1) effective execution of the cost leadership strategy requires all of the following
except:
a.incentives based on meeting strict quantitative goals
b.frequent, detailed control reports
c.tight cost control
d.structured organization and policies
e.strong coordination among functions: research, product development, manufacturing,
and marketing
2) the merchant manufacturing company has two service departments purchasing and
maintenance, and two production departments fabrication and assembly. 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 assembly department using the direct method is
(calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and
round all dollar amounts to the nearest whole dollar):
a.$102,750
b.$114,600
c.$85,800
d.$131,250
e.$135,000
3) the competitive strategy in which the firm succeeds by developing and maintaining a
unique value for the product, as perceived by the customer, is termed:
a.differentiation
b.specialization advantage
c.design strategy
d.benchmarking
e.product specialization
4) all of the following are required resources for differentiation except:
a.product engineering
b.corporate reputation for quality
c.intense supervision of labor
d.strong marketing capability
5) in swot analysis, opportunities and threats are identified by:
a.consultation with middle management
b.talking with the rank and file workers
c.looking outside the firm
d.brainstorming techniques
e.reviewing our corporate strategy
6) the sales and cost data for two companies in the transportation industry are as
follows:
x company’s margin of safety ratio (mos%) is calculated to be:
a.7.69%
b.14.29%
c.23.62%
d.47.50%
e.25.00%
7) maintaining a constant production level in a firm has the advantage of:
a.minimizing the amount of inventory held
b.allowing a stable employment level
c.meeting customers’ changing expectations in terms of demand volume
d.supporting the organization’s move to jit (just-in-time)
e.allowing the firm to compete successfully as a differentiator
8) midgettco.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.
the accounting staff suggested that linear regression be employed to derive an equation
for maintenance hours and costs. data regarding the maintenance hours and costs for the
last year and the results of the regression analysis are as follows:
average cost per hour ($51,840 6,270) = $8.27 (rounded to the nearest cent)
r = .99821
r2 = .99780
the percent of the total variance that can be explained by the regression equation is:
a.99.821%
b.69.670%
c.81.049%
d.99.780%
e.99.642%
9) which of the statements below is not correct?
a.normal spoilage is spoilage that occurs under efficient operating conditions
b.normal spoilage is controllable in the short term and not considered a part of product
cost
c.abnormal spoilage is spoilage in excess of that expected under efficient operating
conditions
d.abnormal spoilage is charged as a loss to operations in the period detected
10) which of the following best describes a fixed cost?
a.it may change in total when such change is unrelated to changes in production volume
b.it may change in total when such change is related to changes in production volume
c.it is constant per unit of change in production volume
d.it may change in total when such change depends on production volume within the
relevant range
11) matrix inc. calculates cost for an equivalent unit of production using both the
weighted-average and the fifo methods.
total equivalent units for conversion under the fifo method are calculated to be:
a.126,000 equivalent units
b.114,000 equivalent units
c.90,000 equivalent units
d.102,000 equivalent units
e.96,000 equivalent units
12) the process of examining how a change in a single item in a budget (e.g., sales
volume) affects one or more items in the budget (e.g., budgeted sales revenue and
budgeted operating income) is generally referred to as:
a.flexible budgeting
b.linear programming
c.uncertainty programming
d.what-if analysis
e.activity-based budgeting (abb)
13) the key distinction between job costing and process costing is:
a.the difference in detail required by each approach
b.the use made of the collected data
c.the journal entries required
d.the cost object for which costs are accumulated
e.the standards applied
14) which of the following is not one of the objectives of cost allocation?
a.motivate managers to exert a high-level of effort
b.provide useful departmental and product costs
c.identify production constraints
d.provide the right incentive for managers to make the right decisions
e.provide an appropriate basis for performance evaluation
15) the following information was taken from the accounting records of elliott
manufacturing corp. unfortunately, some of the data were destroyed by a computer
malfunction.
work in process inventory, beginning, is calculated to be:
a.$4,000
b.$9,000
c.$11,000
d.$12,000
e.$16,000
16) which type of firm is most likely to require a very accurate costing system?
a.a firm in a process industry
b.a firm in a professional services industry
c.a firm in a competitive environment
d.a global firm