Question 1

Offshoring is another term for outsourcing.

Accepted Answer

A) True 
 B)False

Question 2

An auto body shop is trying to decide whether or not to purchase a new piece of diagnostic equipment.Which of the following costs would not be relevant to the decision?

Accepted Answer

A) The cost of the new equipment 
B) The increase in property taxes as a result of purchasing the expensive equipment 
C) The book value of the old equipment 
D) The cost of training a technician to operate the equipment 
A) The cost of the new equipment 
B) The increase in property taxes as a result of purchasing the expensive equipment 
C) The book value of the old equipment 
D) The cost of training a technician to operate the equipment

Question 3

Your friend purchased a non-refundable ticket to a popular Broadway play for Friday night.Yesterday she was invited to spend Friday on the lake with a group of sorority sisters.Her only cost will be for personal items such as lunch.The lake is two hours away from her apartment and the play is another hour in the opposite direction.She knows that if she goes to the lake,she will not get back in time to attend the play.Which of the following is not a relevant cost in making her decision on whether to go to the play or to the lake?

Accepted Answer

A) The price of the ticket 
B) The price of eating out at the lake 
C) The price of renting an umbrella at the lake 
D) The price of driving to the play 
A) The price of the ticket 
B) The price of eating out at the lake 
C) The price of renting an umbrella at the lake 
D) The price of driving to the play

Question 4

Which of the following is not relevant in the decision to accept a special order?

Accepted Answer

A) Depreciation on factory equipment 
B) Variable cost of the product 
C) Sales commissions based on a percentage of the sales price 
D) Direct labor associated with the product 
A) Depreciation on factory equipment 
B) Variable cost of the product 
C) Sales commissions based on a percentage of the sales price 
D) Direct labor associated with the product

Question 5

The theory of constraints seeks to maximize

Accepted Answer

A) Inventory control. 
B) Contribution margin. 
C) Capacity. 
D) Throughput contribution. 
A) Inventory control. 
B) Contribution margin. 
C) Capacity. 
D) Throughput contribution.

Question 6

Paris Manufacturing Company Inc.uses 400

Accepted Answer

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

Question 7

Which of the following is not a criterion of relevant information?

Accepted Answer

A) It differs between the alternatives. 
B) Differences among alternatives will occur in the future. 
C) Differences among the alternatives must have occurred in the past and must occur in the future. 
D) It differs between the alternatives and differences among alternatives will occur in the future. 
A) It differs between the alternatives. 
B) Differences among alternatives will occur in the future. 
C) Differences among the alternatives must have occurred in the past and must occur in the future. 
D) It differs between the alternatives and differences among alternatives will occur in the future.

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

Cost that has been incurred in the past is referred to as

Accepted Answer

A) an avoidable cost. 
B) a sunk cost. 
C) an opportunity cost. 
D) a relevant cost. 
A) an avoidable cost. 
B) a sunk cost. 
C) an opportunity cost. 
D) a relevant cost.

Question 10

Which of the following laws prohibits companies from offering the same item to different customers at different prices?

Accepted Answer

A) NAFTA 
B) Foreign Corrupt Practices Act of 1977 
C) Robinson-Patman Act of 1936 
D) Sarbanes-Oxley Act of 2002 
A) NAFTA 
B) Foreign Corrupt Practices Act of 1977 
C) Robinson-Patman Act of 1936 
D) Sarbanes-Oxley Act of 2002

Question 11

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) Identifying the constraint 
B) Deciding how to exploit the constraint 
C) Subordinating and synchronize everything else to the first two decisions 
D) Determining customer demand 
A) Identifying the constraint 
B) Deciding how to exploit the constraint 
C) Subordinating and synchronize everything else to the first two decisions 
D) Determining customer demand

Question 12

Given the following data,what is the total relevant cost of internal production of 50

Accepted Answer

A) $1,800 
B) $2,100 
C) $4,100 
D) $1,000 
A) $1,800 
B) $2,100 
C) $4,100 
D) $1,000

Question 13

Unavoidable costs are incurred under all alternatives,thus they are always relevant.

Accepted Answer

A) True 
 B)False

Question 14

Logan's,Inc.has the following production and cost data for two of its products,Basic and Supreme:
   
A total of 40,000 hours is available each period for the production of the two products The demand for both products is strong and Logan is not sure it can fill all orders expected to be received.
Required: 
a.Ignoring qualitative issues,for which of the two products should Logan focus on filling orders first?
b.List three alternatives that Logan should consider in order to produce more units within the 40,000 hours?

