Archives: Quiz

Break-even time. Hampton Corporation’s research and development department is presenting a proposal for new product research. The new product will require research, development, and design investments of $6 million (discounted cash flow). Sales will begin after four years and will […]

Which of the following is an objective of inventory management? A.minimize the sum of ordering and carrying costs. B.minimize ordering costs and maximize carrying costs. C.maximize the sum of ordering and carrying costs. D.maximize the ordering costs and minimize carrying […]

What would the initial cash flows associated with an investment project include? A.asset, freight and installation costs. B.cash proceeds from disposing of existing assets made redundant or unnecessary by the new project. C.income tax effect of gain(loss) on disposal of […]

Which of the following terms describes the systematic evaluation of all aspects of research and development, design of products and processes, production, marketing, distribution, and customer service? A.quality engineering. B.incremental engineering. C.systems engineering. D.value engineering. Gem Systems Gem Systems uses […]

Transtech, Inc., processes silicon crystals into purified wafers and chips. Silicon crystals cost $60,000 per tank-car load. The process involves heating the crystals for 12 hours, producing 45,000 purified wafers with a market value of $20,000, and 15,000 chips with […]

Estimating flexible selling expense budget and computing variances. Georgia Peaches estimates the following selling expenses next period: Required: a. Derive the cost equation (y = a + bx) for selling expenses. (Hint: y = a + bx + cy. b. […]

The appropriate discount rate that analysts use in computing the present value of future cash flows is composed of a pure interest rate, a premium for the risk of the investment, an increase to reflect expected inflation. What is this […]

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 […]

A causal model of lead and lag indicators of performance based on financial and non-financial perspectives is known as which of the following? A.balanced scorecard. B.managerial report card. C.hierarchical scorecard. D.management by objectives. The objectives of the theory of constraints […]

Which of the following is a tool in quality control that defines the effect and list events that may be the cause of the problem? A.cause-and-effect analyses. B.Pareto charts. C.control charts. D.PERT charts. KF Company KF Company uses standard costing. […]

Multiple products make using financial models more complex. To deal with this, managers can do which of the following? A.assume that all products have the same contribution margin. B.assume that a particular product mix does not change. C.treat each product […]

Young Company has a tax rate of 40 percent. Information for the company is as follows: What is the weighted cost of capital? A.0.1098 B.0.2480 C.0.0827 D.0.0366 Which of the following are the two costs of controlling quality? Answer: A […]

On a balanced scorecard, the measure of the product returns as percentage of sales 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 Correll Company […]

Which of the following is an example of direct materials cost for an automobile manufacturer? A.cost of wages of assembly workers B.cost of oil or lubricants for the factory machinery C.cost of the automobile windshield D.salary of the production supervisor […]

The presence of the independent auditors and their review of a company’s internal controls A.encourages collusion. B.encourages consolidation of duties and responsibilities. C.helps to prevent fraud. D.totally prevent fraud. The minimum desired ROI rate A.is based on industry averages. B.is […]

The annual award to Japanese companies created in 1950 by the Union of Japanese Scientists and Engineers that focuses on quality improvement is called the A.Baldrige Award. B.Deming Prize. C.ISO 9000 Award. D.UJSE Prize. What should a firm do to […]

Which of the following can be calculated using built-in functions in spreadsheet programs? A.external rate of return. B.internal rate of return. C.investment rate of return. D.international rate of return. A company manager intentionally commits fraud by overstating the ending balance […]

Managerial accounting information is used by which of the following managers? A.marketing managers to help price products and assess their profitability. B.production managers to manage quality and costs and to assure on-time delivery. C.general managers to measure employee performance and […]

What transfer pricing mechanism is used when a company does not have a measure of differential or variable cost? A.Market price-based transfer pricing B.Full-absorption costing C.Activity-based costing D.Actual cost-based transfer pricing In using the budget for performance evaluation, accountants compare […]

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? […]

When using differential analysis to determine when to add or drop parts of operations, if the differential revenue from the sale of a product is less than the differential costs required to provide the product for sale, then A.the product […]

Which of the following reflects the simplest allocation method for a factory? A.The department allocation method. B.The unit cost allocation method. C.The plantwide allocation method. D.The use of activity-based costing. Three Dog Bite Company: Refer to Three Dog Bite Company. […]

Which statement is true in an activity-based costing environment? A.Managers do not need to know product costs. B.Companies use departmental overhead rates. C.Companies compute the rate for each cost driver in each activity center. D.Companies compute the rate for up […]

Break-even time, working backward. Montana Instruments is considering manufacturing the S-Card, a new type of sound card for personal computers. The new product development committee will not approve a new-product proposal if it has a break-even time of more than […]

How is differential analysis used to determine when to add or drop parts of an operation? A.If the differential costs required to provide the product for sale exceeds the differential revenue from the sale of a product, then the product […]

Which of the following is management’s challenge when setting transfer prices? A.Ensuring the buyer has goal congruence with respect to the organization’s goals. B.Ensuring the seller has goal congruence with respect to the organization’s goals. C.Ensuring either the buyer or […]

If all the data points were on a line, the r-square would be A.zero. B.one. C.two. D.impossible to interpret. Which of the following is used to compute the present value of future cash flows when evaluating investments involving cash flows […]

