Question 1

Instead of maximizing income,as measured by traditional accounting methods,the theory of constraints seeks to maximize

Accepted Answer

A) Contribution income. 
B) Throughput contribution. 
C) Quality. 
D) Gross profit. 
A) Contribution income. 
B) Throughput contribution. 
C) Quality. 
D) Gross profit.

Question 2

If a product has a positive segment margin but is not as profitable as other products,what should managers do? What if the segment margin is negative?

Accepted Answer

If the segment margin is posit

Question 3

In evaluating the relevance of specific information,which of the following must the decision maker know

Accepted Answer

A) The classification of any relevant costs. 
B) The behavior of any relevant costs. 
C) The context of the decision. 
D) All of these ans choices are correct. 
A) The classification of any relevant costs. 
B) The behavior of any relevant costs. 
C) The context of the decision. 
D) All of these ans choices are correct.

Question 4

Brandy Company is deciding whether or not to discontinue one of its divisions.The division's contribution margin is $27,000 per year.The fixed costs charged to the division total $32,000,but $15,000 would be eliminated if the division is discontinued.If the division is eliminated,the overall operating income would

Accepted Answer

A)  Decrease by $9,000 
B)  Decrease by $12,000 
C)  Decrease by $15,000 
D)  Increase by $27,000 
A)  Decrease by $9,000 
B)  Decrease by $12,000 
C)  Decrease by $15,000 
D)  Increase by $27,000

Question 5

Which of the following terms indicate that costs are not directly caused by the cost object?

Accepted Answer

A) Allocated 
B) Assigned 
C) Common 
D) All of these ans choices are correct 
A) Allocated 
B) Assigned 
C) Common 
D) All of these ans choices are correct

Question 6

The first step in making any decision is to consider all available alternatives.

Accepted Answer

A) True 
 B)False

Question 7

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 8

Which of the following is $\textbf{     not     }$ relevant to a decision involving the allocation of a single constrained resource among multiple products?

Accepted Answer

A) . 
B) Selling price of each product. 
C) Fixed manufacturing costs. 
D) Number of orders waiting to be filled. 
A) . 
B) Selling price of each product. 
C) Fixed manufacturing costs. 
D) Number of orders waiting to be filled.

Question 9

According to the theory of constraints,which of the following is not a step required to maximize and improve the performance of a value chain?

Accepted Answer

A) Identify the constraint. 
B) Decide how to exploit the constraint. 
C) Elevate the performance of the constraint. 
D) All of these ans choices are required steps. 
A) Identify the constraint. 
B) Decide how to exploit the constraint. 
C) Elevate the performance of the constraint. 
D) All of these ans choices are required steps.

Question 10

In evaluating whether or not to accept a special order,decision makers need to consider only quantitative factors.

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

If a company produces its products in a constrained resource environment,the company should

Accepted Answer

A) Always produce the product with the lowest contribution margin per constrained resource. 
B) Always produce the product with the highest contribution margin per constrained resource. 
C) Produce a mix of products such that opportunity cost is minimized. 
D) Produce a mix of products so that customer service needs and customer preferences are met. 
A) Always produce the product with the lowest contribution margin per constrained resource. 
B) Always produce the product with the highest contribution margin per constrained resource. 
C) Produce a mix of products such that opportunity cost is minimized. 
D) Produce a mix of products so that customer service needs and customer preferences are met.

Question 13

The costs that should be included in an outsourcing decision are the:

Accepted Answer

A) Sunk costs. 
B) Recurring costs. 
C) Relevant costs. 
D) All of these ans choices are correct. 
A) Sunk costs. 
B) Recurring costs. 
C) Relevant costs. 
D) All of these ans choices are correct.

Question 14

When a company accepts an outsourcing offer,managers must take specific action to eliminate internal costs.Which of the following is $\textbf{    not     }$  a quantitative or qualitative factor managers should consider when accepting an outsourcing offer?

Accepted Answer

A) How to reduce direct labor 
B) How to eliminate shipping charges 
C) Impact on employee morale 
D) All of these ans choices are correct. 
A) How to reduce direct labor 
B) How to eliminate shipping charges 
C) Impact on employee morale 
D) All of these ans choices are correct.

Question 15

Paris Manufacturing Company Inc. uses 400 units of Part #4317 each year in the manufacture of one of its products. The company currently produces the part internally, but an outside supplier has offered to provide the part at a price of $20 per part. If Paris chooses to purchase the part from the outside supplier, one third of it’s the fixed manufacturing overhead will be eliminated. The company’s standard unit cost of producing the part is listed below.     Required
Ignoring qualitative factors, should Paris continue to make the parts internally or purchase them from the outside supplier?  Why?

Accepted Answer

@#IMG-DLM& Paris should not continue to make the p

Question 16

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) None of these ans choices are correct 
A) Segment margin 
B) Segment profit 
C) Segment operating margin 
D) None of these ans choices are correct

Question 17

In an outsourcing decision,one important factor is the quality of the outsourced product.

Accepted Answer

A) True 
 B)False

Question 18

Costs that occur only with the implementation of a particular alternative are referred to as

Accepted Answer

A) Avoidable. 
B) Sunk. 
C) Opport 
D) None of these ans choices are correct. 
A) Avoidable. 
B) Sunk. 
C) Opport 
D) None of these ans choices are correct.