Accepted Answer

a. Basic $160/4 = $40 contribution margi

Question 15

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 opport 
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 opport

Question 16

Holt Manufacturing Company produces three products in its Dallas factory.Data relating to the products are given below:
   A total of 8,200 hours are available in the Dallas facility.
Required: 
a.How many hours will be required to satisfy the demand for all three products?
b.How much of each product should be produced to maximize Hold's operating income?
Unit 8-4,

Accepted Answer

a. @#IMG-DLM& Total time = 10,600 hours

Question 17

Which of the following combinations results in irrelevant information?

Accepted Answer

A) Occurs in the past and is unavoidable 
B) Occurs in the past and is avoidable 
C) Occurs in the future and is unavoidable 
D) Occurs in the future and is avoidable 
A) Occurs in the past and is unavoidable 
B) Occurs in the past and is avoidable 
C) Occurs in the future and is unavoidable 
D) Occurs in the future and is avoidable

Question 18

ABC Company manufactures sleeping bags.It has the capacity to produce 6,000 sleeping bags a year,but only produced 5,700 bags that could be sold because 5% of the bags had zippers that were defective.Under the theory of constraints,which of the following would be the most likely action to eliminate the problem of defective zippers?

Accepted Answer

A) Outsourcing the installation of zippers. 
B) Redesigning the sleeping bag to have a longer zipper. 
C) Purchasing a better-quality zipper. 
D) Replacing sleeping bag production with a product that does not have defects. 
A) Outsourcing the installation of zippers. 
B) Redesigning the sleeping bag to have a longer zipper. 
C) Purchasing a better-quality zipper. 
D) Replacing sleeping bag production with a product that does not have defects.

Question 19

Once viable alternatives have been identified by a decision maker,which of the following is not a step that should be followed?

Accepted Answer

A) Develop a list of relevant revenues and costs. 
B) Identify any qualitative factors that may affect the decision. 
C) Reconsider nonviable alternatives. 
D) Choose the alternative that produces the greatest benefit or the lowest cost. 
A) Develop a list of relevant revenues and costs. 
B) Identify any qualitative factors that may affect the decision. 
C) Reconsider nonviable alternatives. 
D) Choose the alternative that produces the greatest benefit or the lowest cost.

Question 20

Brandon,Inc.is a consulting firm headquartered in Dallas.Trish Hardin,CEO of the company plans to attend a professional conference in Atlanta where she intends to network in the pursuit of business.She enjoys shopping and dining in Atlanta and is looking forward to the trip.She registered for the conference and made hotel and airfare reservations six weeks ago.Her airline ticket and registration fee are non-refundable,but it is not too late to cancel her hotel room.The day before the conference,a company executive from El Dorado calls and wishes to meet with Trish the next day regarding a consulting project.If Trish chooses to make the trip to El Dorado,she will drive.Both trips will require an overnight stay.Trish does not have a prediction of how much revenue either trip may generate.Costs related to the two trips are as follows:
   Required: 
a.Which of the above costs are not relevant?
b.Without considering qualitative factors,which alternative will Trish choose? Why?
c.What are three factors other than costs that Trish should consider?
Unit 8-1,

Accepted Answer

a.The airfare and registration fee are s

Offshoring is another term for outsourcing.

An auto body shop is trying to decide whether or not to purchase a new piece of diagnostic equipment.Which of the following costs would not be relevant to the decision?

Which of the following is not relevant in the decision to accept a special order?

The theory of constraints seeks to maximize

Paris Manufacturing Company Inc.uses 400

Which of the following is not a criterion of relevant information?

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

Cost that has been incurred in the past is referred to as

Which of the following laws prohibits companies from offering the same item to different customers at different prices?

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?

Given the following data,what is the total relevant cost of internal production of 50

Unavoidable costs are incurred under all alternatives,thus they are always relevant.

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

Which of the following combinations results in irrelevant information?

Once viable alternatives have been identified by a decision maker,which of the following is not a step that should be followed?

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

Offshoring is another term for outsourcing.

An auto body shop is trying to decide whether or not to purchase a new piece of diagnostic equipment.Which of the following costs would not be relevant to the decision?

Which of the following is not relevant in the decision to accept a special order?

The theory of constraints seeks to maximize

Paris Manufacturing Company Inc.uses 400

Which of the following is not a criterion of relevant information?

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

Cost that has been incurred in the past is referred to as

Which of the following laws prohibits companies from offering the same item to different customers at different prices?

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?

Given the following data,what is the total relevant cost of internal production of 50

Unavoidable costs are incurred under all alternatives,thus they are always relevant.

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

Which of the following combinations results in irrelevant information?

Once viable alternatives have been identified by a decision maker,which of the following is not a step that should be followed?

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