Question 1

A Customer Relationship Management System (CRM) might allow a customer to track his/her package as it is being shipped across the country.

Accepted Answer

A) True 
 B)False

Question 2

Sweet Time Candies projects its factory rent to be $8,000 in August when 4,000 pounds of candy are expected to be produced.If rent is a fixed cost, and if production is expected to increase to 6,000 units in September, what is the expected cost of rent in September?

Accepted Answer

A) $12,000 
B) $8,000 
C) $7,000 
D) Not enough information is provided to determine the answer. 
A) $12,000 
B) $8,000 
C) $7,000 
D) Not enough information is provided to determine the answer.

Question 3

For which one of the following is a company's treasurer typically held responsible?

Accepted Answer

A) Reporting information to the IRS 
B) Maintaining relationships with investors and creditors 
C) Preparing audited financial statements 
D) Preparing and analyzing budgets 
A) Reporting information to the IRS 
B) Maintaining relationships with investors and creditors 
C) Preparing audited financial statements 
D) Preparing and analyzing budgets

Question 4

You own a car and are trying to decide whether to trade it in and buy a new car.Which of the following costs is an opportunity cost in this situation?

Accepted Answer

A) The trip to Europe that you will not be able to take if you buy the car 
B) The cost of the car you are trading in 
C) The cost of toothpaste and soap that you need for the next few months 
D) The cost of your meals for the last week 
A) The trip to Europe that you will not be able to take if you buy the car 
B) The cost of the car you are trading in 
C) The cost of toothpaste and soap that you need for the next few months 
D) The cost of your meals for the last week

Question 5

Harrison Carpets incurred the following costs for March when 3,000 square feet of carpet were produced and sold:
- $18,500 for nylon thread used on carpet
- $5,000 for scotch guard for carpet
- $7,200 for jute backing to reinforce the carpet
- $6,800 for glue to be used in the manufacturing process
- $13,000 for insurance (half for administrative activities, half for production activities)
- $9,000 for production employees' wages
- $6,500 for rent and utilities in the factory
How much are total variable costs if 3,500 square feet of carpet are produced and sold in April?

Accepted Answer

A) $77,000 
B) $46,500 
C) $54,250 
D) $43,750 
A) $77,000 
B) $46,500 
C) $54,250 
D) $43,750

Question 6

Variable costs in total increase or decrease in proportion with changes in the level of business activity.

Accepted Answer

A) True 
 B)False

Question 7

Rincon Gifts had the following costs in May when 400 ceramic pots were produced: materials, $4,200; labor cost, $1,600; depreciation, $800; rent, $700; and other fixed costs, $500.If production changes to 500 units, which of the following costs will stay the same?

Accepted Answer

A) Variable cost per unit 
B) Fixed cost per unit 
C) Total variable cost 
D) Total cost per unit 
A) Variable cost per unit 
B) Fixed cost per unit 
C) Total variable cost 
D) Total cost per unit

Question 8

Classic Loungers is in the process of preparing a production cost budget for August.Actual costs in July for 200 chaise lounge chairs were: $$\begin{array} { l r } 
\text { Materials cost } & 6,000 \
\text { Labor cost } & 8,000 \
\text { Rent } & 2,000 \
\text { Depreciation } & 4,000 \
\text { Other fixed costs } & 5,000 \
\text { Total } & \$ 25,000 \
\hline
\end{array}$$ Each chair was sold for $140 in July.Management estimates that sales will increase to 230 chairs during August if the company lowers the selling price to $130 per chair.Materials and labor are the only variable costs.How much is the incremental cost of producing an extra 30 chairs?

Accepted Answer

A) $1,900 
B) $2,100 
C) $3,750 
D) $(200) 
A) $1,900 
B) $2,100 
C) $3,750 
D) $(200)

Question 9

Walmart and Procter & Gamble are two companies that collaborate in the use of Supply Chain Management (SCM).

Accepted Answer

A) True 
 B)False

Question 10

A production cost budget provides details of planned production amounts and the cost of resources needed for production.

Accepted Answer

A) True 
 B)False

Question 11

Decisions to reward or punish managers are part of the planning and control process.

Accepted Answer

A) True 
 B)False

Question 12

Dent Lab Car Repair projects variable labor costs of $21,500 in July when 8,600 units are produced.If production is expected to drop to 8,000 units in August, what is the expected labor cost in August?

