Question 1

In perfect competition,additional sales will be profitable if ________.

Accepted Answer

A) the marginal cost is less than marginal revenue 
B) sales price exceeds the variable product cost 
C) total variable cost is less than sales price 
D) the fixed cost equals the contribution margin 
A) the marginal cost is less than marginal revenue 
B) sales price exceeds the variable product cost 
C) total variable cost is less than sales price 
D) the fixed cost equals the contribution margin A

Question 2

Value engineering is used primarily during the distribution stage of the value chain.

Accepted Answer

A) True 
 B)False  False

Question 3

In the decision-making process,the accountant's primary role is ________.

Accepted Answer

A) making the decision 
B) providing relevant information 
C) choosing the least costly alternative 
D) choosing the best alternative 
A) making the decision 
B) providing relevant information 
C) choosing the least costly alternative 
D) choosing the best alternative B

Question 4

Markup is the amount by which cost exceeds price.

Accepted Answer

A) True 
 B)False

Question 5

Chocolate Company is considering the production of a new product.Chocolate Company has the following data available:   What is the total variable cost of the product over the product life cycle?

Accepted Answer

A) $204,000 
B) $716,000 
C) $870,000 
D) $880,000 
A) $204,000 
B) $716,000 
C) $870,000 
D) $880,000

Question 6

Arkansas Company provided the following data for its only product:     Assume there is excess capacity.There is a special order outstanding for 1,000 units at $40.00 per unit.If Arkansas Company accepts the special order,net income would ________.

Accepted Answer

A) increase $40,000 
B) increase $11,250 
C) decrease $28,750 
D) decrease $10,000 
A) increase $40,000 
B) increase $11,250 
C) decrease $28,750 
D) decrease $10,000

Question 7

Qualitative aspects of information are those for which measurement in dollars and cents is easy and precise.

Accepted Answer

A) True 
 B)False

Question 8

Factors that are usually important in determining the feasibility of earning the desired target profit margin include inflation and interest rates.

Accepted Answer

A) True 
 B)False

Question 9

The ________ approach is useful for short-run decisions and the ________ approach is useful for long-run decisions.

Accepted Answer

A) contribution; absorption 
B) absorption; contribution 
C) full costing; target costing 
D) full costing; contribution 
A) contribution; absorption 
B) absorption; contribution 
C) full costing; target costing 
D) full costing; contribution

Question 10

Managers may use different markup rates for different categories of costs.

Accepted Answer

A) True 
 B)False

Question 11

Illinois Company has budgeted the following costs for the production of its only product:   Illinois Company has a target profit of $40,000.What is the average target markup percentage for setting prices as a percentage of total production costs?

Accepted Answer

A) 32% 
B) 57% 
C) 68% 
D) 158% 
A) 32% 
B) 57% 
C) 68% 
D) 158%

Question 12

Mexico Company has the following data about its only product:     Mexico Company uses the contribution approach.What is the contribution margin?

Accepted Answer

A) $350,000 
B) $390,000 
C) $440,000 
D) $500,000 
A) $350,000 
B) $390,000 
C) $440,000 
D) $500,000

Question 13

In the decision process,________ is the process of putting a decision into action.

Accepted Answer

A) Prediction 
B) Feedback 
C) Implementation 
D) Evaluation by performance 
A) Prediction 
B) Feedback 
C) Implementation 
D) Evaluation by performance

Question 14

Using absorption costing,the primary classifications of costs on the income statement are by:

Accepted Answer

A) cost behavior patterns 
B) manufacturing departments 
C) major management functions 
D) manufacturing segments 
A) cost behavior patterns 
B) manufacturing departments 
C) major management functions 
D) manufacturing segments

Question 15

Michigan Company has budgeted the following costs for the production of its only product:   Michigan Company has a target profit of $50,000.________ is the target price.

Accepted Answer

A) $30,000 
B) $111,000 
C) $125,000 
D) $175,000 
A) $30,000 
B) $111,000 
C) $125,000 
D) $175,000

Question 16

Oregon Company has the following data about its only product:     Oregon Company uses the contribution approach.What is the contribution margin?

Accepted Answer

A) $450,000 
B) $550,000 
C) $640,000 
D) $700,000 
A) $450,000 
B) $550,000 
C) $640,000 
D) $700,000

Question 17

Prices are most directly related to costs in industries where revenue is based on cost reimbursement.

Accepted Answer

A) True 
 B)False

Question 18

In the short run,the sales price of a good or service must be high enough to cover all costs.

Accepted Answer

A) True 
 B)False

Question 19

The contribution approach to the income statement emphasizes the distinction between ________.

Accepted Answer

A) value chain functions 
B) different functional areas in a firm 
C) different business segments 
D) variable and fixed costs 
A) value chain functions 
B) different functional areas in a firm 
C) different business segments 
D) variable and fixed costs

Question 20

The contribution margin approach to pricing is always the best method.

Accepted Answer

A) True 
 B)False

In perfect competition,additional sales will be profitable if ________.

