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finance and data bank




Question;Multiple Choice Questions;1. Managerial accountants;A. rarely become involved in an organization's;decision-making activities.;B. make decisions that focus solely on an;organization's accounting matters.;C. collect data and provide information so that;decisions can be made.;D. often serve as a cross-functional team;member, making a wide range of decisions.;E. become involved in activities "C;and "D.;2. Factors in a decision problem that cannot;be expressed in numerical terms are;A. qualitative in nature.;B. quantitative in nature.;C. predictive in nature.;D. sensitive in nature.;E. uncertain in nature.;3. At which step or steps in the decision-making;process do qualitative considerations generally have the greatest impact?;A. Specifying the criterion and identifying the;alternatives.;B. Developing a decision model.;C. Collecting the data.;D. Making a decision.;E. Identifying the alternatives.;4. An accounting information system should be;designed to provide information that is useful.;To be useful the information must be;A. qualitative rather than quantitative.;B. unique and unavailable through other sources.;C. historical in nature and not purport to;predict the future.;D. marginal between two alternatives.;E. relevant, accurate, and timely.;5. To be useful in decision making, information;should possess which of the following characteristics?;Relevance;Accuracy;Timeliness;A.;Yes;No;Yes;B.;Yes;Yes;No;C.;Yes;Yes;Yes;D.;No;Yes;Yes;E.;No;No;Yes;6. A trade-off in a decision situation sometimes;occurs between information;A. accuracy and relevance.;B. relevance and uniqueness.;C. accuracy and timeliness.;D. sensitivity and accuracy.;E. sensitivity and relevance.;7. Which of the following best defines the;concept of a relevant cost?;A. A past cost that is the same among;alternatives.;B. A past cost that differs among alternatives.;C. A future cost that is the same among;alternatives.;D. A future cost that differs among;alternatives.;E. A cost that is based on past experience.;8. Consider the following costs and;decision-making situations;I.;The;cost of existing inventory, in a keep vs. disposal decision.;II.;The;cost of special electrical wiring, in an equipment acquisition decision.;III.;The;salary of a supervisor who will be transferred elsewhere in the organization;in a department-closure decision.;Which;of the above costs is (are) relevant to the decision situation noted?;A. I only.;B. II only.;C. III only.;D. I and II.;E. II and III.;9. The following costs are relevant to the;decision situation cited except;A. the cost of hiring a full-time staff;attorney, in a decision to establish an in-house legal department or retain the;services of a prominent law firm.;B. the remodeling cost of existing office space;in a firm's decision to stay at its current location or move to a new building.;C. the long-term salary costs demanded by Joe;Torrez (a superstar) and Rip Moran (an average player) in baseball contract;negotiations, in a decision that determines the amounts by which ticket prices;must be raised.;D. the cost to enhance an airline's Web site, in;a decision to expand existing service to either Salt Lake City or Phoenix.;E. the commissions that could be earned by a;salesperson, in a decision that involves salesperson compensation methods;(i.e., commissions or flat monthly salaries).;10. Which of the following costs can be ignored;when making a decision?;A. Opportunity costs.;B. Differential costs.;C. Sunk costs.;D. Relevant costs.;E. All future costs.;11. The book value of equipment currently owned;by a firm is an example of a(n);A. future cost.;B. differential cost.;C. comparative cost.;D. opportunity cost.;E. sunk cost.;12. The cost of inventory currently owned by a;firm is an example of a(n);A. opportunity cost.;B. sunk cost.;C. relevant cost.;D. differential cost.;E. future cost.;13. The City of Miami is about to replace an old;fire truck with a new vehicle in an effort to save maintenance and other;operating costs. Which of the following;items, all related to the transaction, would not be considered in the;decision?;A. Purchase price