Question 1

What actions might be taken with an unprofitable customer?

Accepted Answer

An unprofitable customer might be droppe

Question 2

A customer cost hierarchy may include distribution-channel costs.

Accepted Answer

A) True 
 B)False

Question 3

A customer cost hierarchy categorizes costs related to customers into different cost pools on the basis of different ________.

Accepted Answer

A)  contribution-margin ratios of products 
B)  distribution-channel costs 
C)  levels of cause-and-effect relationships 
D)  division-sustaining costs 
A)  contribution-margin ratios of products 
B)  distribution-channel costs 
C)  levels of cause-and-effect relationships 
D)  division-sustaining costs

Question 4

The Octova Corporation manufactures two types of vacuum cleaners: the ZENITH for commercial building use and the House-Helper for residences.Budgeted and actual operating data for the year 20X5 are as follows:
 $$\begin{array}{l}
\begin{array} { l r r r } 
\text { Static Budget } & \text { Zenith } & \text { House-Helper } & \text { Total } \
\text { Number sold } & 20,000 & 80,000 & 100,000 \
\text { Contribution margin } & \$ 4,600,000 & \$ 15,200,000 & \$ 19,800,000
\end{array}\\
\begin{array} { l r r r } 
\text { Actual Results } & \text { Zenith } & \text { House-Helper } & \text { Total } \
\text { Number sold } & 21,500 & 64,500 & 86,000 \
\text { Contribution margin } & \$ 6,665,000 & \$ 14,190,000 & \$ 20,855,000
\end{array}
\end{array}$$ Required:
Compute the sales-mix variance and the sales-quantity variance by type of vacuum cleaner,and in total.(in terms of the contribution margin)

Accepted Answer

Budgeted sales-mix percentage:
Zenith =

Question 5

The chart used to express customer profitability is called the whale curve because it is backward-bending at the point where customers start to become unprofitable and thus resembles a humpback.

Accepted Answer

A) True 
 B)False

Question 6

Answer the following questions using the information below:
The Corata Appliance Manufacturing Corporation manufactures two vacuum cleaners, the Standard and the Super. The following information was gathered about the two products:
 $\begin{array}{lrr}&\text { Standard }&\text { Super }\
\text { Bud geted sales in units } & 2,400 & 600 \
\text { Bud geted selling price } & \$ 600 & \$ 1,700 \
\text { Bud geted contribution margin per unit } & \$ 400 & \$ 1,050 \
\text { Actual sales in units } & 2,800 & 1,200 \
\text { Actual selling price } & \$ 650 & \$ 1,680
\end{array}$
-What is the budgeted sales-mix percentage for the Standard and the Super vacuum cleaners,respectively?

Accepted Answer

A)  0.80 and 0.20 
B)  0.70 and 0.30 
C)  0.20 and 0.80 
D)  0.30 and 0.70 
A)  0.80 and 0.20 
B)  0.70 and 0.30 
C)  0.20 and 0.80 
D)  0.30 and 0.70

Question 7

ABC systems use the concept of a ________ to identify the cost drivers that best demonstrate the cause-and-effect relationship between each activity and the costs in the related cost pool.

Accepted Answer

A)  cost hierarchy 
B)  customer -cost analysis 
C)  cost allocation 
D)  variance analysis 
A)  cost hierarchy 
B)  customer -cost analysis 
C)  cost allocation 
D)  variance analysis

Question 8

Customer revenues and ________ are the determinants of customer profitability.

Accepted Answer

A)  customer profile 
B)  customer costs 
C)  customer location 
D)  customer industry 
A)  customer profile 
B)  customer costs 
C)  customer location 
D)  customer industry

Question 9

Flexible budget contribution margin is equal to ________.

Accepted Answer

A)  actual contribution margin per unit times actual units sold of each product 
B)  actual contribution margin per unit times budgeted units sold of each product 
C)  budgeted contribution margin per unit times budgeted units sold of each product 
D)  budgeted contribution margin per unit times actual units sold of each product 
A)  actual contribution margin per unit times actual units sold of each product 
B)  actual contribution margin per unit times budgeted units sold of each product 
C)  budgeted contribution margin per unit times budgeted units sold of each product 
D)  budgeted contribution margin per unit times actual units sold of each product

Question 10

Gevorg's Electronics manufactures TVs and DVDRs.During April,the following activities occurred:
 $$\begin{array} { l r r } 
& \text { TVs } & \text { DVDRs } \
\hline \text { Budgeted units sold } & 19,404 & 72,996 \
\text { Budgeted contribution margin per unit } & \$ 40 & \$ 75 \
\text { Actual units sold } & 22,000 & 80,000 \
\text { Actual contribution margin per unit } & \$ 45 & \$ 76
\end{array}$$ Required:
Compute the following variances in terms of the contribution margin.
a.Determine the total sales-mix variance.
b.Determine the total sales-quantity variance.
c.Determine the total sales-volume variance.

Accepted Answer

The answer of Gevorg's Electronics manufactures TVs and DVDRs.During April,the...

Question 11

Corporate brand advertising and general administration costs are examples of corporate costs.

Accepted Answer

A) True 
 B)False

Question 12

The sales-quantity variance will be favorable when ________.

Accepted Answer

A)  sales-volume variance and flexible-budget variance are favorable 
B)  actual units of all products sold exceed budgeted units of all products sold 
C)  the actual sales mix shifts towards the more profitable units 
D)  static-budget variance and flexible-budget variance are favorable 
A)  sales-volume variance and flexible-budget variance are favorable 
B)  actual units of all products sold exceed budgeted units of all products sold 
C)  the actual sales mix shifts towards the more profitable units 
D)  static-budget variance and flexible-budget variance are favorable

Question 13

Companies that want to calculate the full cost of products must allocate all corporate costs to divisions.

