Archives: Quiz

Inventory management. Here are facts about inventory costs for Tops Shoes, a retailer: Required: Prepare a table like Exhibit 7.14 in the text. Find the costs of ordering and carrying inventory for each of the following number of annual orders: […]

Which term describes the interest rate used in computing the present value of future cash flows? A.applicable treasury rate B.discount rate C.income tax rate D.borrowing rate. KF Company KF Company uses standard costing. The company reported the following information for […]

What costs can be justified when managers initially set prices to cover the costs plus a profit and then subsequently adjusts the prices to reflect market conditions? A.Variable costs B.Fixed costs C.Full costs D.Absorption costs Which statement is true concerning […]

Using simulation has few drawbacks since individual cash flows generally are independent and positively correlated. The interest rate on commercial paper normally exceeds the prime rate. Answer: FALSE The term knomrepresents the effective annual rate of interest. Answer: FALSE Not […]

Marketing costs include expenditures for sales commissions (2% of sales dollars) and shipping costs (20 cents per unit) are variable marketing costs and considered to be which of the following? A.customer-level activities. B.facility-level activities. C.product-level activities. D.unit-level activities. What is […]

On a balanced scorecard, the measure of profit margin 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 What can be said of the relationship […]

Which of the following does the cost variance model use to analyze differences between actual and budgeted profits? A.Flexible production budget. B.Fixed production budget. C.Prior period’s production budget. D.Generally accepted accounting principles. Which of the following is a strength of […]

When is the only time an investment analysis needs working capital? A.when the firm must let cash sit idle as a condition of undertaking an investment. B.whenever a capital expenditure decision is made. C.when a firm makes cash payments D.when […]

Which of the following is activity for which cost-volume-profit analysis would not provide useful data? A.product pricing. B.market research for product distribution. C.reporting on income tax returns. D.assessing the level of labor needed in the production process. Which of the […]

In making long-term decisions about investing and financing, a firm should do which of the following? A.decide whether to make the investment, then decide how to raise the funds required for the investment. B.decide how to raise the funds required […]

Which statement is true concerning integrated information systems? A.Integrated information systems are not technically feasible. B.Integrated information systems violate generally accepted accounting principles. C.Integrated information systems are not commercially available. D.Integrated information systems tie together managerial accounting, financial reporting, customer […]

Managers usually decide which cost driver to use based upon which of the following factors? A.Causal relation. B.Cost considerations. C.Generally accepted costing techniques. D.Uniform cost driver standards. The benefits of a just-in-time system usually include which of the following? A.elimination […]

Dukes Computing Systems Dukes Computing Systems manufactures and sells various computer products and has two decentralized divisions: (1) Production and (2) Marketing. The Marketing Division has always purchased a particular motherboard from Production at $65 per unit. The Production Division […]

Using activity-based costing to analyze customer profitability requires the analyst to determine the cost to acquire customers, which includes such activities as A.process payments B.conduct campaign to win back lost customers C.issue refunds D.deliver products Which statement is true concerning […]

Which of the following optimizes the use of scarce resources? A.Total quality management B.Linear programming C.Just-in-time inventory D.The economic order quantity If the profit margin percentage of 30% stayed the same and the investment turnover ratio of 5.0 increased by […]

The methodology(ies) of allocating joint-process costs is(are) based on A.net realizable value, only. B.physical measures, only. C.both net realizable value and physical measures. D.None of the answers is correct. Java Gourmet Coffee Java Gourmet Coffee reports the following data for […]

Lydia’s Delivery Company Lydia’s Delivery Company reports the following information for 2010: Actual: Standard: Refer to Lydia’s Delivery Company. What is the variable overhead variance for fuel costs? A.$12.00 U B.$12.00 F C.$6.00 U D.$6.00 F In 1977, Congress addressed […]

Carson Company uses a cost of capital rate of 10 percent in making investment decisions. It currently is considering two mutually exclusive projects, each requiring an initial investment of $12 million. The first project has a net present value of […]

Which cost can be cut for a period of time because their reduction presents no serious short-term threats to production and marketing? A.discretionary costs. B.committed costs. C.sunk costs. D.opportunity costs. When sales dollars are used as the measure of volume […]

Which of the following statements concerning quality is true? A.Quality can be inspected into a product. B.Quality should be designed into a product. C.Quality is continual, once achieved. D.Quality means meeting management guidelines. Because the cost of capital includes a […]

What is the term that describes the rate companies frequently use to apply fixed overhead costs to units produced? A.Actual overhead rate. B.Predetermined overhead rate. C.Post-determined overhead rate. D.Variable overhead rate. Which of the following statements is true concerning discretionary […]

A company’s selling price is $12 per unit, variable cost is $3 per unit, and fixed costs are $25,000. What is the break-even point in sales dollars? A.$53,333 B.$44,444 C.$33,333 D.$1,333 Useful Tool Company Useful Tool Company has two service […]

For which types of operations do firms design operational planning and control systems? A.manufacturing operations only. B.marketing and manufacturing operations only. C.manufacturing and other activities but not marketing. D.manufacturing, marketing, and other activities. Which costing methodology derives a rate for […]

BLUE Company BLUE Company needs 10,000 units of a certain part to be used in production. If BLUE buys the part from RED Company instead of making it, BLUE could not use the present facilities for another manufacturing activity. Sixty […]

