Question 1

Costs that have been found to bear observable and known relationships to a quantifiable activity base are referred to as __________________________________.

Accepted Answer

The answer of Costs that have been found to bear...

Question 2

Maintaining excessive cash may reduce firm profitability because of low returns on cash investments.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following strategies is used to deal with uncertainty related to estimating future costs?

Accepted Answer

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

Question 4

Careful analysis of the capital budget is an important control activity for

Accepted Answer

A)  variable costs. 
B)  discretionary costs. 
C)  committed costs. 
D)  period costs. 
A)  variable costs. 
B)  discretionary costs. 
C)  committed costs. 
D)  period costs.

Question 5

If a discretionary cost can be treated like an engineered cost, cost control may be achieved through the use of

Accepted Answer

A)  program budgeting. 
B)  zero-base budgeting. 
C)  capital budgeting. 
D)  flexible budgeting. 
A)  program budgeting. 
B)  zero-base budgeting. 
C)  capital budgeting. 
D)  flexible budgeting.

Question 6

An effective control system functions before, during, and after an event. However, little control is possible during the event for most

Accepted Answer

A)  variable manufacturing costs. 
B)  variable period costs. 
C)  discretionary fixed costs. 
D)  committed fixed costs. 
A)  variable manufacturing costs. 
B)  variable period costs. 
C)  discretionary fixed costs. 
D)  committed fixed costs.

Question 7

In the least-squares equation, y = a + bX, a represents

Accepted Answer

A)  the coefficient of determination. 
B)  the level of activity. 
C)  the fixed component of a cost. 
D)  the variable cost per unit. 
A)  the coefficient of determination. 
B)  the level of activity. 
C)  the fixed component of a cost. 
D)  the variable cost per unit.

Question 8

When budgeting for discretionary costs, less is always better.

Accepted Answer

A) True 
 B)False

Question 9

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 Davis Corporation actually produced and sold 19,000 baseball bats. At this level of operation, Davis Corporation's total costs were $170,000. Evaluate Davis Corporation's success in terms of effectiveness and efficiency.

Accepted Answer

Davis Corporation was not entirely effec

Question 10

Finding acceptable alternatives to higher cost items or not spending money for goods and services is referred to as ________________________________.

Accepted Answer

The answer of Finding acceptable alternatives to higher cost items...

Question 11

What are the usual sources for cash in an organization?

Accepted Answer

1. Sale of equity or debt securities or

Question 12

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 13

Discuss the various elements of the cost control process.

Accepted Answer

Cost understanding is one element of a c

Question 14

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 15

What are four generic strategies that may be used in cost management to deal with uncertainty?

Accepted Answer

The answer of What are four generic strategies that may...

Question 16

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. Note that the budget for discretionary fixed costs is $40,000. If actual discretionary fixed costs were $50,000, could cost control have still been effective? Explain.

Accepted Answer

Yes, cost control could have been effect

Question 17

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 18

A company would be reducing its discretionary costs if it

Accepted Answer

A)  fired a production supervisor. 
B)  closed its research and development department. 
C)  successfully negotiated a reduction in its factory rent. 
D)  reduced its direct labor costs by hiring temporary workers. 
A)  fired a production supervisor. 
B)  closed its research and development department. 
C)  successfully negotiated a reduction in its factory rent. 
D)  reduced its direct labor costs by hiring temporary workers.

Question 19

Effective cost control begins in the planning stage of the management cycle.

Accepted Answer

A) True 
 B)False

Question 20

Engineered costs may be either variable or fixed.

Accepted Answer

A) True 
 B)False

Costs that have been found to bear observable and known relationships to a quantifiable activity base are referred to as __________________________________.

Maintaining excessive cash may reduce firm profitability because of low returns on cash investments.

Which of the following strategies is used to deal with uncertainty related to estimating future costs?

Careful analysis of the capital budget is an important control activity for

If a discretionary cost can be treated like an engineered cost, cost control may be achieved through the use of

An effective control system functions before, during, and after an event. However, little control is possible during the event for most

In the least-squares equation, y = a + bX, a represents

When budgeting for discretionary costs, less is always better.

Finding acceptable alternatives to higher cost items or not spending money for goods and services is referred to as ________________________________.

What are the usual sources for cash in an organization?

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

Discuss the various elements of the cost control process.

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

What are four generic strategies that may be used in cost management to deal with uncertainty?

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

A company would be reducing its discretionary costs if it

Effective cost control begins in the planning stage of the management cycle.

Engineered costs may be either variable or fixed.

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

Costs that have been found to bear observable and known relationships to a quantifiable activity base are referred to as __________________________________.

Maintaining excessive cash may reduce firm profitability because of low returns on cash investments.

Which of the following strategies is used to deal with uncertainty related to estimating future costs?

Careful analysis of the capital budget is an important control activity for

If a discretionary cost can be treated like an engineered cost, cost control may be achieved through the use of

An effective control system functions before, during, and after an event. However, little control is possible during the event for most

In the least-squares equation, y = a + bX, a represents

When budgeting for discretionary costs, less is always better.

Finding acceptable alternatives to higher cost items or not spending money for goods and services is referred to as ________________________________.

What are the usual sources for cash in an organization?

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

Discuss the various elements of the cost control process.

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

What are four generic strategies that may be used in cost management to deal with uncertainty?

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

A company would be reducing its discretionary costs if it

Effective cost control begins in the planning stage of the management cycle.

Engineered costs may be either variable or fixed.

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