Question 1

A company may outsource some of its production in order to focus on core competencies.

Accepted Answer

A) True 
 B)False

Question 2

What are some factors that a company must consider when deciding to raise or lower sales prices on products?

Accepted Answer

Quantitative factors include the new con

Question 3

Thomas Company has only 25,000 hours of machine time each month to manufacture its two products.Product X has a contribution margin of $50,and Product Y has a contribution margin of $64.Product X requires 5 hours of machine time,and Product Y requires 8 hours of machine time.If Thomas Company wants to dedicate 80 percent of its machine time to the product that will provide the most income,the company will have a total contribution margin of

Accepted Answer

A) $250,000. 
B) $240,000. 
C) $210,000. 
D) $200,000. 
A) $250,000. 
B) $240,000. 
C) $210,000. 
D) $200,000.

Question 4

Waldrup Corporation Waldrup Corporation sells a product for $21 per unit,and the standard cost card for the product shows the following costs:
  Refer to Waldrup Corporation.Assume that Waldrup has sufficient idle capacity to produce the 1,200 units.If Waldrup wants to increase its operating profit by $6,000,what would it charge as a per-unit selling price?

Accepted Answer

A) $15.00 
B) $17.00 
C) $21.00 
D) $23.00 
A) $15.00 
B) $17.00 
C) $21.00 
D) $23.00

Question 5

In an outsourcing decision,unavoidable fixed costs are irrelevant.

Accepted Answer

A) True 
 B)False

Question 6

A cost is sunk if it

Accepted Answer

A) is not an incremental cost. 
B) is unavoidable. 
C) has already been incurred. 
D) is irrelevant to the decision at hand. 
A) is not an incremental cost. 
B) is unavoidable. 
C) has already been incurred. 
D) is irrelevant to the decision at hand.

Question 7

The amount of cost that differs across decision choices is referred to as _________________________.

Accepted Answer

The answer of The amount of cost that differs across...

Question 8

In linear programming,a ______________________________ represents the unused amount of a resource at any level of operation.

Accepted Answer

The answer of In linear programming,a ______________________________ represents the unused...

Question 9

Maximization of variable costs is a common objective function in linear programming.

Accepted Answer

A) True 
 B)False

Question 10

Define segment margin and explain why it is a relevant measure of a segment's contribution to overall organizational profitability.

Accepted Answer

Segment margin is the amount of income t

Question 11

The outsourcing decision is also referred to as a "make-or-buy" decision.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following costs would be relevant in short-term decision making?

Accepted Answer

A) incremental fixed costs 
B) all costs of inventory 
C) total variable costs that are the same in the considered alternatives 
D) the cost of a fixed asset that could be used in all the considered alternatives 
A) incremental fixed costs 
B) all costs of inventory 
C) total variable costs that are the same in the considered alternatives 
D) the cost of a fixed asset that could be used in all the considered alternatives

Question 13

The term incremental cost refers to

Accepted Answer

A) the profit foregone by selecting one choice instead of another. 
B) the additional cost of producing or selling another product or service. 
C) a cost that continues to be incurred in the absence of activity. 
D) a cost common to all choices in question and not clearly or feasibly allocable to any of them. 
A) the profit foregone by selecting one choice instead of another. 
B) the additional cost of producing or selling another product or service. 
C) a cost that continues to be incurred in the absence of activity. 
D) a cost common to all choices in question and not clearly or feasibly allocable to any of them.

Question 14

The opportunity cost of making a component part in a factory with excess capacity for which there is no alternative use is

Accepted Answer

A) the total manufacturing cost of the component. 
B) the total variable cost of the component. 
C) the fixed manufacturing cost of the component. 
D) zero. 
A) the total manufacturing cost of the component. 
B) the total variable cost of the component. 
C) the fixed manufacturing cost of the component. 
D) zero.

Question 15

A linear programming solution

Accepted Answer

A) always involves more than one constraint. 
B) always involves a corner point. 
C) is the one with the highest vertex coordinates. 
D) is provided by the input-output coefficients. 
A) always involves more than one constraint. 
B) always involves a corner point. 
C) is the one with the highest vertex coordinates. 
D) is provided by the input-output coefficients.

