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Question;kaplan Gb519 final examkaplan Gb519 final exam;1.When managers produce value for;the customer, their orientation consists of all the following except;(Points: 2);Quality and Service.;Timeliness of delivery.;The ability to respond to the customer's desire for specific features.;State of the art;manufacturing facilities.;Question;2. 2.Important changes in the contemporary business environments;include all of the following except: (Points: 2);Management organizations.;Climate change.;Information technology.;Customer expectations.;Question;3. 3.Which of the following contemporary management techniques;requires a balancing of multiple goals? (Points: 2);Target costing.;The theory of constraints.;Benchmarking.;Business process improvement.;Enterprise;sustainability.;Question;4. 4.Over the past several years it has become increasingly;important for firms to improve achievement towards their social and;environmental responsibilities. What is the best way the management;accountant can help the firm improve on sustainability? (Points: 2);Participate in programs of environmental organizations.;Develop and implement a legal staff and public relations staff for dealing;with sustainability issues that may affect the firm.;Develop and implement a;sustainability scorecard.;Risk management.;Question;5. 5.The five steps of strategic decision making include all of the;following except: (Points: 2);Based on strategy and analysis, choose and implement the desired alternative.;Identify the alternative actions.;Determine the strategic issues surrounding the problem.;Select the proper cost;management technique.;Provide an ongoing evaluation of the effectiveness of the decision.;Question;6. 6.Factory overhead costs for a given period were 3 times as much;as the direct material costs. Prime costs totaled $2,000. Conversion costs;totaled $3,280. What are the direct labor costs for the period? (Points;2);$1,220.;$1,360.;$1,410.;$1,540.;Question;7. 7.Assume the following information pertaining to a Company;Prime costs = $195,000;Conversion Costs = $221,000;Direct Materials used = $85,000;Beginning Work-in-Process = $98,000;Ending Work-in-Process = $81,000;Factory overhead is calculated to be: (Points: 2);$306,000.;$26,000.;$110,000.;$84,000.;$111,000.;Question;8. 8.At the end of a fiscal year, overapplied factory overhead;should be: (Points: 2);Debited to Cost of Goods sold.;Credited to Cost of;Goods sold.;Debited to Cost of Good Manufactured.;None of the above.;Question;9. 9.The general sales manager's salary is an example of a: (Points;2);Customer unit-level cost.;Customer batch-level cost.;Customer-sustaining cost.;Distribution-channel cost.;Sales-level cost.;Question;10. 10.Standard costs are: (Points: 2);Planned costs the firm should attain.;Associated with direct materials and factory overhead only.;Associated with direct labor and factory overhead only.;Targeted low costs the firm should strive for.;None of the above.;Question;11. 11.The number of the same or similar units that could have been;produced given the amount of work actually performed on both complete and;partially complete units is referred to as: (Points: 2);Physical units.;Completed units.;Equivalent units.;Produced units.;Question;12. 12.In calculating unit cost in a process costing system;conversion cost" is defined as the sum of: (Points: 2);Direct and indirect material costs.;Direct and indirect labor costs.;Direct labor and factory overhead costs.;Indirect labor and factory overhead costs.;Question;13. 13.East Bay Fisheries Inc. processes king salmon for various;distributors. Two departments are involved ? processing and packaging. Data;relating to tons of king salmon processed in the processing department;during June 2013 are provided below;Tons;of;Percent CompletedKing Salmon Materials;Conversion;Work-in-Process Inventory ? June;1;1,500;90;80;Work-in-Process Inventory ? June;1;2,800;60;40;Started processing during;June;7,800;Total equivalent units for materials under the weighted-average method are;calculated to be: (Points: 2);6,830 equivalent units.;8,180 equivalent units.;6,980 equivalent units.;7,140 equivalent units.;7,620 equivalent units.;Question;14. 14.ABC Company uses a Materials Inventory account to record;both direct and indirect materials. ABC charges direct materials to WIP;while indirect materials are charged to the Factory Overhead account.;During the month of April, the company has the following cost information;Total Materials (Direct and Indirect) Purchased;= $ 90,000;Indirect Materials Issued to;Production;=;30,000;Total Materials Issued to;Production;=;110,000;Beginning Materials Inventory;=;50,000;The debit to Work-in-Process Inventory account for materials is: (Points;2);$110,000.;$30,000.;$90,000.;$80,000.;Question;15. 