the
following costs?
A.fixed and variable costs.
B.orders or production runs.
C.direct materials and direct labor.
D.direct materials and conversion costs.
Which of the following is the term that represents the costs of processing each purchase
order?
A.production costs.
B.setup costs.
C.order costs.
D.sunk costs.
Which of the following is the discount rate that discounts the future cash flows to a
present value just equal to the initial investment?
A.investment rate of return.
B.external rate of return.
C.internal rate of return.
D.international rate of return.
Which of the following terms describe the level of activity over which the firm expects
a set of cost behaviors to be consistent?
A.marginal activity.
B.range of opportunity.
C.relevant range.
D.margin of safety.
The Fast Trax Company manufactures adding machines. The company’s capacity is
5,000 units per month; however, it currently is selling only 3,000 units per month.
Company X has asked Fast Trax to sell 1,000 adding machines at $25 each. Normally,
Fast Trax sells its product for $35. The company records report each adding machine’s
full absorption costs are $30 which includes fixed costs of $20. If Fast Trax was to
accept Company X’s offer, what would be the impact on Fast Trax’s operating income?
A.Additional profit of $15,000
B.Additional profit of $25,000
C.A loss of $5,000 on this order
D.A loss of $10,000 on this order
When does improper revenue recognition usually occur?
A.When reporting profit-decreasing effects of revenue in the wrong accounting period.
B.When reporting profit-increasing effects of revenue in the wrong accounting period.
C.When reporting profit-decreasing effects of cash flows in the wrong accounting
period.
D.When reporting profit-increasing effects of cash flows in the wrong accounting
period.
Which of the following statements is the correct calculation for the margin of safety in
dollars?
A.The excess of projected (or actual) sales dollars over the break-even sales dollars.
B.The excess of projected (or actual) sales price over the break-even sales price.
C.The excess of projected (or actual) cost of sales in dollars over the break-even costs
of sales in dollars level.
D.None of the answers is correct.
When referring to quality according to the customer, all of the following are typically
important elements for service of a bridal gown except:
A.advertising costs
B.style
C.timeliness
D.fit
What cost centers have input-output relationships sufficiently well established so that a
particular set of inputs will provide a predictable and measurable set of outputs?
A.engineered cost centers.
B.direct cost centers.
C.opportunity cost centers.
D.discretionary cost centers.