Question 1

Information overload can lead to

Accepted Answer

A) information fatigue syndrome. 
B) data overload condition. 
C) sunk costs. 
D) bottlenecks. 
A) information fatigue syndrome. 
B) data overload condition. 
C) sunk costs. 
D) bottlenecks.

Question 2

Elton's Electronics is a wholesale distributer for TVs and other electronics and appliances.The selling price of TV Model 83G7 is $799.The standard cost for Model 83G7 includes $300 direct material, $30 direct labor and $200 manufacturing overhead (75% variable, 25% fixed).Elton has received a special order for 200 Model 83G7s at a price of $450 each.The only additional cost of accepting the special order is a sales commission of $9 per unit.The special order is to a retail store that will not be in competition with any other Elton customers.Ignoring qualitative factors, should Elton accept the special order?

Accepted Answer

@#IMG-DLM& Elton should not accept the special ord

Question 3

A company can increase its throughput by which of the following actions?

Accepted Answer

A) Increasing sales 
B) Decreasing direct labor costs 
C) Increasing contribution margin 
D) Decreasing manufacturing overhead 
A) Increasing sales 
B) Decreasing direct labor costs 
C) Increasing contribution margin 
D) Decreasing manufacturing overhead

Question 4

Which of the following is least likely to be a constrained resource?

Accepted Answer

A) Flour to make donuts 
B) Beads to make necklaces 
C) Specialized equipment 
D) Monthly rent on the factory 
A) Flour to make donuts 
B) Beads to make necklaces 
C) Specialized equipment 
D) Monthly rent on the factory

Question 5

Which of the following is not a qualitative issue that must be considered before reaching a decision to outsource?

Accepted Answer

A) Quality of the outsourced product 
B) Number of employees terminated 
C) Ability to bring outsourced item back in house 
D) Speed of the outsourced product 
A) Quality of the outsourced product 
B) Number of employees terminated 
C) Ability to bring outsourced item back in house 
D) Speed of the outsourced product

Question 6

Relevant information meets two criteria: (1) it differs between the alternatives and (2) the differences have occurred in the past.

Accepted Answer

A) True 
 B)False

Question 7

Calculations which show the additional impact of one alternative over another are referred to as

Accepted Answer

A) relevant analysis. 
B) avoidable analysis. 
C) incremental analysis. 
D) opportunity analysis. 
A) relevant analysis. 
B) avoidable analysis. 
C) incremental analysis. 
D) opportunity analysis.

Question 8

Knoll Manufacturing has manufacturing facilities in several locations.One of Knoll's facilities has been showing losses over several quarters, and management is considering closing the facility.If the facility is closed, only two part-time employees will be retained by Knoll.The annual wage of each part-time worker is $14,400.This particular location has been in operation for many years.As a result, the manufacturing equipment has no resale value.Following is the most recent income statement for the facility:   What would be the impact on Knoll's overall operating income if the manufacturing facility is eliminated?

Accepted Answer

A) Increase by $81,800 per year 
B) Decrease by $241,000 per year 
C) Decrease by $226,600 per year 
D) Increase by $322,800 per year 
A) Increase by $81,800 per year 
B) Decrease by $241,000 per year 
C) Decrease by $226,600 per year 
D) Increase by $322,800 per year

Question 9

All variable costs are relevant and all fixed costs are irrelevant.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is not a long-term tactical benefit of outsourcing a company's operations?

Accepted Answer

A) Frees managers' time to focus on more important issues 
B) Accelerates the benefits of process reengineering 
C) Releases capital funds for use in other projects 
D) Redirects resources to core activities 
A) Frees managers' time to focus on more important issues 
B) Accelerates the benefits of process reengineering 
C) Releases capital funds for use in other projects 
D) Redirects resources to core activities

Question 11

Variable costs associated with a segment's sales are sometimes avoidable.

Accepted Answer

A) True 
 B)False

Question 12

The costs that should be included in an outsourcing decision are

Accepted Answer

A) sunk costs. 
B) recurring costs. 
C) relevant costs. 
D) fixed costs. 
A) sunk costs. 
B) recurring costs. 
C) relevant costs. 
D) fixed costs.

Question 13

Costs such as rent and the production manager's salary are non-differential but are relevant.

Accepted Answer

A) True 
 B)False

Question 14

Many small businesses hire a local CPA firm to process their payroll.This is an example of

Accepted Answer

A) transfer pricing. 
B) offshoring. 
C) offsourcing. 
D) outsourcing. 
A) transfer pricing. 
B) offshoring. 
C) offsourcing. 
D) outsourcing.

Question 15

Mallory Manufacturing produces thermal tents and sleeping bags.The company's products are in high demand due to the quality and durability of the products.Mallory estimates it could sell 600 tents per month and 600 sleeping bags per month.Following is information for each of these products:   Mallory has 800 machine hours available each month.If Mallory allocates its production capacity between the tents and sleeping bags so that it maximizes the company's contribution margin, what will the contribution margin be?

