Question 1

Depreciation of equipment is an example of a(n)

Accepted Answer

A)  relevant cost. 
B)  opportunity cost. 
C)  sunk cost. 
D)  variable cost. 
E)  None of these. 
A)  relevant cost. 
B)  opportunity cost. 
C)  sunk cost. 
D)  variable cost. 
E)  None of these.

Question 2

"The accounting decision making model is not useful in real life because it only looks at the numbers." Critique this statement and give an example for which it does not hold true.

Accepted Answer

The decision-making model described in C

Question 3

David Company produces two types of gears, Gear A and Gear B, with unit contribution margins of $6 and $8, respectively. Each gear must spend time on a special machine. The firm owns five machines that together provide 12,000 hours of machine time per year. Gear A requires 12 minutes of machine time; Gear B requires 24 minutes of machine time.

Accepted Answer

The answer of David Company produces two types of gears,...

Question 4

Refer to Figure 13-9. What is the contribution margin per hour of machine time for Test B?

Accepted Answer

A)  $20.50 
B)  $33 
C)  $16.25 
D)  $16.50 
E)  $18 
A)  $20.50 
B)  $33 
C)  $16.25 
D)  $16.50 
E)  $18

Question 5

Refer to Figure 13-4. What is the contribution margin per hour of machine time for a classic lamp?

Accepted Answer

A)  $26 
B)  $104 
C)  $16 
D)  $65 
E)  $13 
A)  $26 
B)  $104 
C)  $16 
D)  $65 
E)  $13

Question 6

Refer to Figure 13-4. How many of each type of lamp must be sold to optimize total contribution margin?

Accepted Answer

A)  18,000 classic lamps; 0 fancy lamps 
B)  0 classic lamps; 30,000 fancy lamps 
C)  10,000 classic lamps; 10,000 fancy lamps 
D)  0 classic lamps; 9,000 fancy lamps 
E)  90,000 classic lamps; 0 fancy lamps 
A)  18,000 classic lamps; 0 fancy lamps 
B)  0 classic lamps; 30,000 fancy lamps 
C)  10,000 classic lamps; 10,000 fancy lamps 
D)  0 classic lamps; 9,000 fancy lamps 
E)  90,000 classic lamps; 0 fancy lamps

Question 7

Qualitative factors that should be considered when evaluating a make-or-buy decision are

Accepted Answer

A)  the quality of the outside supplier's product. 
B)  whether the outside supplier can provide the needed quantities. 
C)  whether the outside supplier can provide the product when it is needed. 
D)  All of these. 
A)  the quality of the outside supplier's product. 
B)  whether the outside supplier can provide the needed quantities. 
C)  whether the outside supplier can provide the product when it is needed. 
D)  All of these.

Question 8

Refer to Figure 13-5. What is the amount of machine time for model P-4 in terms of percent of a machine hour?

Accepted Answer

A)  10% 
B)  20% 
C)  25% 
D)  30% 
E)  50% 
A)  10% 
B)  20% 
C)  25% 
D)  30% 
E)  50%

Question 9

Sherpa Company manufactures tents and sleeping bags. Tents are priced at $80, have variable cost of $55, and direct fixed costs of $120,000. Sleeping bags are priced at $60, have variable cost of $35, and direct fixed costs of $66,000. Common fixed costs equal $200,000. Last year, the division sold 5,000 tents and 10,000 sleeping bags.

Accepted Answer

The answer of Sherpa Company manufactures tents and sleeping bags....

Question 10

Refer to Figure 13-9. What is the contribution margin per unit of machine time for Test D?

Accepted Answer

A)  $20 
B)  $32 
C)  $8 
D)  $48 
E)  $24 
A)  $20 
B)  $32 
C)  $8 
D)  $48 
E)  $24

Depreciation of equipment is an example of a(n)

"The accounting decision making model is not useful in real life because it only looks at the numbers." Critique this statement and give an example for which it does not hold true.

Refer to Figure 13-9. What is the contribution margin per hour of machine time for Test B?

Refer to Figure 13-4. What is the contribution margin per hour of machine time for a classic lamp?

Refer to Figure 13-4. How many of each type of lamp must be sold to optimize total contribution margin?

Qualitative factors that should be considered when evaluating a make-or-buy decision are

Refer to Figure 13-5. What is the amount of machine time for model P-4 in terms of percent of a machine hour?

Refer to Figure 13-9. What is the contribution margin per unit of machine time for Test D?

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behavior

Cost-Volume-Profit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing, and Inventory Management

Profit Planning

Standard Costing: a Managerial Control Tool

Flexible Budgets and Overhead Analysis

Performance Evaluation and Decentralization

Capital Investment Decisions

Statement of Cash Flows

Financial Statement Analysis

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Exam 13: Short-Run Decision Making: Relevant Costing

Depreciation of equipment is an example of a(n)

"The accounting decision making model is not useful in real life because it only looks at the numbers." Critique this statement and give an example for which it does not hold true.

Refer to Figure 13-9. What is the contribution margin per hour of machine time for Test B?

Refer to Figure 13-4. What is the contribution margin per hour of machine time for a classic lamp?

Refer to Figure 13-4. How many of each type of lamp must be sold to optimize total contribution margin?

Qualitative factors that should be considered when evaluating a make-or-buy decision are

Refer to Figure 13-5. What is the amount of machine time for model P-4 in terms of percent of a machine hour?

Refer to Figure 13-9. What is the contribution margin per unit of machine time for Test D?

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behavior

Cost-Volume-Profit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing, and Inventory Management

Profit Planning

Standard Costing: a Managerial Control Tool

Flexible Budgets and Overhead Analysis

Performance Evaluation and Decentralization

Capital Investment Decisions

Statement of Cash Flows

Financial Statement Analysis

Filters