Question;GB519: Measurement and Decision Making (Mid-term);1.Which one of the following;would not be found in a merchandising company? (Points: 2);Beginning;inventory. Cost of goods;sold. Ending;inventory. Gross profit. Work-in-process.;2.Which one of the following;critical success customer factors is best measured by warranty expense?;(Points: 2);Quality. Dealer and;distributor efficiency and effectiveness. Timeliness of;delivery. Customer;satisfaction.;3.Which one of the following is;not a type of cost driver? (Points: 2);Structural;cost driver. Executional;cost driver. Volume-Based;cost driver. Differential;cost driver. Activity-Based;cost driver.;4.In the current business;environment, companies cannot survive without a long-term strategy. What;exactly should an effective strategy include? (Points: 2);A set of;policies, procedures, and approaches to business that will result in;long-term success. A focus on;accurate financial data, thus allowing the firm to effectively compete in any;environment. A focus on;long-term nonfinancial information that will provide the company with;versatile management techniques capable of being used in a wide variety of;situations. A clear;concise mission statement, naming every product and outlining the company's;long-term goals of success.;5.With the enactment of the;Sarbanes-Oxley Act of 2002, all public companies are now required by the;SEC to disclose whether or not the company has: (Points: 2);An audit;committee. Human;resources guidelines. A code of;ethics. A management;compensation plan.;6.Which of the following;organizations presents awards to firms that excel at execution of strategy;based on criteria such as leadership, marketing, strategic planning and;process management? (Points: 2);International;Organization for Standardization. Malcolm;Baldrige National Quality Program. Global;Reporting Initiative. World;Resources Institute. American;Institute of Certified Public Accountants.;7.The additional cost incurred;as the cost driver increases by one unit is: (Points: 2);Average cost. Controllable;cost. Variable;cost. Unit cost.;8.The cause and effect;relationships among critical success factors are best captured in: (Points;2);The balanced;scorecard Business intelligence The value;chain The strategy;map SWOT analysis;9.After critical success;factors (CSFs) have been identified, the next step in developing a;competitive strategy is to develop relevant and reliable measures for these;CSFs. These measures are important to help the organization: (Points: 2);Make profit;for any extended period. Increase;sales above previous year(s). Develop;policies to enhance customer profitability. Improve productivity;in selected product areas. Monitor;progress toward achieving strategic goals.;10.Which of the following aspect;of a contemporary management technique is a framework and process that;organizations use to manage the occurrence of possible events that could;negatively or positively affect the company's competitiveness and success?;(Points: 2);Total quality;management Lean;accounting The theory of;constraints Enterprise;sustainability Enterprise;risk management;11.Strategic analysis uses which;of the following to help a firm improve its competitive position through an;analysis of product and production complexity? (Points: 2);Differential;cost drivers. Discretionary;cost drivers. Structural;cost drivers. Marginal cost;drivers.;12.In order to assure that;accounting information is accurate and to avoid potentially costly mistakes;in the decision making process, firms should: (Points: 2);Design and;monitor an effective system of internal accounting controls. Have the;internal auditors and controller each check the accounting data before it is;released to management. Purchase an;accounting system that is designed specifically for the industry in which the;firm conducts business. Develop and;implement a code of ethics.;13.When cost relationships are;linear, total variable costs will vary in proportion to changes in: (Points;2);Direct labor;hours. Total;material cost. Total;overhead cost. Volume of;production. Machine;hours.;14.JCH Company conducts business;in the lumber and building products industry. Last week, JCH purchased 50;railcars of lumber from a mill in Oregon and sold all 50 to a Home Depot;store in North Carolina. In this instance, JCH Company would most likely be;classified as a: (Points: 2);Manufacturer. Retailer. Warehouse. Wholesaler.;15.A manager of a small;manufacturing firm is interested in knowing what the company's product;costs are. Which of the following would be considered a product cost for;the manager's company? (Points: 2);Direct;materials. Product;design cost. Office;expenses. Selling;expenses. Advertising;expense.;16.The sum of units transferred;out and ending inventory units, assuming no spoilage, determines the;(Points: 2);Units;completed during the period. Units;spoiled. Units;transferred in during the period. Units;accounted for.;17.For job costing in service;industries, overhead costs are usually applied to jobs based on: (Points;2);Factory;overhead. Indirect;labor. Indirect;materials. Direct;labor-hours or dollars. Direct;materials.;18.In a process costing system;the cost of abnormal spoilage should be: (Points: 2);Prorated;between units transferred out and ending inventory. Included in;the cost of units transferred out. Treated as a;loss in the period incurred. Ignored in;the period incurred.;19.Customer equity is a type of;analysis used to: (Points: 2);Assess the ethical;practices of each salesperson-customer relationship. Assess the;current profit potential of a customer. Assess the;long term profit potential of a customer. Assess the;current profit potential of all the firm's customers. Assess the;long term profit potential of all the firm's customers.;20.The major limitation of;volume-based costing systems is the use of volume-based: (Points: 2);Criteria. Standards. Rates. Variances. Restrictions.;21.The three major differences;between process and job order costing systems are those relating to;(Points: 