Question 1

Engineered costs may be either variable or fixed.

Accepted Answer

A) True 
 B)False

Question 2

Assume actual output exceeds the level of output in the original budget.Costs in which of the following categories will 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 3

The term "committed costs" refers to costs that

Accepted Answer

A) 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) are likely to respond to the amount of attention devoted to them by a specified manager. 
C) 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) fluctuate in total in response to small changes in the rate of utilization of capacity. 
A) 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) are likely to respond to the amount of attention devoted to them by a specified manager. 
C) 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) fluctuate in total in response to small changes in the rate of utilization of capacity.

Question 4

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 5

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 6

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

Accepted Answer

A) True 
 B)False

Question 7

The use of options and forward contracts to manage price risk is referred to as ___________________.

Accepted Answer

The answer of The use of options and forward contracts...

Question 8

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 9

If economic activity slows down,total costs could easily decline in which of the following categories?

Accepted Answer

A) variable costs and committed fixed costs 
B) variable costs and discretionary fixed costs 
C) variable costs only 
D) committed fixed costs only 
A) variable costs and committed fixed costs 
B) variable costs and discretionary fixed costs 
C) variable costs only 
D) committed fixed costs only

Question 10

Epplin Company
The following information is provided for Epplin Company for the month of September:
$\begin{array}{ll}
\underline{\text { Actual }} &\underline{ \text { Standard }} \
\text { 1,800 }\text { units } &5 \text { DLHs per unit @ } \$ 10.00 \text { per DLH } \
8,900 \text { DLHs @ } \$ 10.50 \text { per DLH } & \text { VOH rate per DLH } \$ .75  \
\text { Variable OH } \$ 6,400 & \text { FOH rate per DLH } \$ 1.90 \
\text { Fixed OH } \$ 17,500 &\text { Budgeted FOH \$16,910 }
\end{array}$

Refer to Epplin Company.What is the fixed spending variance?

Accepted Answer

A) $590 U 
B) $590 F 
C) $190 F 
D) $190 U 
A) $590 U 
B) $590 F 
C) $190 F 
D) $190 U

Question 11

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

Accepted Answer

Committed fixed costs are those costs th

Question 12

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 13

Which of the following does not create a specific price level change?

Accepted Answer

A) change in production technology 
B) change in the rate of inflation 
C) changes due to supply and demand 
D) changes in the number of competing suppliers 
A) change in production technology 
B) change in the rate of inflation 
C) changes due to supply and demand 
D) changes in the number of competing suppliers

Question 14

Having sufficient cash to pay liabilities as they become due is referred to as an organization's ________________________.

Accepted Answer

The answer of Having sufficient cash to pay liabilities as...

Question 15

The greatest degree of control for committed fixed costs is exerted

Accepted Answer

A) in the post-investment audit. 
B) during the life of the investment. 
C) prior to acquisition. 
D) by equipment operators. 
A) in the post-investment audit. 
B) during the life of the investment. 
C) prior to acquisition. 
D) by equipment operators.

Question 16

A flexible budget compares actual costs to budgeted costs at several activity levels.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is an example of a committed fixed cost?

Accepted Answer

A) investment in production facilities 
B) advertising 
C) preventive maintenance 
D) employee training programs 
A) investment in production facilities 
B) advertising 
C) preventive maintenance 
D) employee training programs

Question 18

Which of the following is least likely to be a discretionary cost?

Accepted Answer

A) salaries of salespeople 
B) advertising 
C) maintenance 
D) insurance 
A) salaries of salespeople 
B) advertising 
C) maintenance 
D) insurance

Question 19

Depreciation of fixed assets is considered to be a discretionary cost.

Accepted Answer

A) True 
 B)False

Question 20

Adams Company has made the following information available for the month of March:
 $\begin{array}{ll}
\underline{\text { Actual  }} &\underline{\text { standards }} \
\text {1,500 units produced} &  2 \mathrm{DLH} \text { per unit } @ \$ 10\\
\text { 2,400 DLH used@\$10.25 per DLH } &\
\end{array}$
Assume that Adams Company hires part-time employees for production of these units.
Compute the price and efficiency variances.

Accepted Answer

Assume that Adams Company hire

Engineered costs may be either variable or fixed.

Assume actual output exceeds the level of output in the original budget.Costs in which of the following categories will exceed the original budget?

The term "committed costs" refers to costs that

A company would be reducing its discretionary costs if it

A ratio of outputs to inputs is a(n)

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

The use of options and forward contracts to manage price risk is referred to as ___________________.

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

If economic activity slows down,total costs could easily decline in which of the following categories?

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

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

Which of the following does not create a specific price level change?

Having sufficient cash to pay liabilities as they become due is referred to as an organization's ________________________.

The greatest degree of control for committed fixed costs is exerted

A flexible budget compares actual costs to budgeted costs at several activity levels.

Which of the following is an example of a committed fixed cost?

Which of the following is least likely to be a discretionary cost?

Depreciation of fixed assets is considered to be a discretionary cost.

Adams Company has made the following information available for the month of March: 1,500 units produced 2 per unit @\ 10 \ 2,400 DLH used@ \1 0.25 per DLH Assume that Adams Company hires part-time employees for production of these units. Compute the price and efficiency variances.

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

Engineered costs may be either variable or fixed.

Assume actual output exceeds the level of output in the original budget.Costs in which of the following categories will exceed the original budget?

The term "committed costs" refers to costs that

A company would be reducing its discretionary costs if it

A ratio of outputs to inputs is a(n)

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

The use of options and forward contracts to manage price risk is referred to as ___________________.

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

If economic activity slows down,total costs could easily decline in which of the following categories?

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

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

Which of the following does not create a specific price level change?

Having sufficient cash to pay liabilities as they become due is referred to as an organization's ________________________.

The greatest degree of control for committed fixed costs is exerted

A flexible budget compares actual costs to budgeted costs at several activity levels.

Which of the following is an example of a committed fixed cost?

Which of the following is least likely to be a discretionary cost?

Depreciation of fixed assets is considered to be a discretionary cost.

Adams Company has made the following information available for the month of March: 1,500 units produced 2 per unit @\ 10 \ 2,400 DLH used@ \1 0.25 per DLH Assume that Adams Company hires part-time employees for production of these units. Compute the price and efficiency variances.

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