Exam 8: Using Accounting Information to Make Managerial Decisions
Exam 1: Accounting As a Tool for Management162 Questions
Exam 2: Cost Behavior and Cost Estimation169 Questions
Exam 3: Cost-Volume-Profit Analysis and Pricing Decisions166 Questions
Exam 4: Product Costs and Job Order Costing189 Questions
Exam 5: Planning and Forecasting201 Questions
Exam 6: Performance Evaluation: Variance Analysis198 Questions
Exam 7: Activity-Based Costing and Activity Based Management178 Questions
Exam 8: Using Accounting Information to Make Managerial Decisions188 Questions
Exam 9: Capital Budgeting171 Questions
Exam 10: Decentralizing and Performance Evaluation194 Questions
Exam 11: Performance Evaluation Revisited: a Balanced Approach171 Questions
Exam 12: Financial Statement Analysis169 Questions
Exam 13: Statement of Cash Flows163 Questions
Exam 14: Topic Focus: Process Costing70 Questions
Exam 15: Topic Focus Variable and Absorption Costing51 Questions
Exam 16: Topic Focus Standard Costing Systems44 Questions
Exam 17: Topic Focus Customer Profitability45 Questions
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Which of the following is not a qualitative issue that must be considered before reaching a decision to outsource?
(Multiple Choice)
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In response to a growing awareness of various allergies,Barb's Better Breads BBB developed baking mixes which contain a unique blend of gluten-free flours and starches,including almond meal,organic flax seeds and arrowroot.The breads are also baked in a preheated,heavy,lidded pan which creates a better crust and texture in gluten-free breads.BBB has been approached by a large restaurant chain to supply the bread used in restaurants throughout the region.Due to demand,almond meal is often in limited supply.Pertinent information for 3 types of bread follows:
Required
a.Assuming no raw material constraints and unlimited demand for all 3 types of bread,what type of bread would maximize the company's contribution margin? Why?
b.Assume that based on typical customer demand,BBB will sell 12,000 loaves of cinnamon raisin,8,000 loaves of ciabatta,and 10,000 loaves of crusty french.What will the company's contribution margin be?
c.BBB's almond meal supplier has announced a shortage of almond meal.As a result,BBB will only be able to purchase 20,000 pounds of almond meal.How many loaves of each type of bread should the company bake? What will the company's contribution margin be?

(Essay)
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The Theory of Constraints seeks to maximize throughput contribution,which equals sales revenue less direct materials cost.
(True/False)
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The costs that should be included in an outsourcing decision are the
(Multiple Choice)
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The formula for calculating the contribution margin per constrained resource is Contribution Margin Per
(True/False)
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Costs such as rent and the production manager's salary are non-differential,but are relevant.
(True/False)
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Newport Manufacturing makes and sells backyard fire pits.Each fire pit regularly sells for $269.The following cost data per
a.What is the minimum selling price Newport should negotiate for the special order?
b.What are three factors other than relevant costs that Newport should consider concerning this special order?
Unit 8-2,
(Essay)
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A common mistake managers make in deciding to close a division is
(Multiple Choice)
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Instead of maximizing income,as measured by traditional accounting methods,the theory of constraints seeks to maximize gg.contribution income.
(Multiple Choice)
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Moving the production of goods from within the organization to a provider outside the organization is referred to as
(Multiple Choice)
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Mallory Manufacturing produces thermal tents and sleeping bags.The company's products are in high demand due to the quality and durability of the products.Mallory estimates it could sell 600 tents per month and 600 sleeping bags per month.Following is information for each of these products:
Mallory has 800 machine hours available each month.If Mallory allocates its production capacity between the tents and sleeping bags so that it maximizes the company's contribution margin,what will the contribution margin be?

(Multiple Choice)
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Sanderson's Woodworking Company is considering the addition of a new line of quilt frames to its current product lines.If the new quilt frames are added to Sanderson's production,contribution margin of the other products is expected to drop by $2,000.Sanderson has summarized the projected revenue and cost for the new line of frames.
Required:
a.If Sanderson adds the new quilt frame to its line of products,what will be the increase in operating income?
b.What are three issues that Sanderson should consider before adding the new line?
Unit 8-1,

(Essay)
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Place and "X" in the column that corresponds to the cost classification for each of the following scenarios.Some items may fit in more than one column.


(Essay)
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Pueblo Production Company manufactures 50,000 high-definition televisions each year.Pueblo is considering purchasing the glass screens from an outside source rather than producing them internally.The following data relate to the glass screens:
What is the total relevant cost to internally produce 50,000 glass screens?

(Multiple Choice)
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When a company outsources a product,it is easier to control product quality than if the product is produced internally.
(True/False)
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Throughput contribution equals oo.sales revenue less fixed costs.
(Multiple Choice)
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ABC Corporation makes mattresses in three sizes: twin,queen and king.Twin mattresses have shown a loss for several years,similar to the operating loss shown below:
None of the fixed cost is avoidable.What will total operating income for the corporation be if twin mattresses are discontinued?

(Multiple Choice)
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Because depreciation is a fixed cost that is not avoidable,it is irrelevant in making an outsourcing decision.
(True/False)
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In determining whether or not to eliminate a segment,differential costs are relevant to the decision.
(True/False)
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According to the Theory of Constraints,all production should be subordinated to the bottleneck operation.
(True/False)
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