Accepted Answer

A) $14,000 
B) $13,765 
C) $13,550 
D) $19,500 
A) $14,000 
B) $13,765 
C) $13,550 
D) $19,500

Question 16

Mallory Manufacturing produces thermal tents and sleeping bags.The company's products are in high demand due to the quality and durability of the products.Mallory estimates it could sell 600 tents per month and 600 sleeping bags per month.Following is information for each of these products:   Mallory has 800 machine hours available each month.In order to maximize the company's total contribution margin, how should Mallory allocate its production capacity between the tents and sleeping bags?

Accepted Answer

A) 1,000 sleeping bags and 0 tents 
B) 600 sleeping bags and 290 tents 
C) 600 tents and 175 sleeping bags 
D) 727 tents and 0 sleeping bags 
A) 1,000 sleeping bags and 0 tents 
B) 600 sleeping bags and 290 tents 
C) 600 tents and 175 sleeping bags 
D) 727 tents and 0 sleeping bags

Question 17

Which of the following is a reason a company would be willing to accept new business at a loss?

Accepted Answer

A) The new business will allow the company to reduce its fixed costs. 
B) The new business will always cover variable costs. 
C) The new business may result in certain customers influencing other potential customers. 
D) The new business will increase fixed costs. 
A) The new business will allow the company to reduce its fixed costs. 
B) The new business will always cover variable costs. 
C) The new business may result in certain customers influencing other potential customers. 
D) The new business will increase fixed costs.

Question 18

Ledbetter, Inc.has the following production and cost data for three of its products, Basic, Standard and Deluxe:   A total of 8,000 hours is available each period for the production of the three products.The demand for both products is strong and Ledbetter has orders for 1,200 of Basic, 3,000 of Standard and 800 of Deluxe.Ignoring qualitative issues, how many of each product should Ledbetter produce?

Accepted Answer

Basic $40 ÷ 2 = $20 contribution margin

Question 19

The contribution margin of a particular segment less any direct fixed costs is called

Accepted Answer

A) segment margin. 
B) segment profit. 
C) segment operating margin. 
D) segment taxes. 
A) segment margin. 
B) segment profit. 
C) segment operating margin. 
D) segment taxes.

Question 20

An opportunity cost is the contribution margin of the next-best alternative use of the facilities.

Accepted Answer

A) True 
 B)False

Information overload can lead to

A company can increase its throughput by which of the following actions?

Which of the following is least likely to be a constrained resource?

Which of the following is not a qualitative issue that must be considered before reaching a decision to outsource?

Relevant information meets two criteria: (1) it differs between the alternatives and (2) the differences have occurred in the past.

Calculations which show the additional impact of one alternative over another are referred to as

All variable costs are relevant and all fixed costs are irrelevant.

Which of the following is not a long-term tactical benefit of outsourcing a company's operations?

Variable costs associated with a segment's sales are sometimes avoidable.

The costs that should be included in an outsourcing decision are

Costs such as rent and the production manager's salary are non-differential but are relevant.

Many small businesses hire a local CPA firm to process their payroll.This is an example of

Which of the following is a reason a company would be willing to accept new business at a loss?

The contribution margin of a particular segment less any direct fixed costs is called

An opportunity cost is the contribution margin of the next-best alternative use of the facilities.

Accounting As a Tool for Management

Cost Behavior and Cost Estimation

Costvolumeprofit Analysis and Pricing Decisions

Product Costs and Job Order Costing

Planning and Forecasting in a Manufacturing Setting

Performance Evaluation: Variance Analysis

Activity-Based Costing and Activity-Based Management

Using Accounting Information to Make Managerial Decisions

Capital Budgeting

Decentralization and Performance Evaluation

Performance Evaluation Revisited: a Balanced Approach

Financial Statement Analysis

Filters

Exam 8: Using Accounting Information to Make Managerial Decisions

Information overload can lead to

A company can increase its throughput by which of the following actions?

Which of the following is least likely to be a constrained resource?

Which of the following is not a qualitative issue that must be considered before reaching a decision to outsource?

Relevant information meets two criteria: (1) it differs between the alternatives and (2) the differences have occurred in the past.

Calculations which show the additional impact of one alternative over another are referred to as

All variable costs are relevant and all fixed costs are irrelevant.

Which of the following is not a long-term tactical benefit of outsourcing a company's operations?

Variable costs associated with a segment's sales are sometimes avoidable.

The costs that should be included in an outsourcing decision are

Costs such as rent and the production manager's salary are non-differential but are relevant.

Many small businesses hire a local CPA firm to process their payroll.This is an example of

Which of the following is a reason a company would be willing to accept new business at a loss?

The contribution margin of a particular segment less any direct fixed costs is called

An opportunity cost is the contribution margin of the next-best alternative use of the facilities.

Accounting As a Tool for Management

Cost Behavior and Cost Estimation

Costvolumeprofit Analysis and Pricing Decisions

Product Costs and Job Order Costing

Planning and Forecasting in a Manufacturing Setting

Performance Evaluation: Variance Analysis

Activity-Based Costing and Activity-Based Management

Using Accounting Information to Make Managerial Decisions

Capital Budgeting

Decentralization and Performance Evaluation

Performance Evaluation Revisited: a Balanced Approach

Financial Statement Analysis

Filters