Question;1.Relevant costs are often;referred to as: (Points: 2);unavoidable costs.;avoidable costs.;sunk costs.;reversible costs.;Question;2. 2.Centennial Tours is trying to decide which one of two tours it;will introduce. The costs and revenues associated with each alternative are;listed below;Tour A;Tour B;Projected;revenue;$7,000;$11,000;Variable;costs;1,000;6,000;Fixed;costs;3,000;3,000;Profit;$3,000;$1,000;What are the incremental (differential) costs of Tour B? (Points: 2);$2,000;$3,000;$4,000;$5,000;Question;3. 3.Emily paid $2 for a bottle of ThirstAid. Later while on a;hiking trip, she was offered $10 for the ThirstAid. Select the correct;statement from the following. (Points: 2);The $2 original purchase;price is a sunk cost.;If Emily drinks the ThirstAid, no opportunity cost is associated with her;decision.;The $10 offer is not relevant if Emily refuses to sell the ThirstAid.;All of the above are correct.;Question;4. 4.For purposes of decision making, avoidable costs are costs;that: (Points: 2);were incurred in the past.;will be incurred in the;future and differ between the alternatives.;do not differ between alternatives.;are not relevant in decision making.;Question;5. 5.Dalton Company is trying to decide between the following two;alternatives;Alternative A;Alternative B;Projected;revenue;$50,000;$60,000;Direct;material;6,000;12,000;Assembly;labor;9,000;9,000;Production;supervisor's salary;10,000;10,000;Facility-related;costs;10,000;15,000;Profit;$15,000;$14,000;Which of the following conclusions can be drawn from this example? (Points;2);Variable costs are always relevant for decision making.;Fixed costs are sunk and thus are never relevant for decision making.;Relevant costs may;include variable costs and fixed costs.;The amount of revenue is not relevant to this decision.;Question;6. 6.Alicia brought her lunch today but now a coworker has asked;her to go to the deli across the street. Select the correct statement from;the following. (Points: 2);The cost of the lunch Alicia already has is relevant to Alicia's decision to;have lunch with her friend.;The cost of the lunch Alicia already has represents the opportunity cost of;dining with her friend.;The cost to buy lunch at the deli is not relevant because it has not yet been;incurred.;The cost of the lunch that Alicia brought has nothing to do with her current;decision because it is a sunk cost.;Question;7. 7.Select the correct statement regarding relevant costs and;revenues. (Points: 2);Relevant costs are also known as avoidable costs.;Relevant costs are future-oriented.;Relevant revenues must differ between the alternatives.;All of the above are;correct.;Question;8. 8.Frank is trying to decide which one of two job offers he will;accept. Several items are presented below;Job;Criterion;Job Offer A;Job Offer B;(1);Base salary;$40,000;$40,000;(2);Overtime compensation;Comp. time;Hourly rate;(3);Moving allowance;$ 2,000;$ 2,000;(4);Signing bonus;$ 1,000;$ 0;(5);Job search costs;$ 500;$ 500;Which of the above job criterion would be considered sunk costs? (Points;2);(1), (3), (5);(2), (4);(5);None of the above;Question;9. 9.Which of the following costs generally is an example of a;product-level cost? (Points: 2);Inventory holding costs;Machine setup costs;Materials and labor;costs;Shipping and handling costs;Question;10. 10.The cost that is avoided when a company eliminates a single;item of a product or service is a: (Points: 2);batch-level cost.;facility-level cost.;product-level cost.;unit-level cost.;Question;11. 11.Select the incorrectstatement about the planning;process. (Points: 2);The longer the time period, the less specific the plans.;Planning decisions can often be sub-divided into three distinct planning;phases, short-term, intermediate-term, and long-term.;The nature of planning changes with the length of the time period being considered.;The shorter the time;period, the more general the plans.;Question;12. 12.Expressing plans for a business in financial terms is;commonly called: (Points: 2);master planning.;strategic planning.;budgeting.;operational planning.;Question;13. 13.Which of the following budgets or schedules uses data;contained in the selling and administrative expense budget? (Points: 2);Cash payments schedule;Cash receipts schedule;Inventory purchases budget;Sales budget;Question;14. 14.Maddon Company estimated that its inventory purchases for;January and February 2010 would be $300,000 and $370,000, respectively. The;company generally pays for 60% of its inventory purchases in the month of;purchase because it receives a 2% discount for timely payment. The;remaining 40% of purchases are paid for in the following month, and there;is no discount for these payments. What will be the amount of cash payments;for inventory in February 2010? (Points: 2);$324,400;$337,560;$328,340;$335,160;Question;15. 15.McDavid Company has completed its sales budget for the first;quarter of 2010. Projected credit sales for the first four months of the;year are shown below;January;$30,000;February;$36,000;March;$45,000;April;$48,000;The company's past records show collection of credit sales as follows: 30%;in the month of sale and the balance in the following month. The total cash;collection from receivables in February is expected to be: (Points: 2);$38,700;$45,000;$42,300;$31,800;Question;16. 16.Select the correct equation format for the purchases budget.;(Points: 2);Beginning inventory + expected sales = required purchases.;Expected sales + desired;ending inventory ? beginning inventory = required purchases.;Beginning inventory + expected sales ? desired ending inventory = required;purchases.;Expected sales + Desired ending inventory = required purchases.;Question;17. 17.With regards to financial statements, ?pro forma? means;(Points: 2);budgeted.;prepared in advance.;financial condition or position that can be expected if planning assumptions;prove correct.;all of the above.;Question;18. 18.Which of the following is nota benefit of budgeting?;(Points: 2);Sets realistic standards that serve as benchmarks for evaluating performance;Coordinates the activities of the company by integrating the plans of all;departments;Requires managers to plan ahead and to formalize their objectives;Provides assurance that;accounting records are in accordance with generally accepted accounting;principles;Question;19. 19.When Northern Company district managers submitted their;preliminary budget proposals, top management discovered that the southern;district manager had requested a new project management information system.;Unfortunately, the system is incompatible with the system used at;headquarters. Which of the following advantages of budgeting reduces the;likelihood that the company will end up with two incompatible systems?;(Points: 2);Planning;Corrective action;Performance measurement;Coordination;Question;20. 20.Select the incorrect statement about budgeting and human;behavior. (Points: 2);People are often uncomfortable with budgets.;Budgets are constraining.;Budgets limit individual freedom in favor of an established plan.;Few people find evaluation based on budget expectations stressful.
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