Question 1

Tactical decision making consists of choosing among alternatives with an immediate or limited end in view.

Accepted Answer

A) True 
 B)False

Question 2

Hobart Company produces speakers for home stereo units. The speakers are sold to retail music stores for $30. Manufacturing and other costs are as follows:   The variable distribution costs are for transportation to the retail music stores. The current production and sales volume is 20,000 per year. Capacity is 25,000 units per year.
A Memphis manufacturing firm has offered a one-year contract to supply speaker parts at a cost of $17.00 per unit. If Hobart Company accepts the offer, it will be able to rent unused space to an outside firm for $18,000 per year. All other information remains the same as the original data. What is the effect on profits if Hobart Company buys from the Memphis firm?

Accepted Answer

A)  decrease of $19,000 
B)  increase of $38,000 
C)  increase of $19,000 
D)  decrease of $6,000 
A)  decrease of $19,000 
B)  increase of $38,000 
C)  increase of $19,000 
D)  decrease of $6,000

Question 3

Tactical decision making includes decisions to make or buy a component.

Accepted Answer

A) True 
 B)False

Question 4

Cellestial Manufacturing Company produces Products A1, B2, C3, and D4 through a joint process. The joint costs amount to $200,000.   Which product(s) should be sold at split-off to maximize profits in the short run?

Accepted Answer

A)  Product A1 
B)  Product B2 
C)  Product D4 
D)  Products A1 and D4 
A)  Product A1 
B)  Product B2 
C)  Product D4 
D)  Products A1 and D4

Question 5

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

Question 6

Which of the following statement is true concerning the nature of tactical decisions?

Accepted Answer

A)  Tactical decisions are often small-scale actions. 
B)  Tactical decisions often have an immediate or limited end in view. 
C)  Tactical decisions should support alternatives that result in long-term competitive advantage. 
D)  all of the above statements are true. 
A)  Tactical decisions are often small-scale actions. 
B)  Tactical decisions often have an immediate or limited end in view. 
C)  Tactical decisions should support alternatives that result in long-term competitive advantage. 
D)  all of the above statements are true.

Question 7

Future costs that differ across alternatives describe

Accepted Answer

A)  relevant costs. 
B)  target cost. 
C)  full costs. 
D)  activity-based costs. 
A)  relevant costs. 
B)  target cost. 
C)  full costs. 
D)  activity-based costs.

Question 8

Hobart Company produces speakers for PA systems. The speakers are sold to retail music stores for $30. Manufacturing and other costs are as follows:   The variable distribution costs are for transportation to the retail music stores. The current production and sales volume is 20,000 per year. Capacity is 25,000 units per year.
The speakers are currently unpackaged. Packaging them individually would increase costs by $1.20 per unit. However, the units could then be sold for $33.00. All other information remains the same as the original data. What is the effect on profits if Hobart Company packages the speakers?

Accepted Answer

A)  no change 
B)  decrease of $24,000 
C)  decrease of $36,000 
D)  increase of $36,000 
A)  no change 
B)  decrease of $24,000 
C)  decrease of $36,000 
D)  increase of $36,000

Question 9

Concierge Industries manufactures 40,000 components per year. The manufacturing cost of the components was determined as follows:   An outside supplier has offered to sell the component for $12.75.
What is the effect on income if Concierge Industries purchases the component from the outside supplier?

Accepted Answer

A)  $30,000 increase 
B)  $30,000 decrease 
C)  $270,000 increase 
D)  $270,000 decrease 
A)  $30,000 increase 
B)  $30,000 decrease 
C)  $270,000 increase 
D)  $270,000 decrease

Question 10

The U.S. government has set up foreign trade zones (FTZ) that

Accepted Answer

A)  are located on U.S. soil but are considered to be outside of U.S. commerce for tariff purposes. 
B)  are located in foreign countries and designed to export to the United States. 
C)  are located in foreign countries and are designed to import from the United States. 
D)  are located in the United States and are considered part of the United States for tariff purposes. 
A)  are located on U.S. soil but are considered to be outside of U.S. commerce for tariff purposes. 
B)  are located in foreign countries and designed to export to the United States. 
C)  are located in foreign countries and are designed to import from the United States. 
D)  are located in the United States and are considered part of the United States for tariff purposes.

