Question 1

The value of discretionary costs is often measured using non-monetary measures.

Accepted Answer

A) True 
 B)False  True

Question 2

Which of the following strategies is used to deal with uncertainty related to a specific event?

Accepted Answer

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

Question 3

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

Accepted Answer

A) True 
 B)False  True

Question 4

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 5

The level of discretionary costs

Accepted Answer

A)  are set by management for one period at a time. 
B)  cannot be changed in the short run. 
C)  are determined when capital investment is undertaken. 
D)  always varies with sales. 
A)  are set by management for one period at a time. 
B)  cannot be changed in the short run. 
C)  are determined when capital investment is undertaken. 
D)  always varies with sales.

Question 6

How does strategic staffing fit in with departmental staffing?

Accepted Answer

Strategic staffing is based on a departm

Question 7

Increasing the discount period on accounts receivable will increase an organization's cash levels.

Accepted Answer

A) True 
 B)False

Question 8

The term "discretionary costs" refers to

Accepted Answer

A)  costs that 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)  costs that are likely to respond to the amount of attention devoted to them by a specified manager. 
C)  costs that 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)  amortization of costs that were capitalized in previous periods. 
A)  costs that 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)  costs that are likely to respond to the amount of attention devoted to them by a specified manager. 
C)  costs that 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)  amortization of costs that were capitalized in previous periods.

Question 9

Which kind of costs could be eliminated by closing a sales office?

Accepted Answer

A)  yes yes no 
B)  yes no yes 
C)  yes no no 
D)  no no yes 
A)  yes yes no 
B)  yes no yes 
C)  yes no no 
D)  no no yes

Question 10

Davis Corporation
Davis Corporation manufactures and sells baseball bats. For a recent period, its production and sales objectives were each set at 20,000 units. Also, for this period the firm had estimated costs as follows:
   Refer to Davis Corporation. For this question only, assume that Davis Corporation actually produced and sold 18,000 baseball bats. Davis Corporation's operations for the period would (on an overall basis) be regarded as efficient if total costs were below what amount?

Accepted Answer

First, remember how fixed and variable c

Question 11

Property taxes on an organization's plant building are considered as committed costs.

Accepted Answer

A) True 
 B)False

Question 12

Spending levels in prior years are often the basis of

Accepted Answer

A)  traditional budgets. 
B)  zero-base budgets. 
C)  variance targets. 
D)  engineered cost analyses. 
A)  traditional budgets. 
B)  zero-base budgets. 
C)  variance targets. 
D)  engineered cost analyses.

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

Assume actual output exceeds the level of output in the original budget. You would expect costs in which of the following categories to exceed the original budget?

Accepted Answer

A)  total variable costs 
B)  committed fixed costs 
C)  discretionary fixed costs 
D)  all of the above 
A)  total variable costs 
B)  committed fixed costs 
C)  discretionary fixed costs 
D)  all of the above

Question 15

Accelerating inventory turnover will increase an organization's levels of cash.

Accepted Answer

A) True 
 B)False

Question 16

What are the differences between committed fixed costs and discretionary fixed costs?

Accepted Answer

Committed fixed costs are those costs th

Question 17

Which of the following is likely to be a discretionary cost in most organizations?

Accepted Answer

A)  managerial training programs 
B)  managerial labor costs 
C)  factory utilities 
D)  factory rent 
A)  managerial training programs 
B)  managerial labor costs 
C)  factory utilities 
D)  factory rent

Question 18

Cost control should be viewed as a short-term process.

Accepted Answer

A) True 
 B)False

Question 19

What factors influence the total level of discretionary costs in an organization?

Accepted Answer

Organizations tend to fund discretionary

Question 20

Which of the following is not a factor that directly affects the budget for a discretionary cost?

Accepted Answer

A)  the importance of the activity to the achievement of the organization's goals 
B)  last period's budget 
C)  the expected level of operations 
D)  managerial negotiations in the budgeting process 
A)  the importance of the activity to the achievement of the organization's goals 
B)  last period's budget 
C)  the expected level of operations 
D)  managerial negotiations in the budgeting process

The value of discretionary costs is often measured using non-monetary measures.

Which of the following strategies is used to deal with uncertainty related to a specific event?

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

A ratio of outputs to inputs is a(n)

The level of discretionary costs

How does strategic staffing fit in with departmental staffing?

Increasing the discount period on accounts receivable will increase an organization's cash levels.

The term "discretionary costs" refers to

Which kind of costs could be eliminated by closing a sales office?

Property taxes on an organization's plant building are considered as committed costs.

Spending levels in prior years are often the basis of

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

Assume actual output exceeds the level of output in the original budget. You would expect costs in which of the following categories to exceed the original budget?

Accelerating inventory turnover will increase an organization's levels of cash.

What are the differences between committed fixed costs and discretionary fixed costs?

Which of the following is likely to be a discretionary cost in most organizations?

Cost control should be viewed as a short-term process.

What factors influence the total level of discretionary costs in an organization?

Which of the following is not a factor that directly affects the budget for a discretionary cost?

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 value of discretionary costs is often measured using non-monetary measures.

Which of the following strategies is used to deal with uncertainty related to a specific event?

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

A ratio of outputs to inputs is a(n)

The level of discretionary costs

How does strategic staffing fit in with departmental staffing?

Increasing the discount period on accounts receivable will increase an organization's cash levels.

The term "discretionary costs" refers to

Which kind of costs could be eliminated by closing a sales office?

Property taxes on an organization's plant building are considered as committed costs.

Spending levels in prior years are often the basis of

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

Assume actual output exceeds the level of output in the original budget. You would expect costs in which of the following categories to exceed the original budget?

Accelerating inventory turnover will increase an organization's levels of cash.

What are the differences between committed fixed costs and discretionary fixed costs?

Which of the following is likely to be a discretionary cost in most organizations?

Cost control should be viewed as a short-term process.

What factors influence the total level of discretionary costs in an organization?

Which of the following is not a factor that directly affects the budget for a discretionary cost?

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