Accepted Answer

A) $21,500 
B) $20,000 
C) $23,113 
D) $20,900 
A) $21,500 
B) $20,000 
C) $23,113 
D) $20,900

Question 13

Triatt Resort has 200 rooms.Each room rents at $130 per night and variable costs total $42 per room per night of occupancy.The fixed costs total $18,700 per month.If Triatt is able to increase occupancy from 70% to 80%, by how much will total costs increase per day during June?

Accepted Answer

A) $840 
B) $2,710 
C) $1,870 
D) $1,760 
A) $840 
B) $2,710 
C) $1,870 
D) $1,760

Question 14

ProLight plans to sell 1,600 white lights that enhance indoor plant growth next year with total budgeted sales of $48,000 and estimated profit of $8,000.Variable costs are projected to be $17.50 per unit.Customer A offers to pay $10,000 to buy 400 lights from ProLight.Total fixed costs are $12,000 per year.This offer does not affect ProLight's other planned operations.What is the incremental cost associated with the offer from Customer A?

Accepted Answer

A) $58,000 
B) $10,000 
C) $48,000 
D) $7,000 
A) $58,000 
B) $10,000 
C) $48,000 
D) $7,000

Question 15

Which one of the following is the last step in the planning and control process?

Accepted Answer

A) Implement a plan. 
B) Construct a plan. 
C) Make decisions based on the evaluation of the results. 
D) Compare actual results to the planned results. 
A) Implement a plan. 
B) Construct a plan. 
C) Make decisions based on the evaluation of the results. 
D) Compare actual results to the planned results.

Question 16

Rom Generators is in the process of preparing a production cost budget for August.Actual costs in July for the production of 60 generators were: $\begin{array}{lr}
\text { Materials cost } & 5,200 \
\text { Labor cost } & 2,600 \
\text { Rent } & 1,200 \
\text { Depreciation } & 1,700 \
\text { Other fixed costs } & 4,600\
\text { Total }&\$15,300
\end{array}$ Materials and labor are the only variable costs.The company has estimated that it can increase sales to 70 generators in August if it changes the selling price of generators to $450 instead of the current $480 per unit.What is expected to occur to the cost per unit given the expected changes?

Accepted Answer

A) It will decline because fixed costs do not increase with increases in volume. 
B) It will decline because selling price per unit declines. 
C) It will increase because more units will be produced. 
D) It will increase because fixed costs do not increase with increases in volume. 
A) It will decline because fixed costs do not increase with increases in volume. 
B) It will decline because selling price per unit declines. 
C) It will increase because more units will be produced. 
D) It will increase because fixed costs do not increase with increases in volume.

Question 17

Flash Eyes sells mascara.In June, it produced and sold 10,000 tubes of mascara.For the month, total variable costs were $21,000 and fixed costs totaled $24,000.In July, the company produced and sold 11,000 tubes of mascara.Which of the following statements is correct for July?

Accepted Answer

A) Total variable costs will be $21,000 
B) Variable costs per unit will be $2.10 
C) Variable costs per unit will be $4.50 
D) Total fixed costs will be $26,400 
A) Total variable costs will be $21,000 
B) Variable costs per unit will be $2.10 
C) Variable costs per unit will be $4.50 
D) Total fixed costs will be $26,400

Question 18

Which one of the following will most likely influence the actions of managers?

Accepted Answer

A) Sunk costs 
B) Performance measures 
C) Noncontrollable costs 
D) GAAP 
A) Sunk costs 
B) Performance measures 
C) Noncontrollable costs 
D) GAAP

Question 19

Budgets show comparisons of current period performance to the planned performance.

Accepted Answer

A) True 
 B)False

Question 20

Managerial accounting stresses that the information provided should be useful to decision makers such as creditors and shareholders.

Accepted Answer

A) True 
 B)False

A Customer Relationship Management System (CRM) might allow a customer to track his/her package as it is being shipped across the country.

Sweet Time Candies projects its factory rent to be $8,000 in August when 4,000 pounds of candy are expected to be produced.If rent is a fixed cost, and if production is expected to increase to 6,000 units in September, what is the expected cost of rent in September?

For which one of the following is a company's treasurer typically held responsible?

You own a car and are trying to decide whether to trade it in and buy a new car.Which of the following costs is an opportunity cost in this situation?

Variable costs in total increase or decrease in proportion with changes in the level of business activity.

