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Question;Chapter;18;Decision;making: specific decisions;1.Which of the following items is an;important characteristic of decision-making?;(a);Concentration on historical data.;(b);Exclusion of forecasted data.;(c);An accruals and prepayments approach.;(d);Exclusion of non-relevant costs.;2.Which of the following cost classification;methods is not relevant in decision-making?;(a);Direct and indirect.;(b);Fixed and variable.;(c);Controllable and non-controllable.;(d);Avoidable and non-avoidable.;3.An opportunity cost may best be described;as;(a);The cost of an alternative course of action.;(b);The cost of losing an order to a competitor.;(c);The cost involved in seeking new opportunities.;(d);The cost incurred in training new staff.;4.Which of the following cost classification;would be classified as non-relevant when considering the;temporary;closure of a factory?;(a);Direct materials.;(b);Fixed overheads.;(c);Variable overheads.;(d);Direct labour.;5.Which of the following costs is likely to;be the minimum price charged for a special order?;(a);Total direct and indirect cost.;(b);Variable cost.;(c);Total production cost.;(d);Total cost plus a profit margin.;6.What is the ideal transfer price that;would satisfy both the supplying and receiving segment?;(a);Market price.;(b);Adjusted market price.;(c);Standard variable cost plus the opportunity cost.;(d);Total standard cost plus a profit margin.;Chapter;19;Decision;making: capital investment;1.Which one of the following is not normally;a characteristic of major capital expenditure projects?;(a);The benefits from the expenditure will rise over a number of years.;(b);The costs can be estimated with a fair degree of certainty.;(c);The project is likely to involve considerable expenditure.;(d);The project is an important part of a company?s strategic planning.;2.Which one of the following is not a;technique used for capital investment appraisal?;(a);The payback method.;(b);The accounting rate of return method.;(c);Discounted cash flow techniques.;(d);Capital budgeting.;3.Which of the following factors is;irrelevant when using the payback method?;(a);Depreciation of the initial asset acquired.;(b);The annual financial benefit arising from the project.;(c);The total initial cost of the investment.;(d);The incidence of cash flows arising from the project.;4.If an investment appraisal exercise is;undertaken using the techniques of discounted cash flow;which;of the following statements correctly shows the reasoning behind the preferred;option?;(a);The option shows the highest cash inflow.;(b);The option recoups the initial investment in the shortest possible time.;(c);The option has the highest positive net present value.;(d);The option generates profits more quickly than the other options.;5.XYZ Ltd has used DCF as a technique to;evaluate a project which has an initial capital outlay of;?100;000, the project has a 3 year life and achieves a positive net present value as;a result of the following;cash;inflows (all year end cash flows).;Year Cash inflow ?000;1;50;2;60;3;40;The;project has no residual value at the end of the 3 year period and the company;evaluates;projects;using a discount rate of 15%. Discount factors are as follows;Year Factor (15%);0;1;1;0.87;2;0.76;3;0.66;By;how much could the initial capital investment increase for the project to cease;to be worthwhile?;(a);?15 500.;(b);?25 000.;(c);?33 000.;(d);?50 000.;6.Which of the following is not considered;to be an appropriate form of finance for capital investment;projects?;(a);An issue of share capital.;(b);A bank overdraft.;(c);The issue of a debenture.;(d);Leasing.;Chapter;20;Contemporary;issues in management;accounting;1.Activity-based costing uses the term ?cost;driver?. What is this?;(a);An instruction from management to reduce operating costs.;(b);An activity which generates a cost.;(c);A fixed overhead absorption technique.;(d);A convenient point in a costing system for the collection of costs.;2.Which of the following is not a benefit;likely to arise from the implementation of a ?just in time?;costing;system?;(a);A reduction in ordering costs.;(b);A reduction in raw material stock holding costs.;(c);A reduction in the investment in working capital.;(d);A reduction in production delays as a result of ?stockouts?.;3.Which of the following categories of costs;is likely to increase following the introduction of a;system;of total quality management (TQM) by a business?;(a);Wastage.;(b);Warranty claims.;(c);Rectification of damage caused by faulty products.;(d);Training of employees.;4.Which of the following potential trigger;points is not normally adopted in backflush costing?;(a);When the finished units are produced.;(b);When the raw materials are purchased and the finished units are produced.;(c);When the raw materials are purchased and the finished units are sold.;(d);When the finished units are sold.;5.What does the following definition best;describe: ?A system that tracks and accumulates the;actual costs;attributable to products from the time that they are;originally conceived until the time that they are finally;abandoned??;(a);Life cycle budgeting.;(b);Life cycle costing.;(c);Total product costing.;(d);Total absorption costing.;6.Which essential characteristic;distinguishes strategic management accounting from conventional;management;accounting?;(a);It is the sole responsibility of the strategic management team.;(b);It forms part of the strategic planning process.;(c);It incorporates non-financial information.;(d);It incorporates data external to the entity.;7.To which management accounting technique;does the following definition relate:?A;costing system;that enables the estimated cost of a product to be;established??;(a);Absorption costing.;(b);Standard costing.;(c);Target costing.;(d);Throughput accounting.

 

Paper#44993 | Written in 18-Jul-2015

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