of the new vehicle.;B. Purchase price of the old vehicle.;C. Savings in operating costs as a result of the;new vehicle.;D. Proceeds from disposal of the old vehicle.;E. Future depreciation on the new vehicle.;14. Elegant, Inc., has $125,000 of inventory that;suffered minor smoke damage from a fire in the warehouse. The company can sell the goods "as;is" for $45,000, alternatively, the goods can be cleaned and shipped to;the firm's outlet center at a cost of $23,000. There the goods could be sold for $80,000. What alternative is more desirable and what is;the relevant cost for that alternative?;A. Sell "as is," $125,000.;B. Clean and ship to outlet center, $23,000.;C. Clean and ship to outlet center, $103,000.;D. Clean and ship to outlet center, $148,000.;E. Neither alternative is desirable, as both;produce a loss for the firm.;15.;In early July;Mike Gottfried purchased a $70 ticket to the December 15 game of the Chicago;Titans. (The Titans belong to the;Midwest Football League and play their games outdoors on the shore of Lake;Michigan.) Parking for the game was;expected to cost approximately $22, and Gottfried would probably spend another;$15 for a souvenir program and food. It;is now December 14. The Titans were;having a miserable season and the temperature was expected to peak at 5 degrees;on game day. Mike therefore decided to;skip the game and took his wife to the movies, with tickets and dinner costing;$50. The sunk cost associated with this;decision situation is;A. $20.;B. $50.;C. $70.;D. $107.;E. some other amount.;16.;In early July;Jim Lopez purchased a $70 ticket to the December 15 game of the Chicago;Titans. (The Titans belong to the;Midwest Football League and play their games outdoors on the shore of Lake;Michigan.) Parking for the game was;expected to cost approximately $22, and Lopez would probably spend another $15;for a souvenir program and food. It is;now December 14. The Titans were having;a miserable season and the temperature was expected to peak at 5 degrees on;game day. Jim therefore decided to skip;the game and took his wife to the movies, with tickets and dinner costing;$50. The amount of sunk cost that should;influence Jim?s decision to take his wife to the movies and dinner is;A.;$0.;B.;$20.;C.;$50.;D.;$70.;E.;some other;amount.;17. An opportunity cost may be described as;A. a forgone benefit.;B. an historical cost.;C. a specialized type of variable cost.;D. a specialized type of fixed cost.;E. a specialized type of semivariable cost.;18. The term "opportunity cost" is best;defined as;A. the amount of money paid for an item.;B. the amount of money paid for an item, taking;inflation into account.;C. the amount of money paid for an item, taking;possible discounts into account.;D. the benefit associated with a rejected;alternative when making a choice.;E. an irrelevant decision factor.;19. A factory that makes a part has significant;idle capacity. The factory's opportunity;cost of making this part is equal to;A. the variable manufacturing cost per unit.;B. the fixed manufacturing cost per unit.;C. the semivariable cost per unit.;D. the total manufacturing cost per unit.;E. zero.;20. Susan is contemplating a job offer with an;advertising agency where she will make $54,000 in her first year of employment.;Alternatively, Susan can begin to work;in her father's business where she will earn an annual salary of $38,000. If Susan decides to work with her father, the;opportunity cost would be;A. $0.;B. $38,000.;C. $54,000.;D. $92,000.;E. irrelevant in deciding which job offer to;accept.;21. Which of the following costs should be used;when choosing between two decision alternatives?;Relevant;Cost;Sunk;Cost;Opportunity;Cost;A.;No;Yes;No;B.;No;Yes;Yes;C.;Yes;No;No;D.;Yes;No;Yes;E.;Yes;Yes;Yes;22. Triumph, Inc., is studying whether to expand;operations by adding a new product line.;Which of the following choices correctly denotes the costs that should;be considered in this decision?;Opportunity Cost;Sunk Cost;A.;Yes;Yes;B.;Yes;Sometimes;C.;Yes;No;D.;No;Yes;E.;No;No;23. A special order generally should be accepted;if;A. its revenue exceeds allocated fixed costs;regardless of the variable costs associated