15.The contribution income statement would require a firm to;(Points: 2);Separate costs into;fixed and variable categories.;Separate revenue into different categories.;Round off amounts to the nearest dollar.;Ignore some estimated fixed expenses, such as depreciation, that don't;involve a cash outlay.;Restructure its accounting system to accommodate activity-based costing;Question;16. 16.Joint products are products that: (Points: 2);Have minor total sales value.;Have substantial sales;value.;Come from different production processes.;Are marketed in a joint marketing program.;Question;17. 17.Thompson Refrigerators Inc. needs to prepare pro forma;financial statements for the next fiscal year. To do so, the company must;forecast its total overhead cost. The actual machine hours and total;overhead cost are presented below for the past six months.;MONTH;TOTAL;O/H;MACHINE HOURS;Jan;$;8,258;2,134;Feb;8,006;2,045;Mar;8,387;2,276;Apr;8,832;2,743;May;8,921;2,834;June;7,841;2,034;Using the high-low method, unit variable overhead cost is calculated to be;(Points: 2);$1.35.;$1.15;$1.40.;$1.65.;$1.25.;Question;18. 18.Which one of the following methods of allocating joint costs;allocates joint costs to joint products on the basis of estimated sales;values at the split-off point? (Points: 2);Net realizable value;method.;Physical measure method.;Average cost method.;Net sales value method.;Sales value at split-off method.;Question;19. 19.Regression analysis is better than the high-low method of;cost estimation because regression analysis: (Points: 2);Is mathematical.;Can provide greater;precision and reliability.;Fits data into a mathematical equation.;Takes less time.;Is a statistical method.;Question;20. 20.Jackson, Inc. is preparing a budget for the coming year and;requires a breakdown of the cost of electrical power used in its factory;into the fixed and variable elements. The following data on the cost of;power used and direct labor hours worked are available for the last six;months of this year;Month;$ for Power;DL Hours;July;$;15,850;3,000;Aug;13,400;2,050;Sept;16,370;2,900;Oct;19,800;3,650;Nov;17,600;2,670;Dec;18,500;2,650;Total;$101,520;16,920;Assuming that Jackson uses the high-low method of analysis, the estimated;variable cost of steam per direct labor hour is: (Points: 2);$4.00.;$5.42.;$5.82.;$6.00.;Question;21. 21.Cleaning Care Inc. expects to sell 10,000 mops. Fixed costs;(for the year) are expected to be $10,000, unit sales price is expected to;be $12, and unit variable costs are budgeted at $7.;Cleaning Care's margin of safety (MOS) in units is: (Points: 2);1,000.;2,000.;4,000.;8,000.;9,000.;Question;22. 22.In terms of evaluating mutually exclusive projects, the;internal rate of return (IRR) method mistakenly favors investment proposals;with: (Points: 2);Short useful lives.;Long useful lives.;Moderate cash flow returns.;Large residual values.;Question;23. 23.To make a decision whether to accept or reject a special;sales order, managers need critical information about all the following;except: (Points: 2);Relevant costs.;Prior period operating;costs.;Any opportunity costs.;The strategic, competitive environment of the firm.;Question;24. 24.In deciding between alternative choices for a given;situation, managers usually employ a five-step process. Which of the;following is not a step in the decision-making process? (Points: 2);Evaluate performance.;Specify the criteria and identify the alternative actions.;Select and implement the best course of action.;Perform relevant and strategic cost analysis.;Review the audit report.;Question;25. 25.Research has shown that in framing capital investment;decisions, sunk costs tend to: (Points: 2);Have no discernible impact on decisions by managers.;Have a slight impact on the decision-making process.;Have an impact only when capital funds are limited.;Escalate commitment in;making capital budgeting decisions.;Question;26. 26.Which of the following statements regarding;opportunity costs" is TRUE? (Points: 2);These costs are recorded routinely by cost accounting systems.;These costs relate to;the benefit lost or foregone when a chosen option (course of action);precludes the benefits from an alternative option.;These costs are generally deductible for federal income tax purposes.;In terms of most short-run decisions, they are irrelevant.;Question;27. 27.Pique Corporation wants to purchase a new machine for;$300,000. Management predicts that the machine can produce sales of;$200,000 each year for the next 5 years. Expenses are expected to include;direct materials, direct labor, and factory overhead (excluding;depreciation) totaling $80,000 per year. The firm uses straight-line;depreciation with no residual value for all depreciable assets. Pique's;combined income tax rate is 40%. Management requires a minimum after-tax;rate of return of 10% on all investments.;What;is the paybackperiod;for the new machine (rounded to nearest one-tenth of a year)? (Assume that;the cash inflows occur evenly throughout the year.) (Points: 2);2.5 years.;2.7 years.;3.1 years.;3.6 years.;Question;28. 