How would income tax laws affect investment decisions? A.Through their effect on the discount rate allowed. B.Through their effect on the type of investments allowed. C.Through their effect on the internal rate of return allowed. D.Through their effect on the […]

Which of the following is a model based on four perspectives: (1) learning and growth, (2) internal business and production process efficiency, (3) customer, and (4) financial? A.Zero-based budgeting B.Planning programming and budgeting C.Management by objectives D.Balanced scorecard Which of […]

What has spawned a major political issue concerning the estimated cost to the United States Treasury of as much as $9 billion to $13 billion per year in lost taxes that could presumably be collected if transfer prices were calculated […]

Which of the following statements best describes costs that increase in steps? A.curvilinear variable. B.curvilinear fixed. C.semi-variable. D.semi-fixed. What management technique focuses on increasing quality as perceived and defined by the customer? A.Theory of constraints. B.Benchmarking. C.Total quality management. D.Web […]

The appropriate discount rate that analysts use in computing the present value of future cash flows is composed of a pure interest rate increased to reflect expected inflation. What is this pure rate called? A.risk-free rate. B.real interest rate. C.nominal […]

With an unrelated diversification strategy, the types of companies that make particularly attractive acquisition targets are: A. struggling companies with good turnaround potential, undervalued companies that can be acquired at a bargain price, and companies that have bright growth prospects […]

How do good corporate citizens function? A. They pursue discretionary activities that contribute to the betterment of society, especially in areas where government has chosen not to focus its efforts or has fallen short. B. They are active participants in […]

The “driving forces” in an industry: A. are usually triggered by changing technology or stronger learning/experience curve effects. B. usually are spawned by growing demand for the product, the outbreak of price-cutting, and big reductions in entry barriers. C. are […]

The diamond framework is NOT LIKELY to answer which of the following questions about competing on an international basis? A. Where will the foreign entrants come from? B. Which countries have the weakest foreign rivals? C. What are the attributes […]

While ultimate responsibility for implementing and executing strategy falls upon the shoulders of senior executives: A. top-level managers still have to rely on the active support and cooperation of middle and lower-level managers in pushing needed changes in functional areas […]

A production-based emphasis toward a low-cost provider strategy usually requires a company to strive for: A. product superiority. B. continuous cost reductions without sacrificing acceptable quality and essential features. C. small-scale production or custom-made products that match the tastes and […]

Ultimate responsibility for seeing that a strategy is executed successfully primarily falls upon the shoulders of: A. a company’s chief executive officer, its chief operating officer, and the heads of major units (business divisions, functional departments, and key operating units). […]

The implementation process is likely to be hampered by missed deadlines, misdirected efforts, and managerial ineptness, if: A. a capable results-oriented management team is not in place. B. the personnel have different management styles. C. top managers start asking tough, […]

Which of the following does NOT exemplify a policy or procedure that facilitates strategy execution? A. A nonprofit agency that addresses only specific societal problems through public services B. A toy manufacturing company that plans on reaching three different segments […]

Which of the following is NOT one of the five typical sources of competitive pressures? A. The power and influence of industry driving forces B. The bargaining power of suppliers and seller€supplier collaboration C. The threat of new entrants into […]

The difference between political risks and economic risks is that: A. political risks stem from instability or weakness in national governments, while economic risks stem from the stability of a country’s monetary system, and its economic and regulatory policies. B. […]

For a particular company resource/capability to have real competitive power and perhaps qualify as a basis for competitive advantage, it should: A. be hard to copy, be rare and something rivals lack, be competitively valuable, and not be easily trumped […]

Calculating competitive strength ratings for a company and comparing them against strength ratings for its key competitors helps indicate: A. which weaknesses and vulnerabilities of competitors the company might be able to attack successfully. B. which competitors are in profitable […]

Which of the following is LIKELY to be viewed as a pro-business government policy from the perspective of companies competing on an international basis? A. Argentina increases its interest rate on loans to foreign entrants from 15% to 19%. B. […]

Which of the following is NOT a typical strategic objective or benefit that drives mergers and acquisitions? A. To gain quick access to new technologies or other resources and capabilities B. To create a more cost-efficient operation out of the […]

An option for NOT remedying an internal cost disadvantage includes: A. investing in productivity-enhancing, cost-saving technological improvements. B. redesigning the product or some of its components to facilitate speedier and more economical manufacture or assembly. C. implementing the use of […]

A “think local, act local” multidomestic strategy works particularly well in all of the following situations, EXCEPT when there are: A. regulations enacted by the host governments requiring that products sold locally meet strictly defined manufacturing specifications or performance standards. […]

Company objectives: A. are needed only in those areas directly related to a company’s short-term and long-term profitability. B. need to be broken down into performance targets for each of its organizational levels-for separate businesses, product lines, functional departments, and […]

The character of a company’s corporate culture is a product of all of the following EXCEPT: A. the shared values and core business principles and beliefs that management preaches and practices. B. its standards of what is ethically acceptable and […]

The school of ethical universalism holds that: A. concepts of right and wrong are not absolute and leave room for deviation from country to country or circumstance to circumstance. B. concepts of right and wrong are universal within countries but […]

Information regarding the four components of the Framework for Competitor Analysis can NOT be: A. gleaned from company press releases. B. gathered from a rival’s internal proprietary strategic information. C. assembled from website data. D. observed from public information. E. […]