Question 1

Activity-based costing tends to cause the cost of specialty products to rise.

Accepted Answer

A) True 
 B)False

Question 2

Activity-based costing

Accepted Answer

A)  is often used in companies with highly automated processes. 
B)  accumulates and classifies overhead costs based on the underlying cost behavior. 
C)  is often used by companies producing heterogeneous products in large quantities. 
D)  indicates that low-volume, specialty items are usually more costly than high-volume, easy to produce items. 
E)  all of the above 
A)  is often used in companies with highly automated processes. 
B)  accumulates and classifies overhead costs based on the underlying cost behavior. 
C)  is often used by companies producing heterogeneous products in large quantities. 
D)  indicates that low-volume, specialty items are usually more costly than high-volume, easy to produce items. 
E)  all of the above

Question 3

The following is Raik Corporation's 2010 year-end balance sheet and 2010 income statement.
	 
Required
a.	Calculate Raik's profit margin. (Round to one decimal.)
b.	Calculate Raik's asset turnover ratio. (Round to one decimal.)
c.	Calculate Raik's return on investment. (Round to one decimal.)

Accepted Answer

a. Profit margin = Income ÷ Revenues = $

Question 4

A sales price variance is calculated as (actual selling price - budgeted selling price) multiplied by budgeted units to be sold.

Accepted Answer

A) True 
 B)False

Question 5

Product/process level costs should, in theory, not be assigned to units of product.

Accepted Answer

A) True 
 B)False

Question 6

An investment center manager's performance can be evaluated on the basis of

Accepted Answer

The answer of An investment center manager's performance can be...

Question 7

If a cost driver is eliminated,

Accepted Answer

The answer of If a cost driver is eliminated, ...

Question 8

Benchmarking should only occur among companies in the same industry.

Accepted Answer

A) True 
 B)False

Question 9

Over the past four years, Denise Smart was granted the right to buy 1,000 shares of her company's $20 par-value common stock at $65 per share. The price of the common stock is currently $48 per share. Smart's stock options are considered

Accepted Answer

A)  worthless. 
B)  short-term losses. 
C)  underwater. 
D)  sunk investments. 
E)  none of the above. 
A)  worthless. 
B)  short-term losses. 
C)  underwater. 
D)  sunk investments. 
E)  none of the above.

Question 10

Performance rewards should encourage employees to adopt both a short-run and long-run perspective.

Accepted Answer

A) True 
 B)False

Question 11

It takes ten minutes for Robbin Co. to assemble one ceiling fan in its production facility. This time is

Accepted Answer

A)    
B)    
C)    
D)    
E)    
A)    
B)    
C)    
D)    
E)

Question 12

Use the following information to answer questions 
Faust Corporation manufactures cleaning fluid. During 2010, Faust's salespeople sold 1,700,000 bottles of cleaning fluid at $1.80 per bottle. Faust budgeted that salespeople would sell 1,600,000 bottles of cleaning fluid at $1.90 per bottle.
-What is Faust's sales volume variance?

Accepted Answer

A)  $ 20,000 favorable 
B)  $ 20,000 unfavorable 
C)  $170,000 favorable 
D)  $190,000 favorable 
E)  $190,000 unfavorable 
A)  $ 20,000 favorable 
B)  $ 20,000 unfavorable 
C)  $170,000 favorable 
D)  $190,000 favorable 
E)  $190,000 unfavorable

Question 13

Use the following information to answer questions 
Following are Greyson Corporation's 2010 year-end balance sheet and 2010 income statements.
‪  
-What is Greyson's 2010 asset turnover ratio?

Accepted Answer

A)  12.0% 
B)  19.2% 
C)  62.5% 
D)  120.0% 
E)  160.0% 
A)  12.0% 
B)  19.2% 
C)  62.5% 
D)  120.0% 
E)  160.0%

Question 14

Use the following information to answer questions 
Rather Corp. produces two types of computers: laptops and netbooks. Overhead cost pools and activity information for the year are as follows:
  
-Assume that activity-based costing is used to assign overhead costs to computers. What amount of utility cost would be assigned to netbook computers?

Accepted Answer

A)  $184,800 
B)  $196,326 
C)  $223,674 
D)  $235,200 
E)  none of the above 
A)  $184,800 
B)  $196,326 
C)  $223,674 
D)  $235,200 
E)  none of the above

Question 15

The right to buy a company's stock at a future date at a guaranteed price, such as the current market price, is a(an)

Accepted Answer

A)  stock option. 
B)  call. 
C)  IRA. 
D)  401(k) plan. 
E)  put. 
A)  stock option. 
B)  call. 
C)  IRA. 
D)  401(k) plan. 
E)  put.

Question 16

In determining performance in a cost center, actual costs incurred should be compared to

Accepted Answer

A)  budgeted costs at the budgeted level of activity. 
B)  budgeted costs at the actual level of activity. 
C)  standard costs at the budgeted level of activity. 
D)  allocated costs at the actual level of activity. 
E)  none of the above. 
A)  budgeted costs at the budgeted level of activity. 
B)  budgeted costs at the actual level of activity. 
C)  standard costs at the budgeted level of activity. 
D)  allocated costs at the actual level of activity. 
E)  none of the above.

