Question 1

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

Accepted Answer

A) all relevant and irrelevant information 
B) the context of the decision. 
C) all relevant and irrelevant information and the context of the decision. 
D) all material information. 
A) all relevant and irrelevant information 
B) the context of the decision. 
C) all relevant and irrelevant information and the context of the decision. 
D) all material information.

Question 2

If regular sales are given up to take a special order,the lost contribution margin on the regular sales must be subtracted from the contribution margin of the special order to arrive at the total impact on operating income.

Accepted Answer

A) True 
 B)False

Question 3

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) segment taxes. 
A) segment margin. 
B) segment profit. 
C) segment operating margin. 
D) segment taxes.

Question 4

Ellis Dover is a scout for a Major League Baseball team based in Phoenix,Arizona.Ellis needs to travel to Los Angeles,California on June 1 to perform a variety of professional functions prior to the team travelling to Los Angeles to play.If Ellis flies,he could catch a 6 a.m.flight on June 1.In order to perform all of his professional responsibilities,Ellis will need to spend the night and catch a flight on June 2nd to return to Phoenix.If Ellis flies,he will need to rent a car for $38 per day.To cover meals and other incidental expenses,Ellis will receive $45 per day per diem for each day he works out of town.Flights between Phoenix and Los Angeles can be purchased for $89 one way. Phoenix is approximately 300 miles from Los Angeles,a 5-hour drive at speed limits permitted on the freeways connecting the two cities.If he drives from Phoenix to Los Angeles,Ellis would need to leave the afternoon of May 31 and would be reimbursed $.50 per mile.He would need to spend 2 nights in a hotel,the night of May 31 and the night of June 1.He would return to Phoenix by car on June 2nd.The hotel used by the team charges $160 per night.What is the incremental cost of driving over flying?

Accepted Answer

A) $101 
B) $251 
C) $116 
D) $296 Unit 8-1, 
A) $101 
B) $251 
C) $116 
D) $296 Unit 8-1,

Question 5

Which of the following is a reason a company would be willing to accept new business at a loss?

Accepted Answer

A) The new business will allow the company to reduce its fixed costs. 
B) The new business will always cover variable costs. 
C) The new business may result in certain customers influencing other potential customers. 
D) The new business will increase fixed costs. 
A) The new business will allow the company to reduce its fixed costs. 
B) The new business will always cover variable costs. 
C) The new business may result in certain customers influencing other potential customers. 
D) The new business will increase fixed costs.

Question 6

Channing Company is a large internet retailer with fulfillment warehouses in numerous locations throughout the U.S.One of Channing's warehouses has been showing losses over several quarters,and management is considering closing the warehouse.If the warehouse is closed,only the warehouse manager will be retained by Channing.The warehouse manager's annual salary is $65,000.The warehouse fixtures and equipment have no resale value.Following is the most recent income statement for the warehouse:   What would be the impact on Channing's overall operating income if the warehouse is eliminated?

Accepted Answer

A) Increase by $18,600 per year 
B) Decrease by $68,000 per year 
C) Decrease by $86,600 per year 
D) Increase by $46,400 per year 
A) Increase by $18,600 per year 
B) Decrease by $68,000 per year 
C) Decrease by $86,600 per year 
D) Increase by $46,400 per year

Question 7

Which of the following statements is true?

Accepted Answer

A) If the segment margin is negative,the segment should be retained. 
B) If the segment margin is negative,it should remain in operation until a better use can be found for its resources. 
C) If the segment margin is negative,it should file for bankruptcy. 
D) If the segment margin is negative,the operation should be dropped. 
A) If the segment margin is negative,the segment should be retained. 
B) If the segment margin is negative,it should remain in operation until a better use can be found for its resources. 
C) If the segment margin is negative,it should file for bankruptcy. 
D) If the segment margin is negative,the operation should be dropped.

Question 8

Depreciation on a factory machine is an example of which of the following types of cost?

Accepted Answer

A) Variable cost 
B) Sunk cost 
C) Opportunity cost 
D) Period cost 
A) Variable cost 
B) Sunk cost 
C) Opportunity cost 
D) Period cost

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

If regular sales are given up to take a special order,the lost contribution margin on the regular sales must be subtracted from the contribution margin of the special order to arrive at the total impact on operating income.

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

Which of the following is a reason a company would be willing to accept new business at a loss?

Which of the following statements is true?

Depreciation on a factory machine is an example of which of the following types of cost?

Accounting As a Tool for Management

Cost Behavior and Cost Estimation

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

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

If regular sales are given up to take a special order,the lost contribution margin on the regular sales must be subtracted from the contribution margin of the special order to arrive at the total impact on operating income.

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

Which of the following is a reason a company would be willing to accept new business at a loss?

Which of the following statements is true?

Depreciation on a factory machine is an example of which of the following types of cost?

Accounting As a Tool for Management

Cost Behavior and Cost Estimation

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