Accepted Answer

A) True 
 B)False

Question 14

Corporate-sustaining costs ________.

Accepted Answer

A)  are common to all individual customers 
B)  have a clear cause-and-effect relationship with several cost-allocation bases 
C)  should be allocated for decisions regarding reducing customer costs 
D)  evaluates the effectiveness of sales personnel 
A)  are common to all individual customers 
B)  have a clear cause-and-effect relationship with several cost-allocation bases 
C)  should be allocated for decisions regarding reducing customer costs 
D)  evaluates the effectiveness of sales personnel

Question 15

The costs of all six value-chain functions should be included when determining ________.

Accepted Answer

A)  the prime cost of a product 
B)  the selling price of a product 
C)  the contribution margin per unit 
D)  the cost of capital 
A)  the prime cost of a product 
B)  the selling price of a product 
C)  the contribution margin per unit 
D)  the cost of capital

Question 16

Tracking price discounts by customer and by salesperson helps improve customer profitability.

Accepted Answer

A) True 
 B)False

Question 17

The reporting and assessment of revenues earned from customers and the costs incurred to earn those revenues is ________.

Accepted Answer

A)  creditor-age analysis 
B)  customer-profitability analysis 
C)  debtor-cost analysis 
D)  customer-turnover analysis 
A)  creditor-age analysis 
B)  customer-profitability analysis 
C)  debtor-cost analysis 
D)  customer-turnover analysis

Question 18

Advances in information-gathering technology make it more likely that multiple cost-pool systems will pass the cost-benefit test.

Accepted Answer

A) True 
 B)False

Question 19

Costs incurred to process orders would most likely be classified as a ________.

Accepted Answer

A)  customer output unit-level cost 
B)  customer batch-level cost 
C)  customer-sustaining cost 
D)  corporate-sustaining cost 
A)  customer output unit-level cost 
B)  customer batch-level cost 
C)  customer-sustaining cost 
D)  corporate-sustaining cost

Question 20

Why do managers prepare cost-hierarchy-based operating incomes statements?

Accepted Answer

Cost-hierarchy-based operating income st

What actions might be taken with an unprofitable customer?

A customer cost hierarchy may include distribution-channel costs.

A customer cost hierarchy categorizes costs related to customers into different cost pools on the basis of different ________.

The chart used to express customer profitability is called the whale curve because it is backward-bending at the point where customers start to become unprofitable and thus resembles a humpback.

ABC systems use the concept of a ________ to identify the cost drivers that best demonstrate the cause-and-effect relationship between each activity and the costs in the related cost pool.

Customer revenues and ________ are the determinants of customer profitability.

Flexible budget contribution margin is equal to ________.

Corporate brand advertising and general administration costs are examples of corporate costs.

The sales-quantity variance will be favorable when ________.

Companies that want to calculate the full cost of products must allocate all corporate costs to divisions.

Corporate-sustaining costs ________.

The costs of all six value-chain functions should be included when determining ________.

Tracking price discounts by customer and by salesperson helps improve customer profitability.

The reporting and assessment of revenues earned from customers and the costs incurred to earn those revenues is ________.

Advances in information-gathering technology make it more likely that multiple cost-pool systems will pass the cost-benefit test.

Costs incurred to process orders would most likely be classified as a ________.

Why do managers prepare cost-hierarchy-based operating incomes statements?

The Manager and Management Accounting

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

Decision Making and Relevant Information

Strategy, balanced Scorecard, and Strategic Profitability Analysis

Pricing Decisions and Cost Management

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

Cost Allocation: Joint Products and Byproducts

Process Costing

Spoilage, rework, and Scrap

Balanced Scorecard: Quality and Time

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 14: Cost Allocation, customer-Profitability Analysis, and Sales-Variance Analysis

What actions might be taken with an unprofitable customer?

A customer cost hierarchy may include distribution-channel costs.

A customer cost hierarchy categorizes costs related to customers into different cost pools on the basis of different ________.

The chart used to express customer profitability is called the whale curve because it is backward-bending at the point where customers start to become unprofitable and thus resembles a humpback.

ABC systems use the concept of a ________ to identify the cost drivers that best demonstrate the cause-and-effect relationship between each activity and the costs in the related cost pool.

Customer revenues and ________ are the determinants of customer profitability.

Flexible budget contribution margin is equal to ________.

Corporate brand advertising and general administration costs are examples of corporate costs.

The sales-quantity variance will be favorable when ________.

Companies that want to calculate the full cost of products must allocate all corporate costs to divisions.

Corporate-sustaining costs ________.

The costs of all six value-chain functions should be included when determining ________.

Tracking price discounts by customer and by salesperson helps improve customer profitability.

The reporting and assessment of revenues earned from customers and the costs incurred to earn those revenues is ________.

Advances in information-gathering technology make it more likely that multiple cost-pool systems will pass the cost-benefit test.

Costs incurred to process orders would most likely be classified as a ________.

Why do managers prepare cost-hierarchy-based operating incomes statements?

The Manager and Management Accounting

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

Decision Making and Relevant Information

Strategy, balanced Scorecard, and Strategic Profitability Analysis

Pricing Decisions and Cost Management

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

Cost Allocation: Joint Products and Byproducts

Process Costing

Spoilage, rework, and Scrap

Balanced Scorecard: Quality and Time

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