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Question;16. The key to analyzing a sell as is or;process further decision is to determine that;A. opportunity costs exceed sunk costs.;B. incremental revenues exceed incremental;costs.;C. differential costs do not exist.;D. all allocated costs are included in the;decision.;17. In a make or buy decision which of the;following costs would be considered relevant?;A. Avoidable costs.;B. Unavoidable costs.;C. Sunk costs.;D. Allocated costs.;18. Which of the following qualitative;factors favors the buy option in the make or buy decision?;A. Production scheduling.;B. Utilization of idle capacity.;C. Ability to control quality.;D. Technical expertise of supplier.;19. Product Z sells for $18 per unit as is;but if it is enhanced it can be sold for $24 per unit. The enhancement process;will cost $50,000 for 10,000 units. If the 10,000 units of Product Z are sold;as is without further processing, the company;A. will incur an incremental profit of;$10,000.;B. will incur an opportunity cost of;$10,000.;C. will incur an incremental profit of $1;per unit.;D. will incur an incremental loss of $6 per;unit.;20. A(n) _____________ is the minimum cost;that can be incurred, which when subtracted from the selling price, allows for;a desired profit to be earned.;A. relevant cost.;B. opportunity cost.;C. incremental cost.;D. target cost.;21. Product X sells for $80 per unit in the;marketplace and ABC Company requires a 35% minimum profit margin on all product;lines. In order to compete in this market, the target cost for Product X must;be equal to or lower than;A. $28;B. $45;C. $52;D. $80;22. Which of the following costs are not;relevant in a decision to continue or discontinue a segment of the organization?;A. Avoidable costs.;B. Unavoidable costs.;C. Opportunity costs.;D. Differential costs.;23. The decision to continue or discontinue;a segment of the business should focus on;A. sales minus total variable expenses and;total fixed expenses.;B. sales minus total variable expenses and;avoidable fixed expenses of the segment.;C. sales minus total variable expenses and;allocated fixed expenses of the business.;D. none of the above.;24. The decision for solving production mix;problems involving multiple products and scarce production resources should;focus on;A. gross profit of each product.;B. sales price of each product.;C. contribution margin per unit of scarce;resource.;D. contribution margin of each product.;25. XYZ Company produces three products: A;B, and C. Product A has a contribution margin of $20 and requires 1 hour of;machine time. Product B has a contribution margin of $30 and requires 2 hours;of machine time. Product C has a contribution margin of $36 and requires 1.5;hours of machine time. If machine hours are considered scarce, in what product;mix order should XYZ Company schedule the production of Products A, B, and C;for the available machine hours?;A. First A, then B, then C.;B. First C, then A, then B.;C. First C, then B, then A.;D. First B, then C, then A.;26. A principal difference between;operational budgeting and capital budgeting is the time frame of the budget.;Because of this difference, capital budgeting;A. is an activity that involves only the;financial staff.;B. is done on a rolling budget period;basis.;C. focuses on the present value of cash;flows from investments.;D. is concerned with a long-term net income;forecast.;27. Capital budgeting differs from;operational budgeting because;A. depreciation calculations are required.;B. it considers the time value of money.;C. operating expenses are not relevant.;D. capital budgets don't affect cash flow.;28. Capital expenditure analysis, which;leads to the capital budget, attempts to determine the impact of a proposed;capital expenditure on the organization's;A. segment margin.;B. contribution margin.;C. ROI.;D. cost of capital.;29. The cost of capital used in the capital;budgeting analytical process is primarily a function of;A. ROE.;B. ROI.;C. the cost of acquiring the funds that;will be invested.;D. the discount rate.;30. For most firms, the cost of capital is;probably in the range of;A. the prime rate, plus or minus 2;percentage points.;B. less than 10%.;C. between 10% and 20%.;D. more than 20%.


Paper#45019 | Written in 18-Jul-2015

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