Question 1

The term "committed costs" refers to costs that

Accepted Answer

A) management decides to incur in the current period to enable the company to achieve objectives other than the filling of orders placed by customers. 
B) are likely to respond to the amount of attention devoted to them by a specified manager. 
C) are governed mainly by past decisions that established the present levels of operating and organizational capacity and that only change slowly in response to small changes in capacity. 
D) fluctuate in total in response to small changes in the rate of utilization of capacity. 
A) management decides to incur in the current period to enable the company to achieve objectives other than the filling of orders placed by customers. 
B) are likely to respond to the amount of attention devoted to them by a specified manager. 
C) are governed mainly by past decisions that established the present levels of operating and organizational capacity and that only change slowly in response to small changes in capacity. 
D) fluctuate in total in response to small changes in the rate of utilization of capacity.

Question 2

As the economy becomes more and more depressed,a company's management decides to slash spending on research and development.What is the likely effect of this action on net income? Net income will be

Accepted Answer

A) higher this period and lower in future periods. 
B) higher this period and higher in future periods. 
C) lower this period and higher in future periods. 
D) lower this period and lower in future periods. 
A) higher this period and lower in future periods. 
B) higher this period and higher in future periods. 
C) lower this period and higher in future periods. 
D) lower this period and lower in future periods.

Question 3

A coefficient of determination has a value between 0 and +1.

Accepted Answer

A) True 
 B)False

Question 4

Lowering existing costs of producing a good or service is referred to as ___________________.

Accepted Answer

The answer of Lowering existing costs of producing a good...

Question 5

Discretionary activities in an organization are determined based on

Accepted Answer

A) organizational policies and managerial preferences. 
B) the budgeted amount from the prior period. 
C) the level of long-term investment. 
D) an organization's internal control. 
A) organizational policies and managerial preferences. 
B) the budgeted amount from the prior period. 
C) the level of long-term investment. 
D) an organization's internal control.

Question 6

Calvert Company has made the following information available for the month of March:
   Assume that Calvert Company hires part-time employees for production of these units.
Compute the price and efficiency variances.

Accepted Answer

The answer of Calvert Company has made the following information...

Question 7

A ratio of outputs to inputs is a(n)

Accepted Answer

A) effectiveness measure. 
B) efficiency measure. 
C) qualitative measure. 
D) cost reduction measure. 
A) effectiveness measure. 
B) efficiency measure. 
C) qualitative measure. 
D) cost reduction measure.

Question 8

Engineered costs may be either variable or fixed.

Accepted Answer

A) True 
 B)False

Question 9

What are the five steps involved in implementing a cost control system?

Accepted Answer

The five steps are as follows: 1.Underst

Question 10

Arnold Company has provided the following information for the month of November:
   Assume that Arnold Company hires full-time employees who are paid a total of $6,500 per month.
Compute the spending and volume variances.

Accepted Answer

The answer of Arnold Company has provided the following information...

Question 11

The benefits of discretionary costs are usually measurable in monetary terms.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following strategies is used to deal with uncertainty related to price risk?

Accepted Answer

A) Statistical analysis 
B) Cost restructuring 
C) Hedging 
D) Insurance 
A) Statistical analysis 
B) Cost restructuring 
C) Hedging 
D) Insurance

Question 13

A reasonable measure of efficiency relies on

Accepted Answer

A) qualitative measures of inputs and outputs. 
B) a match of inputs in one period with outputs in subsequent periods. 
C) a causal relationship between inputs and outputs. 
D) a ratio of planned output to actual output. 
A) qualitative measures of inputs and outputs. 
B) a match of inputs in one period with outputs in subsequent periods. 
C) a causal relationship between inputs and outputs. 
D) a ratio of planned output to actual output.

Question 14

An organization's bond rating may cause the organization to hold larger levels of cash than are necessary for operations.

Accepted Answer

A) True 
 B)False

Question 15

Most discretionary costs relate to

Accepted Answer

A) plant and equipment acquisitions. 
B) long-term investments. 
C) basic personnel costs. 
D) service activities. 
A) plant and equipment acquisitions. 
B) long-term investments. 
C) basic personnel costs. 
D) service activities.

Question 16

Supply chain management can reduce the processing time for an organization to obtain raw materials.

Accepted Answer

A) True 
 B)False

Question 17

A committed fixed cost can

Accepted Answer

A) never be eliminated. 
B) be eliminated in the short term and in the long term. 
C) be eliminated in the long term but not in the short term. 
D) be eliminated in the short term but not in the long term. 
A) never be eliminated. 
B) be eliminated in the short term and in the long term. 
C) be eliminated in the long term but not in the short term. 
D) be eliminated in the short term but not in the long term.

Question 18

If an actual discretionary cost is exactly equal to the budgeted level of that cost,which of the following statements is true?