Question 16

Swanson Company has 3 divisions: X,Y,and Z.Division X's income statement shows the following for the year ended December 31:   Cost of goods sold is 75 percent variable and 25 percent fixed.Of the fixed costs,60 percent are avoidable if the division is closed.All of the selling expenses relate to the division and would be eliminated if Division X were eliminated.Of the administrative expenses,90 percent are applied from corporate costs.If Division X were eliminated,Swanson's income would

Accepted Answer

A) increase by $150,000. 
B) decrease by $ 75,000. 
C) decrease by $155,000. 
D) decrease by $215,000. 
A) increase by $150,000. 
B) decrease by $ 75,000. 
C) decrease by $155,000. 
D) decrease by $215,000.

Question 17

The minimum selling price that should be acceptable in a special order situation is equal to total

Accepted Answer

A) production cost. 
B) variable production cost. 
C) variable costs. 
D) production cost plus a normal profit margin. 
A) production cost. 
B) variable production cost. 
C) variable costs. 
D) production cost plus a normal profit margin.

Question 18

Which of the following is the least likely to be a relevant item in deciding whether to replace an old machine?

Accepted Answer

A) acquisition cost of the old machine 
B) outlay to be made for the new machine 
C) annual savings to be enjoyed on the new machine 
D) life of the new machine 
A) acquisition cost of the old machine 
B) outlay to be made for the new machine 
C) annual savings to be enjoyed on the new machine 
D) life of the new machine

Question 19

In an outsourcing decision,variable costs of production are relevant.

Accepted Answer

A) True 
 B)False

Question 20

The ____ prohibits companies from pricing products at different amounts unless these differences reflect differences in the cost to manufacture,sell,or distribute the products.

Accepted Answer

A) Internal Revenue Service 
B) Governmental Accounting Office 
C) Sherman Antitrust Act 
D) Robinson-Patman Act 
A) Internal Revenue Service 
B) Governmental Accounting Office 
C) Sherman Antitrust Act 
D) Robinson-Patman Act

A company may outsource some of its production in order to focus on core competencies.

What are some factors that a company must consider when deciding to raise or lower sales prices on products?

In an outsourcing decision,unavoidable fixed costs are irrelevant.

A cost is sunk if it

The amount of cost that differs across decision choices is referred to as _________________________.

In linear programming,a ______________________________ represents the unused amount of a resource at any level of operation.

Maximization of variable costs is a common objective function in linear programming.

Define segment margin and explain why it is a relevant measure of a segment's contribution to overall organizational profitability.

The outsourcing decision is also referred to as a "make-or-buy" decision.

Which of the following costs would be relevant in short-term decision making?

The term incremental cost refers to

The opportunity cost of making a component part in a factory with excess capacity for which there is no alternative use is

A linear programming solution

The minimum selling price that should be acceptable in a special order situation is equal to total

Which of the following is the least likely to be a relevant item in deciding whether to replace an old machine?

In an outsourcing decision,variable costs of production are relevant.

The ____ prohibits companies from pricing products at different amounts unless these differences reflect differences in the cost to manufacture,sell,or distribute the products.

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

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

Managing Costs and Uncertainty

Implementing Quality Concepts

Inventory and Production Management

Emerging Management Practices

Filters

Exam 10: Relevant Information for Decision Making

A company may outsource some of its production in order to focus on core competencies.

What are some factors that a company must consider when deciding to raise or lower sales prices on products?

In an outsourcing decision,unavoidable fixed costs are irrelevant.

A cost is sunk if it

The amount of cost that differs across decision choices is referred to as _________________________.

In linear programming,a ______________________________ represents the unused amount of a resource at any level of operation.

Maximization of variable costs is a common objective function in linear programming.

Define segment margin and explain why it is a relevant measure of a segment's contribution to overall organizational profitability.

The outsourcing decision is also referred to as a "make-or-buy" decision.

Which of the following costs would be relevant in short-term decision making?

The term incremental cost refers to

The opportunity cost of making a component part in a factory with excess capacity for which there is no alternative use is

A linear programming solution

The minimum selling price that should be acceptable in a special order situation is equal to total

Which of the following is the least likely to be a relevant item in deciding whether to replace an old machine?

In an outsourcing decision,variable costs of production are relevant.

The ____ prohibits companies from pricing products at different amounts unless these differences reflect differences in the cost to manufacture,sell,or distribute the products.

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

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

Managing Costs and Uncertainty

Implementing Quality Concepts

Inventory and Production Management

Emerging Management Practices

Filters