with the order.;B. excess capacity exists and the revenue;exceeds all variable costs associated with the order.;C. excess capacity exists and the revenue;exceeds allocated fixed costs.;D. the revenue exceeds total costs, regardless;of available capacity.;E. the revenue exceeds variable costs;regardless of available capacity.;24. Two months ago, Victory purchased 4,500;pounds of Hydrol, paying $15,300. The;market for this product has been very strong since the acquisition, with the;market price jumping to $4.05 per pound. (Victory can buy or sell Hydrol at this;price.) The company recently received a special-order;inquiry, one that would require the use of 4,200 pounds of Hydrol. Which of the following is (are) relevant in;deciding whether to accept the special order?;A. The 300-pound remaining inventory of Hydrol.;B. The $4.05 market price.;C. The $3.40 purchase price.;D. 4,500 pounds of Hydrol.;E. More than one of the above factors are;relevant.;25. Flower Company, which is operating at;capacity, desires to add a new service to its rapidly expanding business. The service should be added as long as service;revenues exceed;A. variable costs.;B. fixed costs.;C. the sum of variable costs and fixed costs.;D. the sum of variable costs and any related;opportunity costs.;E. the sum of variable costs, fixed costs, and;any related opportunity costs.;26. Baxter has been approached about providing a;new service to its clients. The company;will bill clients $120 per hour, the related hourly variable and fixed;operating costs will be $65 and $15, respectively. If all employees are currently working at;full capacity on other client matters, the per-hour opportunity cost of being;unable to provide this new service is;A. $0.;B. $40.;C. $55.;D. $80.;E. $120.;27. Snider, Inc., which has excess capacity, received;a special order for 4,000 units at a price of $15 per unit. Currently, production and sales are budgeted;for 10,000 units without considering the special order. Budget information for the current year;follows.;Sales;$190,000;Less: Cost of;goods sold;145,000;Gross margin;$ 45,000;Cost;of goods sold includes $30,000 of fixed manufacturing cost. If the special order is accepted, the;company's income will;A. increase by $2,000.;B. decrease by $2,000.;C. increase by $14,000.;D. decrease by $14,000.;E. change by some other amount.;28. Sound, Inc., reported the following results;from the sale of 24,000 units of IT-54;Sales;$528,000;Variable;manufacturing costs;288,000;Fixed;manufacturing costs;120,000;Variable;selling costs;52,800;Fixed;administrative costs;35,200;Rhythm;Company has offered to purchase 3,000 IT-54s at $16 each. Sound has available capacity, and the;president is in favor of accepting the order. She feels it would be profitable because no;variable selling costs will be incurred. The plant manager is opposed because the;full cost" of production is $17. Which of the following correctly notes the;change in income if the special order is accepted?;A. $3,000 decrease.;B. $3,000 increase.;C. $12,000 decrease.;D. $12,000 increase.;E. None of the above.;29. CompTronics, a manufacturer of computer;peripherals, has excess capacity. The;company's Utah plant has the following per-unit cost structure for item no. 89;Variable manufacturing;$40;Fixed manufacturing;15;Variable selling;8;Fixed selling;11;Traceable fixed;administrative;4;Allocated administrative;2;The;traceable fixed administrative cost was incurred at the Utah plant, in;contrast, the allocated administrative cost represents a "fair share;of CompTronics' corporate overhead. Utah;has been presented with a special order of 5,000 units of item no. 89 on which;no selling cost will be incurred. The;proper relevant cost in deciding whether to accept this special order would be;A. $40.;B. $59.;C. $61.;D. $80.;E. some other amount.;30. The term "outsourcing" is most;closely associated with;A. special-order decisions.;B. make-or-buy decisions.;C. equipment replacement decisions.;D. decisions to process joint products beyond;the split-off point.;E. decisions that involve limited resources.


Paper#44965 | Written in 18-Jul-2015

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