28.Pique Corporation wants to purchase a new machine for;$300,000. Management predicts that the machine can produce sales of;$200,000 each year for the next 5 years. Expenses are expected to include;direct materials, direct labor, and factory overhead (excluding;depreciation) totaling $80,000 per year. The firm uses straight-line;depreciation with no residual value for all depreciable assets. Pique's;combined income tax rate is 40%. Management requires a minimum after-tax;rate of return of 10% on all investments.;What is the present value payback period, rounded to one-tenth of a year?;(Points: 2);2.5 years.;3.0 years.;3.3 years.;3.6 years.;4.0 years.;Question;29. 29.The goals of coordinating manufacturing processes, reducing;the amount of inventory, and improving overall productivity is particularly;important in a: (Points: 2);Standard cost system.;Just-in-time system.;Normal costing system.;Activity based costing system.;Total quality management system.;Question;30. 30.A flexible-budget variance measures the impact on short-term;operating profit of: (Points: 2);Changes in sales volume.;Changes in output during the period.;Differences in sales mix?budgeted versus actual.;Selling price and cost;differences?actual versus budgeted.;Selling price, but not cost differences?actual versus budgeted.;Question;31. 31.The theory of constraints (TOC) emphasizes which of the;following? (Points: 2);Developing competitive;constraints.;Finding and eliminating design constraints.;Removing bottlenecks from the production process.;Improving overall production efficiency.;Question;32. 32.Which of the following benefits is not typically associated;with a move to a just-in-time (JIT) manufacturing system? (Points: 2);Raw materials are delivered as close as possible to time of production.;Existence of long-term contracts with selected suppliers.;Reduction in employee;training and education costs.;Decreases in manufacturing lead time.;Improved customer-response time (CRT).;Question;33. 33.The difference between total variable overhead cost incurred;and the standard variable overhead cost based on the actual quantity of the;cost driver used to apply variable overhead is the: (Points: 2);Total variable overhead variance.;Variable overhead;spending variance.;Variable overhead rate variance.;Variable overhead efficiency variance.;Variable overhead flexible-budget variance.;Question;34. 34.In September, Larson Inc. sold 40,000 units of its only;product for $240,000 and incurred a total cost of $225,000, of which;$25,000 is fixed costs. The flexible budget for September showed total;sales of $300,000. Among variances of the period were: total variable cost;flexible-budget variance, $8,000U, total flexible-budget variance;$63,000U, and, sales volume variance, in terms of contribution margin;$27,000U;The actual amount of operating income earned in September was: (Points: 2);$15,000.;$40,000.;$63,000.;$78,000.;$105,000.;Question;35. 35.Bonehead Co. has the following factory overhead costs;Standard Overhead Applied to this Period?s;Production;= $72,500;Flexible Budget for Overhead Based on Output (Units Produced);= 65,000;Total Budgeted Overhead in the Master (Static);Budget;= 86,000;Actual Total Overhead Cost Incurred During the;Period;= 76,000;The total underapplied or overapplied factory overhead for Bonehead Co. for;the period is: (Points: 2);$4,000 underapplied.;$7,000 overapplied.;$10,000 overapplied.;$11,000 underapplied.;$14,000 underapplied.;Question;36. 36.SBU is the acronym for: (Points: 2);Small Business Unit.;Sustainable Business Unit.;Standard Business Unit.;Strategic Business Unit.;Question;37. 37.Of the three basic forms of management compensation (salary;bonus, benefits), the fastest growing part of total compensation is: (Points;2);Salary.;Bonus.;Benefits.;Salary and bonus.;Question;38. 38.The evaluation by upper-level managers of the performance of;mid-level managers is: (Points: 2);Performance evaluation.;Operational control.;Goal congruence.;Principal-agent model.;Management control.;Question;39. 39.The most important objective of a strategic performance;measurement system is: (Points: 2);Budgeting.;Motivation.;Authority.;Variances.;Pricing.;Question;40. 40.A unit of an organization is referred to as a profit center;if it has: (Points: 2);Authority to make;decisions affecting the major determinants of profit, including the power to;choose its markets and sources of supply.;Authority to make decisions affecting the major determinants of profit;including the power to choose its markets and sources of supply and;significant control over the amount of invested capital.;Authority to make decisions over the most significant costs of operations;including the power to choose the sources of supply.;Authority to provide specialized support to other units within the;organization.;Responsibility for combining material, labor, and other factors of production;into a final output.;Question;41. 