Archives: Quiz

Which of the following represents a severe limitation when the Internet is used for primary research? A. The cultural background of the respondents cannot be identified accurately. B. The educational qualifications of the respondents cannot be identified accurately. C. The […]

The marketing process substage in the United States economy from 1950 to the present is mass production. The most managerially useful aspect of the synthesis of cultural differences is that it allows us to make predictions about unfamiliar cultures. Answer: […]

A product that exceeds performance expectations can also be considered to be of poor quality. Political and legal issues a company may face abroad are mitigated by the “alien status” of the company. Answer: FALSE Political and legal issues a […]

In the context of the effect of values on international business negotiations, the Japanese tend to emphasize hierarchical relationships that leads to hampered internal communications. In a free trade zone, payment of import duties is postponed until the product leaves […]

The principal agency that supports U.S. business abroad is the Department of Commerce (DOC). Harry Jordan’s company has just entered into an agreement with a German firm that will create a separate legal entity. This new firm will be allowed […]

Islamic law prescribes specific patterns of social and economic behavior for all individuals. A company in the “no direct foreign marketing” stage of international marketing involvement does not actively cultivate customers outside national boundaries. Answer: TRUE A company in the […]

The Individualism/Collective Index, identified by Geert Hofstede, refers to the preference for behavior that promotes one’s self-interest. Economic growth is measured solely in economic goals. Answer: FALSE Economic growth is measured not solely in economic goals but also in social […]

A country is able to leap several stages of economic development by using technology as economic leverage. For selling in relationship-oriented countries, a sales force consisting of American expatriates proves to be most efficient. Answer: FALSE Selling in information-oriented cultures […]

North America is the region of the world most affected by a steadily declining worker-to-retiree ratio. The support services component of the product component model contains such items as repair and maintenance and availability of spare parts. Answer: TRUE The […]

The Uncertainty Avoidance Index (UAI), one of the four dimensions of culture, identified by Geert Hofstede, focuses on assertiveness and achievement. In the United States, a patent reverts to public domain if it is not produced within a specified period. […]

The Export Trading Company Act allows producers of similar products to form export trading companies in the U.S. In the Treaty of Amsterdam (1977), the European Union agreed to accommodate the changes brought about by the monetary union and the […]

According to James Day Hodgson, former U.S. ambassador to Japan, culture is like a “thicket” that is tough to get through, but effort and patience often lead to success. Subornation payments accompany requests for a person to do a job […]

Even small changes in consumer demand can sharply affect industrial demand. In static economies, consumption patterns change rapidly. Answer: FALSE In static economies, consumption patterns become rigid, and marketing is typically nothing more than a supply effort. In a dynamic […]

An international salesperson must have a high level of flexibility when working in a foreign country or in the home country. A majority of the population of less developed countries can be reached readily through the traditional mass medium of […]

The laws regulating direct selling in China are unusually detailed compared to others around the world. Deflation results in ever-decreasing prices, creating a positive result for consumers, but both put pressure to lower costs on everyone in the supply chain. […]

Cultures low in Uncertainty Avoidance Index take a more empirical approach to understanding and knowledge. Since expatriates are not locals, they often have a negative effect on the prestige of the company and its product line in the eyes of […]

As cultural and political scenario varies so widely across nations, there is absolutely no way to generalize tendencies for products to be politically sensitive. Age and gender have been the most obvious international market segmentation variables, particularly for Americans. Answer: […]

In the context of distribution patterns, wholesaling shows a greater diversity in its structure than does retailing. In the context of blocked currency, blockage is accomplished by refusing to allow an importer to exchange its national currency for the currency […]

Joint ventures are similar in structure and organization to minority holdings by a multinational company (MNC) in a local firm. The decisions taken by the World Trade Organization in solving trade disputes among members are binding ones. Answer: TRUE The […]

Reworking a product is an internal failure cost. An operations flow document shows all processes necessary to manufacture one unit of a product. Answer: TRUE In an ‘œend-of-pipe’ strategy, managers produce the pollutant, and then clean it up. Answer: TRUE […]

An overhead efficiency variance is related entirely to variable overhead. Transfer prices can be used to promote goal congruence among operating segments of an organization. Answer: TRUE The value of discretionary costs is often measured using non-monetary measures. Answer: TRUE […]

Internal performance measures focus on the efficiency and effectiveness of an organization’s production process. Expected capacity is a long-run measure of activity. Answer: FALSE A specific product cannot be a cost object. Answer: FALSE In an actual cost system, factory […]

The relative sales value method requires a common physical unit for measuring the output of each product. Lean manufacturing and just-in-time (JIT) systems are both concerned with reduction of inventory levels. Answer: TRUE Non-financial measures are generally more appropriate for […]

Profit margin indicates management’s efficiency with regard to sales and expenses. Manipulation of segment expenses may result in the segment margin not being an accurate performance measure. Answer: TRUE In estimating factory overhead, it is necessary to separate costs into […]

The formula for usage variance is (AQ – SQ) * SP. The first stage in the budgeting process is the preparation of a sales budget. Answer: TRUE A hybrid costing system would be appropriate for a company that manufactures automobiles. […]

