Question 1 opportunity cost is best described by which of the

Question 1  

Opportunity cost is best described by which of the following?

Benefits foregone by choosing a particular alternative course of action

Costs that were incurred in the past and cannot be changed

The distribution of all products to be sold

Expected future costs that differ among alternatives

 

Question 2  

A relevant cost is best described by which of the following?

A factor that restricts production or sales of a product

Cost of developing, producing, and delivering a product or service

Costs that were incurred in the past and cannot be changed

Expected future costs that differ among alternatives

 

Question 3  

Contribution margin per unit is best described by which of the following?

Sales price per unit minus fixed cost per unit

Sales price per unit minus variable cost unit

Sales price per unit minus fixed and variable costs per unit

Units sold time contribution margin ratio

 

Question 4  

Which of the following is a sunk cost?

Operating costs for a new vehicle

Trade in value of old vehicle

Purchase price of vehicle to be traded in

Purchase price of new vehicle

 

Question 5  

Managers should consider ________ when making any sort of decision.

only fixed costs

sunk costs

only variable costs

revenues that differ among alternatives

 

Question 6  

Managers should consider all of the following when deciding whether to accept a special order, except

available excess capacity.

the variable costs associated with the special order.

the effect of the order on regular sales.

fixed costs that will not be affected by the order.

 

Question 7  

Blue Technologies manufactures and sells DVD players. Great Products Company has offered Blue Technologies $22 per DVD player for 10,000 DVD players. Blue Technologies’ normal selling price is $30 per DVD player. The total manufacturing cost per DVD player is $12 and consists of variable costs of $14 per DVD player and fixed overhead costs of $4 per DVD player. (NOTE: Assume excess capacity and no effect on regular sales.)

How much are the expected increase (decrease) in revenues and expenses from the special sales order?

Expected increase in revenues $220,000; expected increase in expenses $140,000

Expected increase in revenues $220,000; expected increase in expenses $40,000

Expected increase in revenues $300,000; expected increase in expenses $140,000

Expected increase in revenues $220,000; expected increase in expenses $120,000

 

Question 8  

Which of the following types of cash outlays has its own budget?

Capital expenditures

Dividends

Income taxes

All of the above

 

Question 9  

A company should ________ when projecting cash receipts for a given month.

include only cash collections from sales made in that month

only list COD sales made in that month

only list credit sales made in that month

include cash to be collected in that month regardless of when the sale was made

 

Question 10  

The term cash budget is best defined by which of the following?

A company’s plan for purchases of property, plant and equipment, and other long-term assets

Details as to how the company expects to go from the beginning cash balance to the desired ending cash balance

A system for evaluating the performance of each responsibility center and its manager

A budget that projects cash inflows and outflows and the end of period budgeted balance sheet

 

Question 11  

Which of the following budgets projects cash inflows and outflows and the budgeted balance sheet?

Purchases budget

Capital expenditures budget

Financial budget

Cash budget

 

Question 12  

Which of the following is an example of a financial budget?

Budgeted balance sheet

Sales budget

Budgeted income statement

Operating expenses budget

 

Question 13  

Eastern Corporation collects 10% in the second month following sale, 55% in the month following sale and 35% of a month’s sales in the month of sale. Budgeted sales for the upcoming four months are:

April budgeted sales$100,000

May budgeted sales$150,000

June budgeted sales$230,000

July budgeted sales$180,000

The amount of cash that will be collected in July is budgeted to be

$63,000.

$204,500.  

$173,000.

$197,000.

 

Question 14  

Romona Company expects its November sales to be 20% higher than its October sales of 165,000. All sales are on credit and are collected as follows: 35% in the month of the sale and 60% in the following month. Purchases were $110,000 in October and are expected to be $140,000 in November. Purchases are paid 40% in the month of purchase and 60% in the following month. The cash balance on November 1 is $13,500. The cash balance on November 30 will be

$46,300.

$59,800.

$2,050.

$32,800.

 

Question 15  

Which of the following is a disadvantage of decentralization?

Unit managers may not understand the big picture of the company.

Management does not have time to concentrate on long-term strategic planning.

Unit managers have decreased motivation and retention.

Managers receive training and experience to allow advancement in the organization.

 

Question 16  

The reservations department for a car rental chain is likely to be classified as a(n)

cost center.

investment center.

profit center.

revenue center.

 

Question 17  

The production line at Morningstar Farms is most likely treated as a(n)

investment center.

cost center.

profit center.

revenue center.

 

Question 18 

The regional sales department for Xerox copiers is most likely treated as a(n)

cost center.

investment center.

profit center.

revenue center.

 

Question 19 

The Corn Flakes product line at Kellogg is most likely treated as a(n)

cost center.

investment center.

profit center.

revenue center.

 

Question 20  

The subscription sales manager for The New York Times would be in charge of a(n)

cost center.

investment center.

profit center.

revenue center.

 

Question 21  

The CEO of Banana Republic, a division of The Gap, Inc., would be in charge of a(n)

cost center.

investment center.

profit center.

revenue center.

 

Question 22  

Culinary Kitchen Supply produces bamboo cutting boards. The standard material cost for the bamboo used in each lamp is $18 per square foot. Each board requires 3 square feet of bamboo. In August, the company produced 1,200 cutting boards. There were 3,400 square feet of bamboo used during the month. The bamboo used had an actual cost $20 per square foot. What was the materials quantity variance in August for bamboo?

$3,600 favorable  

$3,600 unfavorable

$4,000 favorable

$4,000 unfavorable

 

Question 23 

Sole Purpose manufactures beach shoes that use a canvas as the main raw material. Data related to the shoes for June follows:

Standard quantity per unit of output (yards)4.5

Standard price per yard$10.50

Actual materials purchased in yards16,500

Actual cost of materials purchased$90,450

Actual materials used in production (yards)16,000

Actual outputs in units3,600

What is the materials quantity variance for canvas for June?

$1,645 favorable

$2,100 favorable  

$1,645 unfavorable

$2,100 unfavorable

 

Question 24  

Madden Corporation manufactures t-shirts, which is its only product. The standards for t-shirts are as follows:

Standard direct materials cost per yard$ 8

Standard direct materials quantity per t-shirt (yards)1.5

During the month of May, the company produced 1,250 t-shirts. Related production data for the month follows:

Actual yards of direct material purchased1,400

Actual direct materials total cost$ 15,500

What is the direct materials quantity variance for the month?

$ 4,300 favorable

$ 4,300 unfavorable

$ 3,800 favorable     

$ 3,800 unfavorable