Question 1

________________ refers to the relative amount of each product manufactured by a company.

Accepted Answer

The answer of ________________ refers to the relative amount of...

Question 2

Assume the following information for a product line:  
 
-  What is the contribution margin of the product line?

Accepted Answer

A)  $400,000 
B)  $525,000 
C)  $445,000 
D)  $515,000 
A)  $400,000 
B)  $525,000 
C)  $445,000 
D)  $515,000

Question 3

Matching
​
Match each statement with the correct item below.
-​Decision model

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 4

Glascro Manufacturing Company had the following unit costs: 
  A one-time customer has offered to buy 3,000 units at a special price of $60 per unit.Assuming that sufficient unused production capacity exists to produce the order and no regular customers will be affected by the order, how much additional profit or loss will be generated by accepting the special order?

Accepted Answer

A)  $45,000 profit 
B)  $22,000 profit 
C)  $36,000 loss 
D)  $57,000 loss 
A)  $45,000 profit 
B)  $22,000 profit 
C)  $36,000 loss 
D)  $57,000 loss

Question 5

A method of determining the cost of a product or service based on the price that customers are willing to pay is called ________________.

Accepted Answer

The answer of A method of determining the cost of...

Question 6

Future costs that differ across alternatives are

Accepted Answer

A)  opportunity costs. 
B)  sunk costs. 
C)  relevant costs. 
D)  variable costs. 
E)  product costs. 
A)  opportunity costs. 
B)  sunk costs. 
C)  relevant costs. 
D)  variable costs. 
E)  product costs.

Question 7

In keep-or-drop decisions, both the segment's contribution margin and its segment margin are useful in evaluating the performance of the segment.

Accepted Answer

A) True 
 B)False

Question 8

_____________________ are simply those factors that are hard to put a number on, including things like political pressure and product safety.

Accepted Answer

The answer of _____________________ are simply those factors that are...

Question 9

Elegance Bath Products, Inc.(EBP) makes a variety of ceramic sinks and tubs.EBP has just developed a line of sinks and tubs made from a mixture of glass and ceramic.The sinks sell for $150 each and have variable costs of $80.The tubs sell for $600 and have variable costs of $450.The glass and ceramic sinks and tubs require the use of specialized molding equipment.The specialized molding equipment has 4,050 hours of capacity per year.A sink uses an average of 2 hours of specialized molding equipment time; a tub uses an average of 5 hours of specialized molding equipment time  
-  Assuming that specialized molding equipment time is the only constrained resource, and that EBP can sell as many tubs and sinks as it can produce, how many sinks should be sold?

Accepted Answer

A)  2,050 
B)  2,025 
C)  0 
D)  4,050 
E)  810 
A)  2,050 
B)  2,025 
C)  0 
D)  4,050 
E)  810

Question 10

Segmented reports are helpful for managers to make _______________ decisions.

Accepted Answer

The answer of Segmented reports are helpful for managers to...

Question 11

A major advantage of markup pricing is that standard markups are easy to apply.

Accepted Answer

A) True 
 B)False

Question 12

Merry Toy Company makes toy airplanes.One plane is an excellent replica of a 737; it sells for $8.Joyous Airlines wants to purchase 15,000 planes at $4 each to give to children flying unaccompanied.Costs per plane are as follows:  
 
  No variable marketing costs would be incurred.The company is operating significantly below the maximum productive capacity.No fixed costs are avoidable.However, Joyous Airlines wants its own logo and colors on the planes.The cost of the decals is $0.05 per plane and a special machine costing $2,000 would be required to affix the decals.After the order is complete, the machine would be scrapped.Should the special order be accepted

Accepted Answer

A)   Yes, income will increase by $600. 
B)   No, income will decrease by $200. 
C)   No, income will decrease by $2,500. 
D)  Yes, income will increase by $250. 
E)   It doesn't matter; there will be no change in income. 
A)   Yes, income will increase by $600. 
B)   No, income will decrease by $200. 
C)   No, income will decrease by $2,500. 
D)  Yes, income will increase by $250. 
E)   It doesn't matter; there will be no change in income.

Question 13

Mekong Company was making a product for $45 and selling it for $90.A competitor began selling the same product for $75.If Mekong is to meet the competition's price, and maintain the same amount of profit per unit, what is its target cost?

Accepted Answer

A)  $30 
B)  $45 
C)  $21 
D)  $33 
E)  $52 
A)  $30 
B)  $45 
C)  $21 
D)  $33 
E)  $52

Question 14

Expenses that persist even if one of the segments to which they relate is eliminated are known as ________________.

Accepted Answer

common fix

Question 15

Wilson Custom Cabinetry makes cabinets to order and prices the completed jobs at product cost plus 40%.Recently, Wilson finished a job and billed the customer $560.If direct materials for the job cost $130, and direct labor cost $180, what was the applied overhead for the job?