Question 19

Power Tools,Inc.produces gas-powered leaf blowers.The company is currently not operating at full capacity.The plant manager is considering making the rewind assembly for the pull cord which is now being purchased from a supplier at $22 each.Power Tools already has the equipment to produce the assembly.The plant manager has analyzed the cost of producing the assemblies and determined that each assembly will require $8 of direct material,$6 of direct labor,and $12 of manufacturing overhead.Two-thirds of the manufacturing overhead is a fixed cost that would not be affected by the decision to manufacture the brackets.Should Paper Moon continue to purchase the brackets or produce them internally?

Accepted Answer

@#IMG-DLM& Power Tool should make the as

Question 20

Throughput contribution equals

Accepted Answer

A) Sales revenue less direct materials cost. 
B) Sales revenue less product costs. 
C) Direct material plus direct labor. 
D) Direct material plus traceable manufacturing overhead. 
A) Sales revenue less direct materials cost. 
B) Sales revenue less product costs. 
C) Direct material plus direct labor. 
D) Direct material plus traceable manufacturing overhead.

Instead of maximizing income,as measured by traditional accounting methods,the theory of constraints seeks to maximize

If a product has a positive segment margin but is not as profitable as other products,what should managers do? What if the segment margin is negative?

In evaluating the relevance of specific information,which of the following must the decision maker know

Which of the following terms indicate that costs are not directly caused by the cost object?

The first step in making any decision is to consider all available alternatives.

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

Which of the following is $\textbf{ not }$ relevant to a decision involving the allocation of a single constrained resource among multiple products?

According to the theory of constraints,which of the following is not a step required to maximize and improve the performance of a value chain?

In evaluating whether or not to accept a special order,decision makers need to consider only quantitative factors.

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

If a company produces its products in a constrained resource environment,the company should

The costs that should be included in an outsourcing decision are the:

When a company accepts an outsourcing offer,managers must take specific action to eliminate internal costs.Which of the following is $\textbf{ not }$ a quantitative or qualitative factor managers should consider when accepting an outsourcing offer?

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

In an outsourcing decision,one important factor is the quality of the outsourced product.

Costs that occur only with the implementation of a particular alternative are referred to as

Throughput contribution equals

Accounting As a Tool for Management

Cost Behavior and Cost Estimation Summary of Questions by Objectives and Blooms Taxonomy

Cost-Volume-Profit Analysis and Pricing Decisions

Product Costs and Job Order Costing

Planning and Forecasting

Performance Evaluation: Variance Analysis

Activity-Based Costing and Activity Based Management

Capital Budgeting

Decentralizing and Performance Evaluation

Performance Evaluation Revisited: a Balanced Approach

Financial Statement Analysis

Statement of Cash Flows

Topic Focus: Process Costing

Topic Focus Variable and Absorption Costing

Topic Focus Standard Costing Systems

Topic Focus Customer Profitability

Filters

Exam 8: Using Accounting Information to Make Managerial Decisions

Instead of maximizing income,as measured by traditional accounting methods,the theory of constraints seeks to maximize

If a product has a positive segment margin but is not as profitable as other products,what should managers do? What if the segment margin is negative?

In evaluating the relevance of specific information,which of the following must the decision maker know

Which of the following terms indicate that costs are not directly caused by the cost object?

The first step in making any decision is to consider all available alternatives.

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

Which of the following is not \textbf{ not } not relevant to a decision involving the allocation of a single constrained resource among multiple products?

According to the theory of constraints,which of the following is not a step required to maximize and improve the performance of a value chain?

In evaluating whether or not to accept a special order,decision makers need to consider only quantitative factors.

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

If a company produces its products in a constrained resource environment,the company should

The costs that should be included in an outsourcing decision are the:

When a company accepts an outsourcing offer,managers must take specific action to eliminate internal costs.Which of the following is not \textbf{ not } not a quantitative or qualitative factor managers should consider when accepting an outsourcing offer?

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

In an outsourcing decision,one important factor is the quality of the outsourced product.

Costs that occur only with the implementation of a particular alternative are referred to as

Throughput contribution equals

Accounting As a Tool for Management

Cost Behavior and Cost Estimation Summary of Questions by Objectives and Blooms Taxonomy

Cost-Volume-Profit Analysis and Pricing Decisions

Product Costs and Job Order Costing

Planning and Forecasting

Performance Evaluation: Variance Analysis

Activity-Based Costing and Activity Based Management

Capital Budgeting

Decentralizing and Performance Evaluation

Performance Evaluation Revisited: a Balanced Approach

Financial Statement Analysis

Statement of Cash Flows

Topic Focus: Process Costing

Topic Focus Variable and Absorption Costing

Topic Focus Standard Costing Systems

Topic Focus Customer Profitability

Filters

Which of the following is $\textbf{ not }$ relevant to a decision involving the allocation of a single constrained resource among multiple products?

When a company accepts an outsourcing offer,managers must take specific action to eliminate internal costs.Which of the following is $\textbf{ not }$ a quantitative or qualitative factor managers should consider when accepting an outsourcing offer?