Question 11

An important qualitative factor to consider regarding a special order is the

Accepted Answer

A)  variable costs associated with the special order. 
B)  avoidable fixed costs associated with the special order. 
C)  effect the sale of special-order units will have on existing customers. 
D)  incremental revenue from the special order. 
A)  variable costs associated with the special order. 
B)  avoidable fixed costs associated with the special order. 
C)  effect the sale of special-order units will have on existing customers. 
D)  incremental revenue from the special order.

Question 12

A special-order decision focuses on whether a specially priced order should be accepted or rejected.

Accepted Answer

A) True 
 B)False

Question 13

Mortimer Company manufactures three joint products: X, Y, and Z. The cost of the joint process is $30,000. Information about the three products follows:
   Required:

Accepted Answer

@#IMG-DLM& The joint costs are

Question 14

The cost of acquiring activity capacity is(are)

Accepted Answer

A)  Joint costs 
B)  Variable costing 
C)  Absorption costing 
D)  Resource spending 
A)  Joint costs 
B)  Variable costing 
C)  Absorption costing 
D)  Resource spending

Question 15

Yankton Industries manufactures 20,000 components per year. The manufacturing cost of the components was determined as follows:   An outside supplier has offered to sell the component for $23.50.
Yankton Industries can rent its unused manufacturing facilities for $45,000 if it purchases the component from the outside supplier.
What is the effect on income if Yankton purchases the component from the outside supplier?

Accepted Answer

A)  $25,000 increase 
B)  $45,000 increase 
C)  $75,000 decrease 
D)  $105,000 increase 
A)  $25,000 increase 
B)  $45,000 increase 
C)  $75,000 decrease 
D)  $105,000 increase

Question 16

For flexible resources, if the demand for an activity changes across alternatives, then resource spending will remain the same and costs are relevant.

Accepted Answer

A) True 
 B)False

Question 17

The following information pertains to the Dallas Churning Company's three products:   Assume that the selling price of product F is increased to $8.25 with a reduction in monthly sales to 400 units. Monthly profits will

Accepted Answer

A)  increase by $420. 
B)  decrease by $60. 
C)  increase by $180. 
D)  increase by $2,070. 
A)  increase by $420. 
B)  decrease by $60. 
C)  increase by $180. 
D)  increase by $2,070.

Question 18

Concierge Industries manufactures 40,000 components per year. The manufacturing cost of the components was determined as follows:   An outside supplier has offered to sell the component for $12.75.
Concierge Industries can rent its unused manufacturing facilities for $45,000 if it purchases the component from the outside supplier.
What is the effect on income if Concierge purchases the component from the outside supplier?

Accepted Answer

A)  $195,000 increase 
B)  $165,000 decrease 
C)  $225,000 decrease 
D)  $135,000 increase 
A)  $195,000 increase 
B)  $165,000 decrease 
C)  $225,000 decrease 
D)  $135,000 increase

Question 19

The future costs that differ across alternatives are called

Accepted Answer

A)  Sunk costs 
B)  Irrelevant costs 
C)  Relevant costs 
D)  Past costs 
A)  Sunk costs 
B)  Irrelevant costs 
C)  Relevant costs 
D)  Past costs

Question 20

Outsourcing refers to the move of a business function to another company, either in or out of the U.S.

Accepted Answer

A) True 
 B)False

Tactical decision making consists of choosing among alternatives with an immediate or limited end in view.

Tactical decision making includes decisions to make or buy a component.

Cellestial Manufacturing Company produces Products A1, B2, C3, and D4 through a joint process. The joint costs amount to $200,000. Which product(s) should be sold at split-off to maximize profits in the short run?

Maldovar 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?

Which of the following statement is true concerning the nature of tactical decisions?