Accepted Answer

A)  $250 
B)  $179 
C)  $350 
D)  $400 
E)  $90 
A)  $250 
B)  $179 
C)  $350 
D)  $400 
E)  $90

Question 16

A sunk cost is always relevant.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following works backward from the desired price to find the allowable cost?

Accepted Answer

A)  Step costing 
B)  Differential costing 
C)  Target costing 
D)  Mixed costing 
E)  Overall costing 
A)  Step costing 
B)  Differential costing 
C)  Target costing 
D)  Mixed costing 
E)  Overall costing

Question 18

Craydye Corporation manufactures a part for its production cycle.The costs per unit for 8,000 units of this part are as follows: ​
​
  Zinkyl Company has offered to sell Craydye Corporation 8,000 units of the part for $120 per unit.If Craydye Corporation accepts Zinkyl Company's offer, total fixed overhead will be reduced by $40,000.What alternative is more desirable and by what amount is it more desirable?
Alternative Amount

Accepted Answer

A)  Make; $220,000 
B)  Make; $72,000 
C)  Buy; $188,000 
D)  Buy; $170,000 
A)  Make; $220,000 
B)  Make; $72,000 
C)  Buy; $188,000 
D)  Buy; $170,000

Question 19

Memuru Company has the following information pertaining to its two divisions for last year: 
  Common expenses are $30,000 for the year.
 
What is the segment margin for Division Y?

Accepted Answer

A)  $560,000 
B)  $450,000 
C)  $320,000 
D)  $260,000 
A)  $560,000 
B)  $450,000 
C)  $320,000 
D)  $260,000

Question 20

Qualitative factors that should be considered when evaluating a make-or-buy decision are

Accepted Answer

A)  the quality of the outside supplier's product. 
B)  whether the outside supplier can provide the needed quantities. 
C)  whether the outside supplier can provide the product when it is needed. 
D)  All of these. 
A)  the quality of the outside supplier's product. 
B)  whether the outside supplier can provide the needed quantities. 
C)  whether the outside supplier can provide the product when it is needed. 
D)  All of these.

________________ refers to the relative amount of each product manufactured by a company.

Assume the following information for a product line: - What is the contribution margin of the product line?

Matching Match each statement with the correct item below. -Decision model

A method of determining the cost of a product or service based on the price that customers are willing to pay is called ________________.

Future costs that differ across alternatives are

In keep-or-drop decisions, both the segment's contribution margin and its segment margin are useful in evaluating the performance of the segment.

_____________________ are simply those factors that are hard to put a number on, including things like political pressure and product safety.

Segmented reports are helpful for managers to make _______________ decisions.

A major advantage of markup pricing is that standard markups are easy to apply.

Mekong Company was making a product for $45 and selling it for $90.A competitor began selling the same product for $75.If Mekong is to meet the competition's price, and maintain the same amount of profit per unit, what is its target cost?

Expenses that persist even if one of the segments to which they relate is eliminated are known as ________________.

Wilson Custom Cabinetry makes cabinets to order and prices the completed jobs at product cost plus 40%.Recently, Wilson finished a job and billed the customer $560.If direct materials for the job cost $130, and direct labor cost $180, what was the applied overhead for the job?

A sunk cost is always relevant.

Which of the following works backward from the desired price to find the allowable cost?

Memuru Company has the following information pertaining to its two divisions for last year: Common expenses are $30,000 for the year. What is the segment margin for Division Y?

Qualitative factors that should be considered when evaluating a make-or-buy decision are

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

________________ refers to the relative amount of each product manufactured by a company.

Assume the following information for a product line: - What is the contribution margin of the product line?

Matching ​ Match each statement with the correct item below. -​Decision model

A method of determining the cost of a product or service based on the price that customers are willing to pay is called ________________.

Future costs that differ across alternatives are

In keep-or-drop decisions, both the segment's contribution margin and its segment margin are useful in evaluating the performance of the segment.

_____________________ are simply those factors that are hard to put a number on, including things like political pressure and product safety.

Segmented reports are helpful for managers to make _______________ decisions.

A major advantage of markup pricing is that standard markups are easy to apply.

Mekong Company was making a product for $45 and selling it for $90.A competitor began selling the same product for $75.If Mekong is to meet the competition's price, and maintain the same amount of profit per unit, what is its target cost?

Expenses that persist even if one of the segments to which they relate is eliminated are known as ________________.

Wilson Custom Cabinetry makes cabinets to order and prices the completed jobs at product cost plus 40%.Recently, Wilson finished a job and billed the customer $560.If direct materials for the job cost $130, and direct labor cost $180, what was the applied overhead for the job?

A sunk cost is always relevant.

Which of the following works backward from the desired price to find the allowable cost?

Memuru Company has the following information pertaining to its two divisions for last year: Common expenses are $30,000 for the year. What is the segment margin for Division Y?

Qualitative factors that should be considered when evaluating a make-or-buy decision are

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. -Decision model