Doug’s Delivery Company Doug’s Delivery Company reports the following information for 2010: Actual: Standard: Refer to Doug’s Delivery Company. What is the variable overhead flexible budget for March 2010? A.$180.00 B.$198.00 C.$220.00 D.$240.00 Which of the following is a cost […]

Which of the following are the two costs of failing to control quality? A.prevention costs and appraisal costs. B.appraisal costs and internal failure. C.internal failure and external failure costs. D.prevention costs and external failure costs. Which of the following is […]

Pauter Company Pauter Company had the following historical accounting data per unit: The units are normally transferred internally from Division A to Division B. The units also may be sold externally for $210 per unit. The minimum profit level accepted […]

Three Dog Bite Company: Refer to Three Dog Bite Company. What are the total appraisal costs? A.$ 375,000 B.$1,550,000 C.$1,275,000 D.$2,025,000 Traditional cost allocation methods include which of the following? A.plantwide allocation, only. B.department allocation, only. C.activity-based costing. D.plantwide and […]

Gem Systems Gem Systems uses an activity-based costing system. The company has gathered the following information concerning various cost pools and activity drivers; The following data was collected and is specific to Job 150. Refer to Gem Systems. Calculate the […]

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 selling price per unit. A.$ 8 B.$ 6 C.$ 2 D.$12 What is generally considered […]

ABC Company ABC Company reports the following information for the most recent period when 2,750 units were produced. Refer to ABC Company. Calculate the total direct materials variance. A.$7,500 U B.$7,850 U C.$7,150 U D.$7,000 U What are selling, general […]

Which of the following statements is true concerning the fixed component of power cost? A.This would be categorized as a unit level activity. B.This is a cost that would be incurred regardless of the level of output. C.This would be […]

Costs that donotrelate directly to a cost object are its A.marginal cost. B.indirect cost. C.sunk cost. D.target cost. Marlow Company The following information pertains to the three divisions of Marlow Company: Answer: B Refer to Marlow Company. What is the […]

Costs that will not vary with activity levels in the short run are known as: A.fixed costs. B.variable costs. C.sunk costs. D.opportunity costs. What is the study of the need for activities and whether they are operating efficiently called? A.direct […]

When substituting computerized equipment for direct labor, a firm should treat labor as which of the following? A.Fixed (or capacity) costs. B.Mixed costs. C.Opportunity costs. D.Variable costs. Julia Electronics LLC is preparing a flexible budget for the coming year and […]

Operational uses of Activity Based Management allow for which of the following? A.Competitive cost advantage by focusing attention on activities. B.Competitive cost advantage by focusing attention on departments. C.Competitive cost advantage by focusing attention on plants. D.Competitive cost advantage by […]

Bush Enterprises adopts Strategic activity-based costing and management techniques which would most likely shift the mix of activities and products away from A.less profitable to more profitable applications. B.less complex to more complex applications. C.high volume to low volume applications. […]

In the joint production process, the point at which the identifiable products emerge is called the A.joint processing point. B.decision point. C.go-no-go point. D.splitoff point. Studies have shown that after activity-based costing has been implemented, the costs of A.high-volume, standard […]

Which of these is the perspective of the balanced scorecard that is at the top of the list for a company’s lenders and shareholders? A.financial perspective. B.internal business and production process perspective. C.learning and growth perspective. D.customer perspective. Which of […]

Young Company has a tax rate of 40 percent. Information for the company is as follows: What is the EVA if the before-tax operating income is $1,500,000? A.$1,134,000 B.$402,000 C.$534,000 D.$(198,000) KF Company KF Company uses standard costing. The company […]

Activity-based management reduces customer response time by identifying the activities that consume the most resources and making them more efficient, and by identifying __________ activities, which the firm can eliminate. A.value-added B.non-value-added C.inefficient D.ineffective A flexible budget is appropriate for […]

Patterson Division had sales revenue of $200,000, operating profit of $10,000, and a division investment of $300,000. Its profit margin percentage is A.66.7% B.150.0% C.3.3% D.5.0% Dropping a product line. Timepiece Products, a clock manufacturer, operates at capacity. Constrained by […]

If the net present value of a proposed project is positive, then the actual rate of return A.is higher than the cost of capital. B.is lower than the cost of capital. C.is equal to the cost of capital. D.is negative. […]

The economic order quantity is the square root of 2 times A.the demand for the period divided by the cost of carrying one unit in inventory for the period. B.order set up cost divided by the cost of carrying one […]

Which of the following is true about short-run and long-run pricing decisions? A.Short-run decisions include pricing for a special order with no long-term implications. B.Short-run decisions typically have a time horizon of two years or more. C.Short-run decisions include pricing […]

Which statement is true concerning decentralization? A.Decentralization impedes local personnel response to a changing environment. B.Decentralization requires significant oversight from top management. C.Decentralization divides large, complex problems into manageable pieces. D.All of the answers are correct. Predatory pricing A.occurs when […]

When there is an outside market for an intermediate product which is perfectly competitive, the most equitable method of transfer pricing is A.market price. B.production cost pricing. C.variable cost pricing. D.cost plus markup pricing. Managers are often correct that the […]