Future costs that differ across alternatives describe

Concierge Industries manufactures 40,000 components per year. The manufacturing cost of the components was determined as follows: An outside supplier has offered to sell the component for $12.75. What is the effect on income if Concierge Industries purchases the component from the outside supplier?

The U.S. government has set up foreign trade zones (FTZ) that

An important qualitative factor to consider regarding a special order is the

A special-order decision focuses on whether a specially priced order should be accepted or rejected.

Mortimer Company manufactures three joint products: X, Y, and Z. The cost of the joint process is $30,000. Information about the three products follows: Required:

The cost of acquiring activity capacity is(are)

For flexible resources, if the demand for an activity changes across alternatives, then resource spending will remain the same and costs are relevant.

The following information pertains to the Dallas Churning Company's three products: Assume that the selling price of product F is increased to $8.25 with a reduction in monthly sales to 400 units. Monthly profits will

The future costs that differ across alternatives are called

Outsourcing refers to the move of a business function to another company, either in or out of the U.S.

Introduction to Cost Management

Basic Cost Management Concepts

Cost Behavior

Activity-Based Costing

Product and Service Costing: Job-Order System

Process Costing

Allocating Costs of Support Departments and Joint Products

Budgeting for Planning and Control Key

Standard Costing: a Functional-Based Control Approach

Decentralization: Responsibility Accounting, Performance Evaluation, and Transfer Pricing

Strategic Cost Management

Activity-Based Management

The Balanced Scorecard: Strategic-Based Control

Quality and Environmental Cost Management

Lean Accounting and Productivity Measurement

Cost-Volume-Profit Analysis

Pricing and Profitability Analysis

Capital Investment

Inventory Management: Economic Order Quantity, Jit, and the Theory of Constraints

Filters

Exam 17: Activity Resource Usage Model and Tactical Decision Making

Tactical decision making consists of choosing among alternatives with an immediate or limited end in view.

Tactical decision making includes decisions to make or buy a component.

Cellestial Manufacturing Company produces Products A1, B2, C3, and D4 through a joint process. The joint costs amount to $200,000. Which product(s) should be sold at split-off to maximize profits in the short run?

Maldovar 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?

Which of the following statement is true concerning the nature of tactical decisions?

Future costs that differ across alternatives describe

Concierge Industries manufactures 40,000 components per year. The manufacturing cost of the components was determined as follows: An outside supplier has offered to sell the component for $12.75. What is the effect on income if Concierge Industries purchases the component from the outside supplier?

The U.S. government has set up foreign trade zones (FTZ) that

An important qualitative factor to consider regarding a special order is the

A special-order decision focuses on whether a specially priced order should be accepted or rejected.

Mortimer Company manufactures three joint products: X, Y, and Z. The cost of the joint process is $30,000. Information about the three products follows: Required:

The cost of acquiring activity capacity is(are)

For flexible resources, if the demand for an activity changes across alternatives, then resource spending will remain the same and costs are relevant.

The following information pertains to the Dallas Churning Company's three products: Assume that the selling price of product F is increased to $8.25 with a reduction in monthly sales to 400 units. Monthly profits will

The future costs that differ across alternatives are called

Outsourcing refers to the move of a business function to another company, either in or out of the U.S.

Introduction to Cost Management

Basic Cost Management Concepts

Cost Behavior

Activity-Based Costing

Product and Service Costing: Job-Order System

Process Costing

Allocating Costs of Support Departments and Joint Products

Budgeting for Planning and Control Key

Standard Costing: a Functional-Based Control Approach

Decentralization: Responsibility Accounting, Performance Evaluation, and Transfer Pricing

Strategic Cost Management

Activity-Based Management

The Balanced Scorecard: Strategic-Based Control

Quality and Environmental Cost Management

Lean Accounting and Productivity Measurement

Cost-Volume-Profit Analysis

Pricing and Profitability Analysis

Capital Investment

Inventory Management: Economic Order Quantity, Jit, and the Theory of Constraints

Filters