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saint mba560 module 7 quiz




Question;Question 1.;1.;All of the following statements describe qualities of the relevance of information except;(Points: 2);relevant information is future oriented.relevant information differs between the alternatives.relevance of information requires a high degree of precision.relevant information includes qualitative as well as quantitative data.;Question 2.;2.;Andy is trying to decide which one of two job offers he will accept. Several items are presented below: Job CriterionJob Offer AJob Offer B(1) Base salary $50,000$50,000(2) Overtime compensation Comp. timeHourly rate(3) Moving allowance $ 3,000$ 3,000(4) Signing bonus $ 2,000$ 0(5) Job search costs already incurred $ 300$ 500 Select the job criterion that are relevant to Andy's decision.;(Points: 2);(1), (2), (3), (4), (5)(2), (3), (4)(1), (3), (5)(2), (4);Question 3.;3.;Centennial Tours is trying to decide which one of two tours;it will introduce. The costs and revenues associated with each;alternative are listed below:Tour ATour BProjected revenue $7,000$11,000Variable costs 1,000 6,000Fixed costs 3,000 3,000Profit$3,000$1,000 What are the incremental (differential) costs of Tour B?;(Points: 2);$2,000$3,000$4,000$5,000;Question 4.;4.;Dalton Company is trying to decide between the following two alternatives:Alternative AAlternative BProjected revenue $50,000$60,000Direct material 6,000 12,000Assembly labor 9,000 9,000Production supervisor's salary 10,000 10,000Facility-related costs 10,000 15,000Profit$15,000$14,000 Which of the following conclusions can be drawn from this example?;(Points: 2);Variable costs are always relevant for decision making.Fixed costs are sunk and thus are never relevant for decision making.Relevant costs may include variable costs and fixed costs.The amount of revenue is not relevant to this decision.;Question 5.;5.;Select the incorrect statement regarding relevant revenues.;(Points: 2);Relevant revenues differ between the alternatives being considered.Past or future revenues may be relevant.Relevant revenues must make a difference in the decision under consideration.Relevant revenues are identified in the same way as relevant costs.;Question 6.;6.;Long Island Company is trying to decide which one of two;alternatives it will accept. The costs and revenues associated with each;alternative are listed below:Alternative 1Alternative 2Projected revenue $125,000$150,000Unit-level costs 25,00036,000Batch-level costs 12,50024,000Product-level costs 15,00017,000Facility-level costs 10,00012,500 What is the differential revenue for this decision?;(Points: 2);$25,000$50,000$125,000$150,000;Question 7.;7.;Home Safety Products currently outsources an electrical;switch that is a component in its sprinkler systems. The switches are;purchased for $12 each. The company is considering making the switches;internally and has conducted a study to determine what the cost would;be. Below are projected annual costs:Unit-level costs$ 8Batch-level costs per year$15,000Product-level costs per year$10,000Allocated facility-level costs$20,000The;company needs 10,000 of the switches each year. If Home Safety decides;to make the parts under these conditions, the relevant cost per unit;will be;(Points: 2);$8$9.50$10.50$12.50;Question 8.;8.;Frank is trying to decide which one of two job offers he will accept. Several items are presented below: Job CriterionJob Offer AJob Offer B(1) Base salary $40,000$40,000(2) Overtime compensation Comp. timeHourly rate(3) Moving allowance $ 2,000$ 2,000(4) Signing bonus $ 1,000$ 0(5) Job search costs $ 500$ 500Which of the above job criterion would be considered sunk costs?;(Points: 2);(1), (3), (5)(2), (4)(5)None of the above;Question 9.;9.;Which of the following costs generally is an example of a batch-level cost?;(Points: 2);Assembly setup costsMaterials handling costsShipping and handling costs to ship an order to a customerAll of the above;Question 10.;10.;Which of the following costs generally is an example of a product-level cost?;(Points: 2);Inventory holding costsMachine setup costsMaterials and labor costsShipping and handling costs;Question 11.;11.;Budgeted depreciation expense would not appear on a;(Points: 2);cash budget.budgeted income statement.selling and administrative expense budget.all of the above.;Question 12.;12.;Select the incorrect statement about budget committees.;(Points: 2);Budgeting committees usually have responsibility for the coordination of budgeting activities.Membership on the budgeting committee is restricted most often to accountants because the budget involves numbers.The budgeting committee is responsible for settling disputes between various departments over budget matters.One;of the responsibilities of the budget committee is to monitor the;organization's progress toward achieving its budget standards.;Question 13.;13.;With regards to financial statements, ?pro forma? means;(Points: 2);budgeted.prepared in condition or position that can be expected if planning assumptions prove correct.all of the above.;Question 14.;14.;Select the incorrect statement.;(Points: 2);Four purposes often claimed for budgeting involve planning, coordination, performance measurement, and corrective action.In a participative budgeting system, budget information flows in one direction only, from bottom to top.The three major categories of the master budget are operating budgets, capital budgets, and pro forma financial statements.The accounting department normally does not coordinate the effort to establish the sales forecast.;Question 15.;15.;Maddon Company estimated that its inventory purchases for;January and February 2010 would be $300,000 and $370,000, respectively.;The company generally pays for 60% of its inventory purchases in the;month of purchase because it receives a 2% discount for timely payment.;The remaining 40% of purchases are paid for in the following month, and;there is no discount for these payments. What will be the amount of cash;payments for inventory in February 2010?;(Points: 2);$324,400$337,560$328,340$335,160;Question 16.;16.;Which of the following items will notappear on a cash budget?;(Points: 2);Expected cash paymentsBudgeted sales on accountExpected cash collectionsAll of the above will appear on a cash budget;Question 17.;17.;The budgeting process that involves adding a month to the end;of the budget period at the end of each month, thus maintaining a;twelve-month planning horizon, is referred to as;(Points: 2);participative budgeting.continuous budgeting.;Question 18.;18.;Which of the following is not a budgeted financial statement?;(Points: 2);Pro forma cash flow statementPro forma balance sheetPurchases budgetPro forma income statement;Question 19.;19.;Which of the following budgets or schedules uses data contained in the selling and administrative expense budget?;(Points: 2);Cash payments scheduleCash receipts scheduleInventory purchases budgetSales budget;Question 20.;20.;McDavid Company has completed its sales budget for the first;quarter of 2010. Projected credit sales for the first four months of the;year are shown below:January $30,000February $36,000March $45,000April $48,000The;company's past records show collection of credit sales as follows: 30%;in the month of sale and the balance in the following month. The total;cash collection from receivables in February is expected to be;(Points: 2);$38,700$45,000$42,300$31,800


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