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accounting II




Question;1.) The method of evaluating financial data that change under;different courses of action is;called;a. financial statement analysis.;b. break-even analysis.;c. incremental analysis.;d. cost-benefit analysis.;2.) Braizen, Inc. produces a product with;a $30 per-unit variable cost and an $80 per-unit sales price. Fixed;manufacturing overhead costs are $100,000. The firm has a one-time opportunity;to sell an additional 1,000 units at $60 each that would not affect its current;sales. Assuming the company has sufficient capacity to produce the additional;units, how would the acceptance of the special order affect net income?;a. income would decrease by $30,000.;b. income would increase by $30,000.;c. income would increase by $140,000.;d. income would increase by $40,000.;3.) Opportunity costs are;a. included in inventory.;b. foregone benefits.;c. sunk costs.;d. included in cost of goods sold.;4.) A sunk cost is a cost that;a. has been incurred and cannot be eliminated.;b. is never relevant in decision-making.;c. is never a differential cost.;d. all of these.;5.) _____________ is a cost management technique in which the;firm determines the required;cost for a product or service in order to earn a desired profit when the marketplace establishes the product's;selling price;a. relevant costing.;b. product costing.;c. differential costing.;d. target costing.;6.) ______________ can be measured as the income that could have;been earned on an asset, based on the;potential rate of return that is lost or sacrificed;when one alternative use of the asset is chosen over another;a. target cost.;b. sunk cost.;c. opportunity cost.;d. allocated cost.;7.) _____________ costs between two alternative projects are;those that would result from;selecting one alternative instead of the other;a. allocated.;b. differential.;c. sunk.;d. irrelevant.;8.) Which of the following cost classifications would not be;considered relevant in;comparing decision alternatives?;a. opportunity cost.;b. differential cost.;c. sunk cost.;d. none of these.;9.) In considering whether to accept a special order at a price;less than the normal selling price of;the product and where the additional sales will make use of present idle capacity, which of the following costs;will not be relevant?;a. direct labor.;b. direct materials.;c. variable manufacturing overhead.;d. fixed manufacturing overhead that cannot be;avoided.;10.) A cost classified "for decision making purposes;would include;a. period cost.;b. opportunity cost.;c. controllable cost.;d. inventoriable cost.;11.) Relevant costs in decision-making;a. are future costs that represent differences;between decision alternatives.;b. result from past decisions.;c. should not influence the decision.;d. none of these.;12.) If a cost is irrelevant to a decision, the cost could not be;a;a. fixed cost.;b. sunk cost.;c. differential cost.;d. variable cost.;13.) The potential rental value of space used in the manufacturing;process;a. is a variable production cost.;b. is an unavoidable production cost.;c. is a sunk production cost.;d. is an opportunity cost if production is not;outsourced.;14.). Greenland Sports, Inc. has been asked to submit a bid to the;National Hockey League on supplying 1,000 pairs of professional quality skates.;The cost per pair of skates has been determined as follows;Direct Materials $80;Direct Labor 60;Variable overhead 30;Fixed overhead (allocated) 20;Other non-manufacturing costs;associated with each pair of skates are;Variable selling cost;(commission) $25;Fixed selling and;administrative cost 10;Assume the commission on the;sale of skates to the National Hockey League would be reduced to $15 per pair;and that available production capacity exists to produce the 1,000 pairs of;skates, the lowest price the firm can bid is some price greater than;a. $185.;b. $190.;c. $215.;d. $225.;15.) 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.;16.) 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;17.) 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.;18.) 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.;19.) 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.;20.) 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;21.) 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.;22.) 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 these.;23.) 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.;24.) 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.;25.) 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.


Paper#45331 | Written in 18-Jul-2015

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