Rincon Gifts had the following costs in May when 400 ceramic pots were produced: materials, $4,200; labor cost, $1,600; depreciation, $800; rent, $700; and other fixed costs, $500.If production changes to 500 units, which of the following costs will stay the same?

Walmart and Procter & Gamble are two companies that collaborate in the use of Supply Chain Management (SCM).

A production cost budget provides details of planned production amounts and the cost of resources needed for production.

Decisions to reward or punish managers are part of the planning and control process.

Dent Lab Car Repair projects variable labor costs of $21,500 in July when 8,600 units are produced.If production is expected to drop to 8,000 units in August, what is the expected labor cost in August?

Triatt Resort has 200 rooms.Each room rents at $130 per night and variable costs total $42 per room per night of occupancy.The fixed costs total $18,700 per month.If Triatt is able to increase occupancy from 70% to 80%, by how much will total costs increase per day during June?

Which one of the following is the last step in the planning and control process?

Flash Eyes sells mascara.In June, it produced and sold 10,000 tubes of mascara.For the month, total variable costs were $21,000 and fixed costs totaled $24,000.In July, the company produced and sold 11,000 tubes of mascara.Which of the following statements is correct for July?

Which one of the following will most likely influence the actions of managers?

Budgets show comparisons of current period performance to the planned performance.

Managerial accounting stresses that the information provided should be useful to decision makers such as creditors and shareholders.

Job-Order Costing for Manufacturing and Service Companies

Process Costing

Cost-Volume-Profit Analysis

Variable Costing

Cost Allocation and Activity-Based Costing

The Use of Cost Information in Management Decision Making

Pricing Decisions

Capital Budgeting Decisions

Budgetary Planning and Control

Standard Costs and Variance Analysis

Decentralization and Performance Evaluation

Statement of Cash Flows

Analyzing Financial Statements: a Managerial Perspective

Filters

Exam 1: Managerial Accounting in the Information Age

A Customer Relationship Management System (CRM) might allow a customer to track his/her package as it is being shipped across the country.

Sweet Time Candies projects its factory rent to be $8,000 in August when 4,000 pounds of candy are expected to be produced.If rent is a fixed cost, and if production is expected to increase to 6,000 units in September, what is the expected cost of rent in September?

For which one of the following is a company's treasurer typically held responsible?

You own a car and are trying to decide whether to trade it in and buy a new car.Which of the following costs is an opportunity cost in this situation?

Variable costs in total increase or decrease in proportion with changes in the level of business activity.

Rincon Gifts had the following costs in May when 400 ceramic pots were produced: materials, $4,200; labor cost, $1,600; depreciation, $800; rent, $700; and other fixed costs, $500.If production changes to 500 units, which of the following costs will stay the same?

Walmart and Procter & Gamble are two companies that collaborate in the use of Supply Chain Management (SCM).

A production cost budget provides details of planned production amounts and the cost of resources needed for production.

Decisions to reward or punish managers are part of the planning and control process.

Dent Lab Car Repair projects variable labor costs of $21,500 in July when 8,600 units are produced.If production is expected to drop to 8,000 units in August, what is the expected labor cost in August?

Triatt Resort has 200 rooms.Each room rents at $130 per night and variable costs total $42 per room per night of occupancy.The fixed costs total $18,700 per month.If Triatt is able to increase occupancy from 70% to 80%, by how much will total costs increase per day during June?

Which one of the following is the last step in the planning and control process?

Flash Eyes sells mascara.In June, it produced and sold 10,000 tubes of mascara.For the month, total variable costs were $21,000 and fixed costs totaled $24,000.In July, the company produced and sold 11,000 tubes of mascara.Which of the following statements is correct for July?

Which one of the following will most likely influence the actions of managers?

Budgets show comparisons of current period performance to the planned performance.

Managerial accounting stresses that the information provided should be useful to decision makers such as creditors and shareholders.

Job-Order Costing for Manufacturing and Service Companies

Process Costing

Cost-Volume-Profit Analysis

Variable Costing

Cost Allocation and Activity-Based Costing

The Use of Cost Information in Management Decision Making

Pricing Decisions

Capital Budgeting Decisions

Budgetary Planning and Control

Standard Costs and Variance Analysis

Decentralization and Performance Evaluation

Statement of Cash Flows

Analyzing Financial Statements: a Managerial Perspective

Filters