Accepted Answer

A) Funds were appropriately spent. 
B) The discretionary activity was efficient. 
C) The discretionary activity was effective. 
D) None of the above. 
A) Funds were appropriately spent. 
B) The discretionary activity was efficient. 
C) The discretionary activity was effective. 
D) None of the above.

Question 19

A cost that must be reviewed periodically to determine if it is still appropriate and necessary is referred to as a __________________________________________.

Accepted Answer

The answer of A cost that must be reviewed periodically...

Question 20

When can a discretionary fixed cost be subjected to control methods that are used for engineered costs?

Accepted Answer

When a discretionary cost is repetitive

The term "committed costs" refers to costs that

As the economy becomes more and more depressed,a company's management decides to slash spending on research and development.What is the likely effect of this action on net income? Net income will be

A coefficient of determination has a value between 0 and +1.

Lowering existing costs of producing a good or service is referred to as ___________________.

Discretionary activities in an organization are determined based on

Calvert Company has made the following information available for the month of March: Assume that Calvert Company hires part-time employees for production of these units. Compute the price and efficiency variances.

A ratio of outputs to inputs is a(n)

Engineered costs may be either variable or fixed.

What are the five steps involved in implementing a cost control system?

Arnold Company has provided the following information for the month of November: Assume that Arnold Company hires full-time employees who are paid a total of $6,500 per month. Compute the spending and volume variances.

The benefits of discretionary costs are usually measurable in monetary terms.

Which of the following strategies is used to deal with uncertainty related to price risk?

A reasonable measure of efficiency relies on

An organization's bond rating may cause the organization to hold larger levels of cash than are necessary for operations.

Most discretionary costs relate to

Supply chain management can reduce the processing time for an organization to obtain raw materials.

A committed fixed cost can

If an actual discretionary cost is exactly equal to the budgeted level of that cost,which of the following statements is true?

A cost that must be reviewed periodically to determine if it is still appropriate and necessary is referred to as a __________________________________________.

When can a discretionary fixed cost be subjected to control methods that are used for engineered costs?

Introduction to Cost Accounting

Cost Terminology and Cost Behaviors

Predetermined Overhead Rates, flexible Budgets, and Absorptionvariable Costing

Activity-Based Management and Activity-Based Costing

Job Order Costing

Process Costing

Standard Costing and Variance Analysis

The Master Budget

Break-Even Point and Cost-Volume-Profit Analysis

Relevant Information for Decision Making

Allocation of Joint Costs and Accounting for By-Products

Introduction to Cost Management Systems

Responsibility Accounting, support Department Allocations, and Transfer Pricing

Performance Measurement, balanced Scorecards, and Performance Rewards

Capital Budgeting

Implementing Quality Concepts

Inventory and Production Management

Emerging Management Practices

Filters

Exam 16: Managing Costs and Uncertainty

The term "committed costs" refers to costs that

As the economy becomes more and more depressed,a company's management decides to slash spending on research and development.What is the likely effect of this action on net income? Net income will be

A coefficient of determination has a value between 0 and +1.

Lowering existing costs of producing a good or service is referred to as ___________________.

Discretionary activities in an organization are determined based on

Calvert Company has made the following information available for the month of March: Assume that Calvert Company hires part-time employees for production of these units. Compute the price and efficiency variances.

A ratio of outputs to inputs is a(n)

Engineered costs may be either variable or fixed.

What are the five steps involved in implementing a cost control system?

Arnold Company has provided the following information for the month of November: Assume that Arnold Company hires full-time employees who are paid a total of $6,500 per month. Compute the spending and volume variances.

The benefits of discretionary costs are usually measurable in monetary terms.

Which of the following strategies is used to deal with uncertainty related to price risk?

A reasonable measure of efficiency relies on

An organization's bond rating may cause the organization to hold larger levels of cash than are necessary for operations.

Most discretionary costs relate to

Supply chain management can reduce the processing time for an organization to obtain raw materials.

A committed fixed cost can

If an actual discretionary cost is exactly equal to the budgeted level of that cost,which of the following statements is true?

A cost that must be reviewed periodically to determine if it is still appropriate and necessary is referred to as a __________________________________________.

When can a discretionary fixed cost be subjected to control methods that are used for engineered costs?

Introduction to Cost Accounting

Cost Terminology and Cost Behaviors

Predetermined Overhead Rates, flexible Budgets, and Absorptionvariable Costing

Activity-Based Management and Activity-Based Costing

Job Order Costing

Process Costing

Standard Costing and Variance Analysis

The Master Budget

Break-Even Point and Cost-Volume-Profit Analysis

Relevant Information for Decision Making

Allocation of Joint Costs and Accounting for By-Products

Introduction to Cost Management Systems

Responsibility Accounting, support Department Allocations, and Transfer Pricing

Performance Measurement, balanced Scorecards, and Performance Rewards

Capital Budgeting

Implementing Quality Concepts

Inventory and Production Management

Emerging Management Practices

Filters