Question 1

Gerberal Company charges cost plus 40%.What is the price of an item with cost equal to $100?

Accepted Answer

A)  $76 
B)  $85 
C)  $140 
D)  $125 
E)  $190 
A)  $76 
B)  $85 
C)  $140 
D)  $125 
E)  $190

Question 2

____________________ consists of choosing among alternatives with an immediate or limited end in view.

Accepted Answer

Short-run

Question 3

A cost that cannot be affected by any future action is called a(n) _______________.

Accepted Answer

The answer of A cost that cannot be affected by...

Question 4

Shear-it, Inc., produces paper shredders.Shear-it is considering a new shredder design for home offices.The marketing vice president believes that a basic unit in a variety of attractive colors could be sold for $70.Shear-it requires that all new products yield 30% profit.What is the target cost of the new shredder?

Accepted Answer

A)  $21 
B)  $91 
C)  $49 
D)  $100 
E)  $63.70 
A)  $21 
B)  $91 
C)  $49 
D)  $100 
E)  $63.70

Question 5

In making a short-run decision, all alternatives need to be considered.

Accepted Answer

A) True 
 B)False

Question 6

A situation in which management tells divisions that they must reduce costs by 10% is called target costing.

Accepted Answer

A) True 
 B)False

Question 7

Typically in a special-order decision, a customer wants to pay more than the usual price.

Accepted Answer

A) True 
 B)False

Question 8

Amaryliz Products had the following unit costs:

A one-time customer has offered to buy 4,000 units at a special price of $60 per unit.Because of capacity constraints, 1,000 units will need to be produced during overtime.Overtime premium is $15 per unit.How much additional profit or loss will be generated by accepting the special order?

Accepted Answer

A)  $60,000 profit 
B)  $52,000 loss 
C)  $27,000 loss 
D)  $37,000 profit 
A)  $60,000 profit 
B)  $52,000 loss 
C)  $27,000 loss 
D)  $37,000 profit

Question 9

Daisy Bath Products, Inc.(DBP) makes a variety of ceramic sinks and tubs.DBP has just developed a line of sinks and tubs made from a mixture of glass and ceramic.The sinks sell for $200 each and have variable costs of $70.The tubs sell for $700 and have variable costs of $320.The glass and ceramic sinks and tubs require the use of specialized molding equipment.The specialized molding equipment has 5,000 hours of capacity per year.A sink uses an average of 5 hours of specialized molding equipment time; a tub uses an average of 6 hours of specialized molding equipment time. 
What is the contribution margin per hour of specialized molding equipment time for sinks?

Accepted Answer

A)  $26 
B)  $19 
C)  $30 
D)  $45 
E)  $51 
A)  $26 
B)  $19 
C)  $30 
D)  $45 
E)  $51

Question 10

The following information pertains to Chrysnta Company's three products:  
   
  Assume that product C is discontinued and an extra space is rented for $800 per month.All other information remains the same as the original data.Annual profits will:

Accepted Answer

A)  increase by $9,000. 
B)  decrease by $2,000. 
C)  increase by $9,600. 
D)  decrease by $600. 
A)  increase by $9,000. 
B)  decrease by $2,000. 
C)  increase by $9,600. 
D)  decrease by $600.

Question 11

A ____________ is a subunit of a company of sufficient importance to warrant the production of performance reports.

Accepted Answer

The answer of A ____________ is a subunit of a...

Question 12

Abbott Company is considering purchasing a new machine to replace a machine purchased one year ago that is not achieving the expected results.The following information is available:
 
 Which of these items is irrelevant?

Accepted Answer

A)  Expected maintenance costs of new machine 
B)  Purchase cost of existing machine 
C)  Expected maintenance costs of existing machine 
D)  Expected resale value of existing machine 
A)  Expected maintenance costs of new machine 
B)  Purchase cost of existing machine 
C)  Expected maintenance costs of existing machine 
D)  Expected resale value of existing machine

Question 13

Demand is one side of the pricing equation; supply is the other side.

Accepted Answer

A) True 
 B)False

Question 14

Matching
​
Match each statement with the correct item below.
-​Differential cost

Accepted Answer

A) ​the difference in total cost between the alternatives in a decision 
B) ​determine whether or not a segment should be kept or dropped 
C) ​limited resources and limited demand for each product 
D) ​a specific set of procedures that produces a decision 
E) ​the point at which products that have common processes and costs of production become distinguishable
F)​method of determining the cost of a product based on the price that customers are willing to pay
G)​decisions involving a choice between internal and external production
H)​products that have common processes and costs of production up to a point
I)​past costs that cannot be affected by future decisions
J)​a percentage applied to the base cost to cover other costs plus profit
K)​determine whether a specially priced order should be accepted or rejected
L)​determine whether it is more profitable to process a joint product further 
A) ​the difference in total cost between the alternatives in a decision 
B) ​determine whether or not a segment should be kept or dropped 
C) ​limited resources and limited demand for each product 
D) ​a specific set of procedures that produces a decision 
E) ​the point at which products that have common processes and costs of production become distinguishable
F)​method of determining the cost of a product based on the price that customers are willing to pay
G)​decisions involving a choice between internal and external production
H)​products that have common processes and costs of production up to a point
I)​past costs that cannot be affected by future decisions
J)​a percentage applied to the base cost to cover other costs plus profit
K)​determine whether a specially priced order should be accepted or rejected
L)​determine whether it is more profitable to process a joint product further

Question 15

Irrelevant costs are costs that are the same for more than one alternative.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is a key point considered in a special order decision?