If a strategic alliance is to function effectively, all parties involved must feel that they are being fairly treated. The segment margin of a profit or investment center includes allocated common costs. Answer: FALSE Two methods of allocating joint costs […]

Implementing activity based costing (ABC) has a direct impact on reducing overhead in an organization. Activity-based costing conforms to GAAP with regard to which costs should be expensed. Answer: FALSE Effective cost control begins in the planning stage of the […]

In an outsourcing decision, unavoidable fixed costs are irrelevant. Management talent is increased in a diverse group of employees. Answer: TRUE Open-book management systems are usually easy to implement. Answer: FALSE Adopting a just-in-time (JIT) manufacturing process may enable a […]

It is not necessary to prepare the Cost of Goods Manufactured statement prior to preparing the Cost of Goods Sold statement. Process costing is most appropriate when manufacturing large batches of homogenous products. Answer: TRUE Most smaller businesses are organized […]

The learning and growth perspective of the balanced scorecard focuses on using an organization’s intellectual capital to adapt to or influence customer needs and expectations. An investment in inventory yields a return when it is sold to a third party. […]

The weighted average method combines beginning inventory and current production to compute cost per unit of production. An important function of a cost management system is to relate resource consumption and cost to alternative product and process design. Answer: TRUE […]

Expired costs are reflected on the balance sheet. An organization’s strategy is the guiding force for its mission. Answer: FALSE The first stage in the budgeting process is the preparation of a cash collections budget. Answer: FALSE An organization’s strategy […]

Strategic planning is focused on short-term goals of less than five years. A cost management system should use cost driver information to trace costs to products and services. Answer: TRUE As production becomes more automated, direct labor may be viewed […]

Absorption costing is more useful than variable costing in determining a company’s break-even point. Cost based transfer prices are most appropriate for low cost and low volume services. Answer: TRUE Present value and future value computations assume the use of […]

Calculations for standard process costing are identical to those for FIFO process costing. A company that produces sugar will use a job-order costing system to track production costs. Answer: FALSE It is not necessary to be familiar with an organization’s […]

The weighted average costing method assumes that units in beginning inventory are the first units transferred. Operational management should be directly involved with the strategic planning of an organization. Answer: FALSE The regression equation y = a+ bX assumes that […]

The effect of capital expenditures on the master budget is reflected through cash payments made for acquisition of capital assets. The financial budget is prepared before the operating budget. Answer: FALSE Motivational elements may be quantitative or non-quantitative in nature. […]

The numerator in the formula for equivalent units includes all beginning inventory costs when using the FIFO costing assumption. The balanced scorecard approach complements measures of past performance with measures of the drivers of future performance. Answer: TRUE Economic order […]

Cost flows and physical flows of units are identical. When a flexible manufacturing system (FMS) is used, worker tasks are more diverse than under a traditional manufacturing system. Answer: TRUE An effective reporting system is increasingly important in a decentralized […]

When multiple labor categories are used, the financial effect of using a different mix of workers in a production process is referred to as a labor mix variance. Favorable variances are represented by credit balances in the overhead account. Answer: […]

In a normal job-order costing system, factory overhead is applied using predetermined rates times actual input. Activity-based costing is appropriate for a company that manufactures a single product. Answer: FALSE In a service industry, direct materials are usually insignificant in […]

The numerator in the formula for equivalent units includes all beginning inventory costs when using the weighted average costing assumption. Overapplied factory overhead that is material in amount is closed to cost of goods sold at year end. Answer: FALSE […]

Information that is related to past events is relevant in the decision-making process. In a normal cost system, factory overhead is applied to Work in Process using a predetermined overhead rate. Answer: TRUE On a CVP graph, the total fixed […]

The journal entry to record normal spoilage specifically identified with a particular job includes a debit to Work in Process. When using the high-low method, fixed costs are computed before the variable component is computed. Answer: FALSE Financial measures are […]

Profit maximization is the major focus of value engineering. Unexpired costs are reflected on the balance sheet. Answer: TRUE The margin of safety is an effective measure of risk for a company. Answer: TRUE In setting compensation structures, fixed salary […]

Distribution costs are an example of period costs. An organization’s value chain can aid in the reduction of non-value added activities. Answer: TRUE The operation of a management control system is readily observable. Answer: FALSE The Internal Revenue Service allows […]

Variable costs per unit vary directly with levels of production. Unfavorable variances are represented by credit balances in the overhead account. Answer: FALSE The manager of an investment center is responsible for generating revenue as well as controlling expenses. Answer: […]

The net realizable value approach requires that the net realizable value of by-products and scrap be treated as a reduction in joint costs allocated to primary products. The EOQ formula can be modified to calculate the number of units that […]

Decentralization is a transfer of authority from the top to the lower level of an organization. On a CVP graph, the total variable cost line intersects the y-axis at zero. Answer: TRUE A debit to the Factory Overhead account represents […]

The net realizable value approach is used to account for scrap and by-products when the net realizable value is significant. The amount of raw materials that must be purchased can be computed by the following formula: Beginning inventory + Materials […]