41.The need for coordination between the production and the;selling function will impact the choice of: (Points: 2);Profit, cost or revenue;center.;Manager for the firm.;Formal or informal control systems.;Profitability goal for the firm.;Control measures to prevent fraud.;Question;42. 42.Salary is: (Points: 2);A fixed payment that includes a bonus.;A fixed payment that includes benefits.;A benefit that includes a bonus.;A fixed payment.;Question;43. 43.A method for determining a bonus based upon the performance;of the unit is a(n): (Points: 2);Segment-based pool.;Unit-based pool.;Firm-based pool.;Activity-based pool.;Function-based pool.;Question;44. 44.Which one of the following has been the most common payment;option for bonus compensation in recent years? (Points: 2);Vacation time.;Stock options.;Increased benefits.;Salary increase.;Question;45. 45.EVA is calculated as: (Points: 2);EVA Net Income - (Cost;of Capital x EVA Invested Capital).;Total Net Income - (Cost of Capital x Invested Capital).;Gross Income - Cost of Capital.;Total Net Income - EVA Net Income.;Accounting earnings adjusted for EVA.;Question;46. 46.The receivables turnover ratio is a measure of: (Points: 2);Asset value.;Leverage.;Sales performance.;Profitability.;Liquidity.;Question;47. 47.The objectives of management compensation, when compared to;the objectives used to develop performance measurement systems, are;(Points: 2);More numerous.;Less specific.;Consistent in their;objectives.;Significantly broader in scope.;More specific.;Question;48. 48.During October, Rover Industries produced 35,000 units of;product with costs as follows;DM;= $ 84,000;DL;= 43,000;Variable O/H = 13,000;Fixed O/H = 147,000;Total =$ 287,000;What is Rover's unit cost for October, calculated on the variable costing;basis? (Points: 2);$3.25.;$3.75.;$4.00.;$4.50.;$5.00.;Question;49. 49.The King Mattress Company had the following operating;results for 2012-2013. In addition, the company paid dividends in both 2012;and 2013 of $60,000 per year and made capital expenditures in both years of;$30,000 per year. The company's stock price in 2012 was $8 and $7 in 2013.;The industry average earnings multiple for the mattress industry was 9 in;2013 and the free cash flow and sales multiples were 18 and 1.5;respectively. The company is publicly owned and has 1,200,000 shares of;outstanding stock at the end of 2013.Balance Sheet, December 312013;2012;Cash;$;340,000;$ 100,000;Accounts;Receivable;350,000;400,000;Inventory;250,000;300,000;Total Current Assets;$;940,000;$ 800,000;Long Lived;Assets;1,080,000;1,100,000;Total Assets;$;2,020,000 $ 1,900,000;Current;Liabilities;$;200,000;$ 300,000;Long-Term;Liabilities;600,000;500,000;Stockholder?s;Equity;1,220,000;1,100,000;Total Liabilities & Equity;$ 2,020,000 $;1,900,000Income Statement for the Year Ended December 31;Sales;$;4,750,000;$ 4,500,000;Cost of;Sales;4,100,000;4,000,000;Gross;Margin;$ 650,000;$ 500,000;Operating;Expenses;350,000 400,000;Operating;Income;$;300,000;$ 100,000;Taxes;120,000;40,000;Net;Income;$;180,000;$ 60,000 Cash Flow from Operations;Net;Income;$;180,000;$ 60,000;Plus Depreciation;Expense;50,000;50,000;+Decrease (-Inc) in A/T and Inventory;100,000;- 0 -;+Increase (-Dec) in Current Liabilities;(100,000) -;0 ?;Cash Flow from;Operations;$;230,000;$ 110,000;The current ratio for 2013 is: (Points: 2);1.8;2.0;3.9;4.7;Question;50. 50.The King Mattress Company had the following operating;results for 2012-2013. In addition, the company paid dividends in both 2012;and 2013 of $60,000 per year and made capital expenditures in both years of;$30,000 per year. The company's stock price in 2012 was $8 and $7 in 2013.;The industry average earnings multiple for the mattress industry was 9 in;2013 and the free cash flow and sales multiples were 18 and 1.5;respectively. The company is publicly owned and has 1,200,000 shares of;outstanding stock at the end of 2013.Balance Sheet, December 312013;2012;Cash;$;340,000;$ 100,000;Accounts;Receivable;350,000;400,000;Inventory;250,000;300,000;Total Current;Assets;$;940,000;$ 800,000;Long Lived;Assets;1,080,000;1,100,000;Total;Assets;$ 2,020,000 $;1,900,000;Current Liabilities;$;200,000;$ 300,000;Long-Term;Liabilities;600,000;500,000;Stockholder?s;Equity;1,220,000;1,100,000;Total Liabilities & Equity;$ 2,020,000 $;1,900,000Income Statement for the Year Ended December 31;Sales;$;4,750,000;$ 4,500,000;Cost of;Sales;4,100,000;4,000,000;Gross;Margin;$ 650,000;$ 500,000;Operating;Expenses;350,000 400,000;Operating Income;$;300,000;$ 100,000;Taxes;120,000;40,000;Net;Income;$ 180,000;$;60,000 Cash Flow from Operations;Net;Income;$;180,000;$ 60,000;Plus Depreciation;Expense;50,000;50,000;+Decrease (-Inc) in A/T and Inventory;100,000;- 0 -;+Increase (-Dec) in Current Liabilities;(100,000) -;0 ?;Cash Flow from;Operations;$;230,000;$ 110,000;The inventory turnover ratio for 2013 is (rounded): (Points: 2);11.2;12.7;13.7;14.9

 

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