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1) Using net book value as an investment base will result in a lower ROI than using
gross book value as an investment base.
2) Management accountants help managers identify what information is relevant and
what information is
irrelevant that help in decision making.
3) The use of high-quality raw materials is likely to result in a favorable efficiency
variance and an unfavorable price variance.
4) Dual pricing uses two separate transfer-pricing methods to price each transfer from
one subunit to another.
5) In a period of rising prices, the weighted-average method will result in higher tax
payments.
6) Life-cycle budgeting estimates the costs and revenues attributed to a product from its
initial R&D through production of a prototype product.
7) What is cost of goods sold using variable costing?
A) $38,675
B) $35,000
C) $44,200
D) $52,000
8) Which of the following is true of planning?
A) It makes predictions about the future.
B) It assumes the functional hierarchy of any business is linear.
C) It improves the quality of products.
D) It evaluates customer feedback
9) Which of the following statements is true of a linear cost function?
A) It presents variable cost as a slope coefficient.
B) It presents total cost as an intercept.
C) It presents variable cost as an intercept.
D) It presents total cost as slope coefficient.
10) Following a strategy of product differentiation, Arseniq Company makes a high-end
Appliance, XT15. Arseniq presents the following data for the years 2014 and 2015:
Arseniq produces no defective units but it wants to reduce direct materials usage per
unit of XT15. Manufacturing conversion costs in each year depend on production
capacity defined in terms of XT15 units that can be produced. Selling and
customer-service costs depend on the number of customers that the customer and
service functions are designed to support. Arseniq had 140 customers in 2014 and 145
customers in 2015.
What is operating income in 2015?
A) $11,440,000
B) $11,200,000
C) $9,000,000
D) $9,207,000
11) Assembly department of Zahra Technologies had 100 units as work in process at the
beginning of the month. These units were 50% complete. It has 200 units which are
25% complete at the end of the month. During the month, it completed and transferred
500 units. Direct materials are added at the beginning of production. Conversion costs
are allocated evenly throughout production. Zahra uses weighted-average
process-costing method.
The number of equivalent units of work done during the month for direct materials is
________.
A) 600 units
B) 800 units
C) 700 units
D) 500 units
12) Constanza Company has the following balances as of the year ended December 31,
2014:
Additional information is as follows:
Required:
a.Compute beginning direct materials inventory.
b.Compute beginning WIP inventory.
c.Compute beginning finished goods inventory.
d.Compute actual factory overhead incurred.
13) Which of the following statements is true of successfully implementing a balanced
scorecard?
A) External auditors should design and implement the balanced scorecard.
B) Balanced scorecard should never be communicated to all employees.
C) Balanced scorecard should be formed exclusively by top management.
D) Management accountants should determine the balanced scorecard measures.
14) For a manufacturing company, direct material costs may be included in ________.
A) direct materials inventory only
B) merchandise inventory only
C) both work-in-process inventory and finished goods inventory
D) direct materials inventory, work-in-process inventory, and finished goods inventory
accounts
15) A tool that distinguishes random from nonrandom variations in an operating process
is a ________.
A) control chart
B) Pareto diagram
C) cause-and-effect diagram
D) time-series graphs
16) To guide cost allocation decisions, the fairness or equity criterion ________.
A) considers reasonableness as a matter of judgment rather than an operational criterion
B) allocates cost among the beneficiaries in proportion to the benefits each receives
C) is used more frequently than any other criteria
D) is the primary criterion used in activity-based costing
17) The variable overhead efficiency variance is computed ________ and interpreted
________ the direct-cost efficiency variance.
A) the same as; the same as
B) the same as; differently than
C) differently than; the same as
D) differently than; differently than
18) If there is an ethical conflict concerning your direct supervisor, you may contact
________.
A) local media
B) IMA Ethics Counselor
C) attorney
D) board of directors