Value engineering is used primarily during the distribution stage of the value chain.

In the decision-making process,the accountant's primary role is ________.

Markup is the amount by which cost exceeds price.

Chocolate Company is considering the production of a new product.Chocolate Company has the following data available: What is the total variable cost of the product over the product life cycle?

Arkansas Company provided the following data for its only product: Assume there is excess capacity.There is a special order outstanding for 1,000 units at $40.00 per unit.If Arkansas Company accepts the special order,net income would ________.

Qualitative aspects of information are those for which measurement in dollars and cents is easy and precise.

Factors that are usually important in determining the feasibility of earning the desired target profit margin include inflation and interest rates.

The approach is useful for short-run decisions and the approach is useful for long-run decisions.

Managers may use different markup rates for different categories of costs.

Illinois Company has budgeted the following costs for the production of its only product: Illinois Company has a target profit of $40,000.What is the average target markup percentage for setting prices as a percentage of total production costs?

Mexico Company has the following data about its only product: Mexico Company uses the contribution approach.What is the contribution margin?

In the decision process,________ is the process of putting a decision into action.

Using absorption costing,the primary classifications of costs on the income statement are by:

Michigan Company has budgeted the following costs for the production of its only product: Michigan Company has a target profit of $50,000.________ is the target price.

Oregon Company has the following data about its only product: Oregon Company uses the contribution approach.What is the contribution margin?

Prices are most directly related to costs in industries where revenue is based on cost reimbursement.

In the short run,the sales price of a good or service must be high enough to cover all costs.

The contribution approach to the income statement emphasizes the distinction between ________.

The contribution margin approach to pricing is always the best method.

Managerial Accounting, the Business Organization

Introduction to Cost Behavior and Cost-Volume Relationships

Measurement of Cost Behavior

Cost Management Systems and Activity-Based Costing

Relevant Information for Decision Making With a Focus

Introduction to Budgets and Preparing the Master Budget

Flexible Budgets and Variance Analysis

Management Control Systems and Responsibility Accounting

Management Control in Decentralized Organizations

Capital Budgeting

Cost Allocation

Accounting for Overhead Costs

Job-Order Costing and Process-Costing Systems

Basic Accounting: Concepts, techniques, and Conventions

Understanding Corporate Annual Reports: Basic Financial Statements

Understanding and Analyzing Consolidated Financial Statements

Filters

Exam 5: Relevant Information for Decision Making With a Focus

In perfect competition,additional sales will be profitable if ________.

Value engineering is used primarily during the distribution stage of the value chain.

In the decision-making process,the accountant's primary role is ________.

Markup is the amount by which cost exceeds price.

Chocolate Company is considering the production of a new product.Chocolate Company has the following data available: What is the total variable cost of the product over the product life cycle?

Arkansas Company provided the following data for its only product: Assume there is excess capacity.There is a special order outstanding for 1,000 units at $40.00 per unit.If Arkansas Company accepts the special order,net income would ________.

Qualitative aspects of information are those for which measurement in dollars and cents is easy and precise.

Factors that are usually important in determining the feasibility of earning the desired target profit margin include inflation and interest rates.

The ________ approach is useful for short-run decisions and the ________ approach is useful for long-run decisions.

Managers may use different markup rates for different categories of costs.

Illinois Company has budgeted the following costs for the production of its only product: Illinois Company has a target profit of $40,000.What is the average target markup percentage for setting prices as a percentage of total production costs?

Mexico Company has the following data about its only product: Mexico Company uses the contribution approach.What is the contribution margin?

In the decision process,________ is the process of putting a decision into action.

Using absorption costing,the primary classifications of costs on the income statement are by:

Michigan Company has budgeted the following costs for the production of its only product: Michigan Company has a target profit of $50,000.________ is the target price.

Oregon Company has the following data about its only product: Oregon Company uses the contribution approach.What is the contribution margin?

Prices are most directly related to costs in industries where revenue is based on cost reimbursement.

In the short run,the sales price of a good or service must be high enough to cover all costs.

The contribution approach to the income statement emphasizes the distinction between ________.

The contribution margin approach to pricing is always the best method.

Managerial Accounting, the Business Organization

Introduction to Cost Behavior and Cost-Volume Relationships

Measurement of Cost Behavior

Cost Management Systems and Activity-Based Costing

Relevant Information for Decision Making With a Focus

Introduction to Budgets and Preparing the Master Budget

Flexible Budgets and Variance Analysis

Management Control Systems and Responsibility Accounting

Management Control in Decentralized Organizations

Capital Budgeting

Cost Allocation

Accounting for Overhead Costs

Job-Order Costing and Process-Costing Systems

Basic Accounting: Concepts, techniques, and Conventions

Understanding Corporate Annual Reports: Basic Financial Statements

Understanding and Analyzing Consolidated Financial Statements

Filters

The approach is useful for short-run decisions and the approach is useful for long-run decisions.