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Question;WEEK 6;Question 1. Question;(TCO 9) To guide cost;allocation decisions, the cause-and-effect criterion;may allocate corporate salaries to divisions;based on profits.;is used less frequently than the other;criteria.;is the primary criterion used in;activity-based costing.;is a difficult criterion on which to obtain;agreement.;Question 2. Question;(TCO 9) Which cost-allocation;criterion is superior when making an economic decision?;Fairness-or-equity criterion;Ability-to-bear criterion;Cause-and-effect criterion;All of the above;Question 3. Question;(TCO 9) The MOST likely reason;for NOT allocating corporate costs to divisions include that;divisions receive no benefits from corporate;costs.;these costs are not controllable by division;managers.;these costs are incurred to support division;activities, not corporate activities.;division resources are already used to attain;corporate goals.;Question 4. Question;(TCO 9) Identifying;homogeneous cost pools;requires judgment and should be reevaluated;on a regular basis.;should include the input of management.;should include a cost-benefit analysis.;All of the above;Question 5. Question;(TCO 9) The Hassan Corporation;has an electric mixer division and an electric lamp division. Of a $20,000,000 bond issuance, the electric;mixer division used $14,000,000 and the electric lamp division used $6,000,000;for expansion. Interest costs on the;bond totaled $1,500,000 for the year.;Which corporate costs should be allocated to divisions?;Variable costs;Fixed costs;Neither fixed nor variable costs;Both fixed and variable costs;Question 6. Question;(TCO 10) The stage of the;capital budgeting process in which a firm obtains funding for the project is;the;obtain-information stage.;implement the decision, evaluate performance;and learn stage.;make-decisions-by-choosing-among-alternatives;stage.;make-predictions stage.;Question 7. Question;(TCO 10) Assume your goal in;life is to retire with $1 million.;Howmuch would you need to save at the end of each year if investment;rates average 9% and you have a 15-year work life?;$41,286;$37,853;$25,554;$34,059;Question 8. Question;(TCO 10) If the net present;value for a project is zero or positive, this means that the;project should be accepted.;project should not be accepted.;expected rate of return is below the required;rate of return.;Both 1 and 3 are correct.;Question 9. Question;(TCO 10) An important;advantage of the net-present-value method of capital budgeting over the;internal rate-of-return method is;the net present value method is expressed as;a percentage.;the net present values of individual projects;can be added to determine the effects of accepting a combination of projects.;there is no advantage.;Both 1 and 2 are correct.;Question 10. Question;(TCO 10) Upper Darby Park;Department is considering a new capital investment. The following information is available on the;investment. The cost of the machine will;be $150,000. The annual cost savings if;the new machine is acquired will be $40,000.;The machine will have a five-year life, at which time the terminal;disposal value is expected to be $20,000.;Upper Darby Park Department is assuming no tax consequences. If Upper Darby Park Department has a required;rate of return of 10%, which of the following is closest to the present value;of the project?;$1,632;$150,000;$14,060;$12,418;WEEK 7;Question 1. Question;(TCO 11) The four cost;categories in a cost of quality program are;product design, process design, internal;success, and external success.;prevention, appraisal, internal failure, and;external failure.;design, conformance, control, and process.;design, process specification, on-time;delivery, and customer satisfaction.;Question 2. Question;(TCO 11) ________ is a formal;means of distinguishing between random and nonrandom variation in an operating;process.;Statistical process control (SPC);A Pareto diagram;A cause-and-effect diagram;A fishbone diagram;Question 3. Question;(TCO 11) Which of the;following is NOT one of the three mainmeasurements in the theory of;constraints?;Investments or inventory;Other operating costs;Manufacturing lead time;Throughput contribution;Question 4. Question;(TCO 11) A liability claim is;an example of;external failure costs.;internal failure costs.;prevention costs.;appraisal costs.;Question 5. Question;(TCO 11) Regal Products has a;budget of $900,000 in 20X3 for prevention costs. If it decides to automate a portion of its;prevention activities, it will save $60,000 in variable costs. The new method will require $18,000 in;training costs and $120,000 in annual equipment costs. Management is willing to adjust the budget;for an amount up to the cost of the new equipment. The budgeted production level is 150,000;units. Appraisal costs for the year are;budgeted at $600,000. The new prevention;procedures will save appraisal costs of $30,000. Internal failure costs average $15 per failed;unit of finished goods. The internal;failure rate is expected to be 3% of all completed items. The proposed changes will cut the internal;failure rate by one-third. Internal;failure units are destroyed. External;failure costs average $54 per failed unit.;The company's average external failuresaverage 3% of units sold. The new proposal will reduce this rate by;50%. Assume all units produced are sold;and there are no ending inventories. How;much will appraisal costs change assuming the new prevention methods reduce;material failures by 40% in the appraisal phase?;$60,000 increase;$12,000;decrease;$30,000 decrease;$240,000 decrease;Question 6. Question;(TCO 12) The amount of time;between when a customer places an order for a product or requests a service to;when the product or service is delivered to that customer is called;customer-response time.;order receipt time.;order delivery time.;manufacturing lead time.;Question 7. Question;(TCO 12) Quality costs include;prevention costs.;stockout costs.;purchasing costs.;ordering costs.;Question 8. Question;(TCO 12) Which of the;following statements about the economic-order-quantity decision model is FALSE?;It assumes ordering costs and carrying costs;are relevant.;It assumes stockout costs are irrelevant if;no stockouts occur.;It assumes purchasing costs are relevant when;the cost per unit changes due to the quantity ordered.;It assumes quality costs are irrelevant if;quality is unaffected by the number of units purchased.;Question 9. Question;(TCO 12) When using a;vendor-managed inventory system to enhance the features of supply-chain;management, a challenging issue is;problems of communication and trust.;the sharing of accurate, timely, and relevant;information about sales forecasts.;potentially incompatible information systems.;All of the above;Question 10. Question;(TCO 12) Liberty Celebrations;Inc., manufactures a line of flags. The;annual demand for its flag display is estimated to be 100,000 units. The annual cost of carrying one unit in;inventory is $1.60, and the cost to initiate a production run is $40. There are no flag displays on hand but;Liberty had scheduled 60 equal production runs of the display sets for the;coming year, the first of which is to be run immediately. Liberty Celebrations has 250 business days;per year. Assume that sales occur;uniformly throughout the year and that production is instantaneous.;If Liberty Celebrations does not maintain a safety stock;the estimated total carrying cost for the flag displays for the coming year is;$2,000.;$2,200.;$2,400.;$3,000.;(US & Canada)


Paper#38034 | Written in 18-Jul-2015

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