Question 1

Qualitative factors:

Accepted Answer

A) generally are easily measured in quantitative terms 
B) are generally irrelevant for decision making 
C) may include either financial or nonfinancial information 
D) include customer satisfaction 
A) generally are easily measured in quantitative terms 
B) are generally irrelevant for decision making 
C) may include either financial or nonfinancial information 
D) include customer satisfaction

Question 2

Answer the following questions using the information below:
Braun's Brakes manufactures three different product lines, Model X, Model Y, and Model Z. Considerable market demand exists for all models. The following per unit data apply:
  
-Which model has the greatest contribution margin per unit?

Accepted Answer

A) Model X 
B) Model Y 
C) Model Z 
D) Models X and Y 
A) Model X 
B) Model Y 
C) Model Z 
D) Models X and Y

Question 3

For determining the best mix of products, the one with the LEAST amount of influence is:

Accepted Answer

A) the market price of the products 
B) corporate office costs allocated to each product 
C) the use of capacity resources 
D) contribution margins 
A) the market price of the products 
B) corporate office costs allocated to each product 
C) the use of capacity resources 
D) contribution margins

Question 4

Answer the following questions using the information below:
Schwimmer Lighting manufactures small flashlights and is considering raising the price by 50 cents a unit for the coming year. With a 50-cent price increase, demand is expected to fall by 6,000 units.
  
-When using the five-step decision process, which one of the following steps should be done last?

Accepted Answer

A) Obtain information 
B) Choose an alternative 
C) Evaluation and feedback 
D) Implementing the decision 
A) Obtain information 
B) Choose an alternative 
C) Evaluation and feedback 
D) Implementing the decision

Question 5

Bid prices and costs that are relevant for regular orders are the same costs that are relevant for one-time-only special orders.

Accepted Answer

A) True 
 B)False

Question 6

Southwestern Company needs 1,000 motors in its manufacture of automobiles. It can buy the motors from Jinx Motors for $1,250 each. Southwestern's plant can manufacture the motors for the following costs per unit:
   If Southwestern buys the motors from Jinx, 70% of the fixed manufacturing overhead applied will not be avoided.
Required:
a. Should the company make or buy the motors?
b. What additional factors should Southwestern consider in deciding whether or NOT to make or buy the motors?

Accepted Answer

@#IMG-DLM& b. Management should consider

Question 7

For short-term pricing decisions, what costs are relevant when there is available surplus capacity? When there is no available surplus capacity?

Accepted Answer

For both situations the relevant costs a

Question 8

For make-or-buy decisions, a supplier's ability to deliver the item on a timely basis is considered a(n):

Accepted Answer

A) qualitative factor 
B) relevant cost 
C) differential factor 
D) opportunity cost 
A) qualitative factor 
B) relevant cost 
C) differential factor 
D) opportunity cost

Question 9

Which of the following costs always differ among future alternatives?

Accepted Answer

A) fixed costs 
B) historical costs 
C) relevant costs 
D) variable costs 
A) fixed costs 
B) historical costs 
C) relevant costs 
D) variable costs

Question 10

If Option 1 costs $120 and Option 2 costs $90, then the differential cost is $210.

Accepted Answer

A) True 
 B)False

Question 11

An incremental product cost is generally a fixed cost.

Accepted Answer

A) True 
 B)False

Question 12

Opportunity cost(s):

Accepted Answer

A) of a resource with excess capacity is zero 
B) should be maximized by organizations 
C) are recorded as an expense in the accounting records 
D) are most important to financial accountants 
A) of a resource with excess capacity is zero 
B) should be maximized by organizations 
C) are recorded as an expense in the accounting records 
D) are most important to financial accountants

Question 13

If additional capacity is added to produce another 10,000 units, this may increase the fixed cost of rent.

Accepted Answer

A) True 
 B)False

Question 14

How does a manager go about choosing which of three products to produce and sell when each product uses a single machine with a limited capacity?

Accepted Answer

Management should attempt to maximize ou

Question 15

Quantitative factors:

Accepted Answer

A) include financial information, but not nonfinancial information 
B) can be expressed in monetary terms 
C) are always relevant when making decisions 
D) include employee morale 
A) include financial information, but not nonfinancial information 
B) can be expressed in monetary terms 
C) are always relevant when making decisions 
D) include employee morale

Question 16

A decision model involves:

Accepted Answer

A) only quantitative analyses 
B) both quantitative and qualitative analyses 
C) only qualitative analyses 
D) a manager's instinct 
A) only quantitative analyses 
B) both quantitative and qualitative analyses 
C) only qualitative analyses 
D) a manager's instinct

Question 17

If Pizza For Everyone replaces the existing delivery van with the new one, over the next 10 years operating income will:

Accepted Answer

A) decrease by $90,000 
B) increase by $75,000 
C) decrease by $75,000 
D) None of these answers is correct. 
A) decrease by $90,000 
B) increase by $75,000 
C) decrease by $75,000 
D) None of these answers is correct.