Question 17

A primary goal of activity-based management in a manufacturing company is to streamline production processes.

Accepted Answer

A) True 
 B)False

Question 18

Business-value-added activities create costs that must be covered by the selling prices of a company's goods or services.

Accepted Answer

A) True 
 B)False

Question 19

If only team incentives are offered, then the reward system may be ineffective.

Accepted Answer

A) True 
 B)False

Question 20

Value-added activities increase a product or service's worth to an organization.

Accepted Answer

A) True 
 B)False

Activity-based costing tends to cause the cost of specialty products to rise.

Activity-based costing

The following is Raik Corporation's 2010 year-end balance sheet and 2010 income statement. Required a. Calculate Raik's profit margin. (Round to one decimal.) b. Calculate Raik's asset turnover ratio. (Round to one decimal.) c. Calculate Raik's return on investment. (Round to one decimal.)

A sales price variance is calculated as (actual selling price - budgeted selling price) multiplied by budgeted units to be sold.

Product/process level costs should, in theory, not be assigned to units of product.

An investment center manager's performance can be evaluated on the basis of

If a cost driver is eliminated,

Benchmarking should only occur among companies in the same industry.

Over the past four years, Denise Smart was granted the right to buy 1,000 shares of her company's $20 par-value common stock at $65 per share. The price of the common stock is currently $48 per share. Smart's stock options are considered

Performance rewards should encourage employees to adopt both a short-run and long-run perspective.

It takes ten minutes for Robbin Co. to assemble one ceiling fan in its production facility. This time is

Use the following information to answer questions Following are Greyson Corporation's 2010 year-end balance sheet and 2010 income statements. ‪ -What is Greyson's 2010 asset turnover ratio?

The right to buy a company's stock at a future date at a guaranteed price, such as the current market price, is a(an)

In determining performance in a cost center, actual costs incurred should be compared to

A primary goal of activity-based management in a manufacturing company is to streamline production processes.

Business-value-added activities create costs that must be covered by the selling prices of a company's goods or services.

If only team incentives are offered, then the reward system may be ineffective.

Value-added activities increase a product or service's worth to an organization.

An Introduction to the Role of Accounting in the Business World

Concepts and Elements Underlying Accounting

The Mechanics of Double-Entry Bookkeeping

Cash, Short-Term Investments and Accounts Receivable

Inventory

Long-Term Assets: Property, Plant Equipment and Intangibles

Liabilities

Stockholders Equity

The Corporate Income Statement and Financial Analysis

Statement of Cash Flows

Managerial Accounting

Cost-Volume-Profit Analysis

The Master Budget

Filters

Exam 14: Activity-Based Management and Performance Measurementreward

Activity-based costing tends to cause the cost of specialty products to rise.

Activity-based costing

The following is Raik Corporation's 2010 year-end balance sheet and 2010 income statement. Required a. Calculate Raik's profit margin. (Round to one decimal.) b. Calculate Raik's asset turnover ratio. (Round to one decimal.) c. Calculate Raik's return on investment. (Round to one decimal.)

A sales price variance is calculated as (actual selling price - budgeted selling price) multiplied by budgeted units to be sold.

Product/process level costs should, in theory, not be assigned to units of product.

An investment center manager's performance can be evaluated on the basis of

If a cost driver is eliminated,

Benchmarking should only occur among companies in the same industry.

Over the past four years, Denise Smart was granted the right to buy 1,000 shares of her company's $20 par-value common stock at $65 per share. The price of the common stock is currently $48 per share. Smart's stock options are considered

Performance rewards should encourage employees to adopt both a short-run and long-run perspective.

It takes ten minutes for Robbin Co. to assemble one ceiling fan in its production facility. This time is

Use the following information to answer questions Following are Greyson Corporation's 2010 year-end balance sheet and 2010 income statements. ‪ -What is Greyson's 2010 asset turnover ratio?

The right to buy a company's stock at a future date at a guaranteed price, such as the current market price, is a(an)

In determining performance in a cost center, actual costs incurred should be compared to

A primary goal of activity-based management in a manufacturing company is to streamline production processes.

Business-value-added activities create costs that must be covered by the selling prices of a company's goods or services.

If only team incentives are offered, then the reward system may be ineffective.

Value-added activities increase a product or service's worth to an organization.

An Introduction to the Role of Accounting in the Business World

Concepts and Elements Underlying Accounting

The Mechanics of Double-Entry Bookkeeping

Cash, Short-Term Investments and Accounts Receivable

Inventory

Long-Term Assets: Property, Plant Equipment and Intangibles

Liabilities

Stockholders Equity

The Corporate Income Statement and Financial Analysis

Statement of Cash Flows

Managerial Accounting

Cost-Volume-Profit Analysis

The Master Budget

Filters