Accepted Answer

A)  Additional irrelevant costs associated with the special order 
B)  Avoidable sunk costs associated with the special order 
C)  The estimated benefits associated with the special order 
D)  The preparation of segmented income statements of the special order 
A)  Additional irrelevant costs associated with the special order 
B)  Avoidable sunk costs associated with the special order 
C)  The estimated benefits associated with the special order 
D)  The preparation of segmented income statements of the special order

Question 17

In determining the target price of a good, the company must first determine the target cost and the desired profit.

Accepted Answer

A) True 
 B)False

Question 18

At split-off, the joint costs of production for joint products are not relevant to the sell-or-process-further decision.

Accepted Answer

A) True 
 B)False

Question 19

Gladiol sets prices at cost plus 65%.The cost of an aquarium start-up kit is $100.What price does Gladiol Supplies charge for the aquarium start-up kit?

Accepted Answer

A)  $680 
B)  $554 
C)  $165 
D)  $780 
E)  $220 
A)  $680 
B)  $554 
C)  $165 
D)  $780 
E)  $220

Question 20

Connolly Company produces two types of lamps, classic and fancy, with unit contribution margins of $13 and $21, respectively.Each lamp must spend time on a special machine.The firm owns four machines that together provide 18,000 hours of machine time per year.The classic lamp requires 0.20 hours of machine time, the fancy lamp requires 0.50 hours of machine time. ?
-
What is the contribution margin per hour of machine time for a classic lamp?

Accepted Answer

A)  $26 
B)  $104 
C)  $16 
D)  $65 
E)  $13 
A)  $26 
B)  $104 
C)  $16 
D)  $65 
E)  $13

Gerberal Company charges cost plus 40%.What is the price of an item with cost equal to $100?

____________________ consists of choosing among alternatives with an immediate or limited end in view.

A cost that cannot be affected by any future action is called a(n) _______________.

In making a short-run decision, all alternatives need to be considered.

A situation in which management tells divisions that they must reduce costs by 10% is called target costing.

Typically in a special-order decision, a customer wants to pay more than the usual price.

The following information pertains to Chrysnta Company's three products: Assume that product C is discontinued and an extra space is rented for $800 per month.All other information remains the same as the original data.Annual profits will:

A ____________ is a subunit of a company of sufficient importance to warrant the production of performance reports.

Abbott Company is considering purchasing a new machine to replace a machine purchased one year ago that is not achieving the expected results.The following information is available: Which of these items is irrelevant?

Demand is one side of the pricing equation; supply is the other side.

Matching Match each statement with the correct item below. -Differential cost

Irrelevant costs are costs that are the same for more than one alternative.

Which of the following is a key point considered in a special order decision?

In determining the target price of a good, the company must first determine the target cost and the desired profit.

At split-off, the joint costs of production for joint products are not relevant to the sell-or-process-further decision.

Gladiol sets prices at cost plus 65%.The cost of an aquarium start-up kit is $100.What price does Gladiol Supplies charge for the aquarium start-up kit?

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behavior, Cost Forecasting, and Segmented Income Statements

Job-Order Costing and Normal Cost Overhead Application

Activity-Based Costing and Management

Process Costing

Cost-Volume-Profit Analysis

Profit Planning and Flexible Budgets

Standard Costing and Variance Analysis

Performance Evaluation and Decentralization

Capital Investment Decisions

Emerging Topics in Managerial Accounting: Sustainability, Quality Cost, Lean Accounting, International Issues, Enterprise Risk Management, the Managerial Accountant in Forensicfraud Accounting

Statement of Cash Flows

Financial Statement Analysis

Filters

Exam 8: Tactical Decision-Making and Relevant Costing

Gerberal Company charges cost plus 40%.What is the price of an item with cost equal to $100?

____________________ consists of choosing among alternatives with an immediate or limited end in view.

A cost that cannot be affected by any future action is called a(n) _______________.

In making a short-run decision, all alternatives need to be considered.

A situation in which management tells divisions that they must reduce costs by 10% is called target costing.

Typically in a special-order decision, a customer wants to pay more than the usual price.

The following information pertains to Chrysnta Company's three products: Assume that product C is discontinued and an extra space is rented for $800 per month.All other information remains the same as the original data.Annual profits will:

A ____________ is a subunit of a company of sufficient importance to warrant the production of performance reports.

Abbott Company is considering purchasing a new machine to replace a machine purchased one year ago that is not achieving the expected results.The following information is available: Which of these items is irrelevant?

Demand is one side of the pricing equation; supply is the other side.

Matching ​ Match each statement with the correct item below. -​Differential cost

Irrelevant costs are costs that are the same for more than one alternative.

Which of the following is a key point considered in a special order decision?

In determining the target price of a good, the company must first determine the target cost and the desired profit.

At split-off, the joint costs of production for joint products are not relevant to the sell-or-process-further decision.

Gladiol sets prices at cost plus 65%.The cost of an aquarium start-up kit is $100.What price does Gladiol Supplies charge for the aquarium start-up kit?

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behavior, Cost Forecasting, and Segmented Income Statements

Job-Order Costing and Normal Cost Overhead Application

Activity-Based Costing and Management

Process Costing

Cost-Volume-Profit Analysis

Profit Planning and Flexible Budgets

Standard Costing and Variance Analysis

Performance Evaluation and Decentralization

Capital Investment Decisions

Emerging Topics in Managerial Accounting: Sustainability, Quality Cost, Lean Accounting, International Issues, Enterprise Risk Management, the Managerial Accountant in Forensicfraud Accounting

Statement of Cash Flows

Financial Statement Analysis

Filters

Matching Match each statement with the correct item below. -Differential cost