Question 18

Answer the following questions using the information below:
Pizza For Everyone is considering replacing its existing delivery van with a new one. The new van can offer considerable savings in operating costs. Information about the existing van and the new van follow:
  
-Sunk costs include:

Accepted Answer

A) the original cost of the existing van 
B) the original cost of the new van 
C) the current salvage value of the existing van 
D) the annual operating cost of the new van 
A) the original cost of the existing van 
B) the original cost of the new van 
C) the current salvage value of the existing van 
D) the annual operating cost of the new van

Question 19

Answer the following questions using the information below:
Lugozi Company manufactures three sizes of kitchen appliances: small, medium, and large. Product information is provided below.
     The maximum machine-hours available are 6,000 per week.
-Which of the three product models should be produced first if management incorporates a short-run profit maximizing strategy?

Accepted Answer

A) small chairs 
B) medium chairs 
C) large chairs 
D) either medium or large chairs 
A) small chairs 
B) medium chairs 
C) large chairs 
D) either medium or large chairs

Question 20

Relevant revenues are expected future revenues that do NOT differ among alternatives.

Accepted Answer

A) True 
 B)False

Qualitative factors:

Answer the following questions using the information below: Braun's Brakes manufactures three different product lines, Model X, Model Y, and Model Z. Considerable market demand exists for all models. The following per unit data apply: -Which model has the greatest contribution margin per unit?

For determining the best mix of products, the one with the LEAST amount of influence is:

Bid prices and costs that are relevant for regular orders are the same costs that are relevant for one-time-only special orders.

For short-term pricing decisions, what costs are relevant when there is available surplus capacity? When there is no available surplus capacity?

For make-or-buy decisions, a supplier's ability to deliver the item on a timely basis is considered a(n):

Which of the following costs always differ among future alternatives?

If Option 1 costs $120 and Option 2 costs $90, then the differential cost is $210.

An incremental product cost is generally a fixed cost.

Opportunity cost(s):

If additional capacity is added to produce another 10,000 units, this may increase the fixed cost of rent.

How does a manager go about choosing which of three products to produce and sell when each product uses a single machine with a limited capacity?

Quantitative factors:

A decision model involves:

If Pizza For Everyone replaces the existing delivery van with the new one, over the next 10 years operating income will:

Answer the following questions using the information below: Pizza For Everyone is considering replacing its existing delivery van with a new one. The new van can offer considerable savings in operating costs. Information about the existing van and the new van follow: -Sunk costs include:

Relevant revenues are expected future revenues that do NOT differ among alternatives.

The Accountants Role in the Organization

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Activity-Based Management

Master Budget and Responsibility Accounting

Flexible Budgets, Direct-Cost Variances, and Management Control

Flexible Budgets, Overhead Cost Variances, and Management Control

Inventory Costing and Capacity Analysis

Determining How Costs Behave

Pricing Decisions and Cost Management

Strategy, Balanced Scorecard, and Strategic Profitability Analysis

Cost Allocation, Customer-Profitability Analysis, and Sales-Variance Analysis

Allocation of Support-Department Costs, Common Costs, and Revenues

Cost Allocation: Joint Products and Byproducts

Process Costing

Spoilage, Rework, and Scrap

Balanced Scorecard: Quality, Time, and the Theory of Constraints

Inventory Management, Just-In-Time, and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, Transfer Pricing, and Multinational Considerations

Performance Measurement, Compensation, and Multinational Considerations

Filters

Exam 11: Decision Making and Relevant Information

Qualitative factors:

Answer the following questions using the information below: Braun's Brakes manufactures three different product lines, Model X, Model Y, and Model Z. Considerable market demand exists for all models. The following per unit data apply: -Which model has the greatest contribution margin per unit?

For determining the best mix of products, the one with the LEAST amount of influence is:

Bid prices and costs that are relevant for regular orders are the same costs that are relevant for one-time-only special orders.

For short-term pricing decisions, what costs are relevant when there is available surplus capacity? When there is no available surplus capacity?

For make-or-buy decisions, a supplier's ability to deliver the item on a timely basis is considered a(n):

Which of the following costs always differ among future alternatives?

If Option 1 costs $120 and Option 2 costs $90, then the differential cost is $210.

An incremental product cost is generally a fixed cost.

Opportunity cost(s):

If additional capacity is added to produce another 10,000 units, this may increase the fixed cost of rent.

How does a manager go about choosing which of three products to produce and sell when each product uses a single machine with a limited capacity?

Quantitative factors:

A decision model involves:

If Pizza For Everyone replaces the existing delivery van with the new one, over the next 10 years operating income will:

Answer the following questions using the information below: Pizza For Everyone is considering replacing its existing delivery van with a new one. The new van can offer considerable savings in operating costs. Information about the existing van and the new van follow: -Sunk costs include:

Relevant revenues are expected future revenues that do NOT differ among alternatives.

The Accountants Role in the Organization

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Activity-Based Management

Master Budget and Responsibility Accounting

Flexible Budgets, Direct-Cost Variances, and Management Control

Flexible Budgets, Overhead Cost Variances, and Management Control

Inventory Costing and Capacity Analysis

Determining How Costs Behave

Pricing Decisions and Cost Management

Strategy, Balanced Scorecard, and Strategic Profitability Analysis

Cost Allocation, Customer-Profitability Analysis, and Sales-Variance Analysis

Allocation of Support-Department Costs, Common Costs, and Revenues

Cost Allocation: Joint Products and Byproducts

Process Costing

Spoilage, Rework, and Scrap

Balanced Scorecard: Quality, Time, and the Theory of Constraints

Inventory Management, Just-In-Time, and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, Transfer Pricing, and Multinational Considerations

Performance Measurement, Compensation, and Multinational Considerations

Filters