2);Quantity;quality, and cost. Speed;accuracy, and design. Cost object;product or service variety, and timing of unit cost calculation. Responsibility;for cost, system design, and authorization codes.;22.Multistage ABC is used when;(Points: 2);There are;many departments in the organization. Management;wants a higher level of accuracy from the ABC calculations. There are;complex relationships among the activities. To simplify;the ABC calculations. There is no;such thing as Multistage ABC.;23.The journal entry to record;incurred direct labor would include a credit to: (Points: 2);Work-in-Process;Inventory. Accrued;Payroll. Factory;Overhead. Materials;Inventory. Finished;Goods Inventory.;24.A time ticket: (Points: 2);Shows the;time an employee worked on each job, pay rate, and total cost chargeable to;each job. Shows the;time that a department's employees worked on all jobs, the pay rate of each;employee, and the total cost chargeable to each job. Shows the;time an employee worked on each job and the total cost chargeable to each job;only. Shows the;time an employee worked on each job only.;25.Which method is a method used;to prepare the departmental production cost report when using a process;cost system? (Points: 2);LIFO method. FIFO method. Weighted;production method. Production;average method. Throughput;average method;26.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. Units to account;for.;27.Which of the following;characteristics applies to process costing but not to job costing? (Points;2);Identifiable;batches of production. Average;costs. Equivalent;units. Application;of overhead.;28.Freight charges based on;number of units shipped to customers is a: (Points: 2);Customer;unit-level cost. Customer;batch-level cost. Customer-sustaining;cost. Distribution-channel;cost. Sales-level;cost.;29.Under conventional job;costing, factory overhead costs are assigned to products or services using;labor or machine hours which are: (Points: 2);Multiple cost;pools. A homogeneous;cost pool. Volume-based;cost drivers. Nonvolume-based;cost drivers only.;30.Roussey Co. had the following;information for the month of June;Work-in-Progress;Inventory ? 6/1;2,000 Units;Units;Transferred In;10,000 Units;Work-in-Progress;Inventory ? 6/30;3,000 Units;Beginning;work-in-process inventory is 30 percent complete as to conversion. Ending;work-in-process inventory is 40 percent complete as to conversion.;Materials are added at the end of the process.;How many units were completed in June? (Points: 2);12,000. 10,000. 9,600. 9,000.;31.Assume only the specified;parameters change in a sensitivity analysis. If the contribution margin;increases by $2 per unit, then operating profits will: (Points: 2);Also increase;by $2 per unit. Increase by;less than $2 per unit. Decrease by;$2 per unit. Increases;but by an indeterminate amount.;32.Which one the following is a;variable that takes on values of 1, 2, 3,? for each period in sequence?;(Points: 2);Dummy;variable. Outlier. Trend;variable. Dependent;variable. Independent;variable.;33.A plan that states the units;or costs of merchandise to be purchased by a retailer or wholesaler during;the budget period is called a: (Points: 2);Production;budget. Merchandise;purchases budget. Accounts;payable budget. Cash payments;budget. Cost of goods;sold budget.;34.Becker Sofa Company expected;to sell 12,000 leather sofas. Fixed costs were $8,400,000, unit sales price;was $4,600, and unit variable costs were $2,200. Becker Sofa Company's;margin of safety ratio is calculated to be: (Points: 2);71.29%. 77.98%. 70.83%. 79.27%. 73.35%.;35.A plan of dollar amounts to;be spent on long-term projects is called a: (Points: 2);Cash budget. Capital;budget. Rolling;budget. Sales budget. Rolling;financial forecast.;36.Framing House, Inc. produces;and sells picture frames. Variable costs are $17 per frame, and fixed costs;for the year total $130,000. The selling price is $25 per frame. The sales;units required to make an after-tax profit of $10,000, given an income tax;rate of 20 percent, are calculated to be (round up to nearest whole unit;(Points: 2);17,734 units. 16,583 units. 17,813 units. 17,049 units. 16,366 units.;37.Fresplanade Co. had the;following historical pattern for its credit sales;75% collected in the month of sale;12% collected in the first month after sale;8% collected in the second month after sale;3% collected in the third month after sale;2% uncollectible;The sales on open account (credit sales) have been budgeted for the last;six months of the year as shown below;July $72,000;August $84,000;September $96,000;October $108,000;November $120,000;December $102,000;The estimated cash collection during September from July, August, and;September accounts receivable is: (Points: 2);$83,160. $79,380. $87,840. $54,000. $71,640.;38.Which of the following;factors is not involved in studying cost/volume/profit relationships?;(Points: 2);Desired;profit. Variable;costs. Fixed costs. Product mix. Actual sales.;39.Which of the following is not;a potential benefit of having a sound budgeting process? (Points: 2);Improved;decision-making. Improved;performance-evaluation process. Improved;coordination of business activities. Improved;motivation for company employees. Lower;acceptance rate for capital budgeting projects.;40.Which of the following best;describes the process of sales forecasting? (Points: 2);Multiple;sales forecasting tools are available. Trend;analysis cannot be used for sales forecasting. Econometric;models cannot be used for sales forecasting because of their inherent;complexity. Sales;forecasting works best with a simple visual plotting of past data on a graph.;41.Which of the following is not;used for evaluating a regression analysis? (Points: 2);Correlation. t-value. R-Squared. F value Multicollinearity.;42.The p-value measures: (Points;2);The;probability that the regression equation is reliable. The;statistical significance of the dependent variable. The risk that;a particular independent variable has only a chance relationship to the;dependent variable. The;confidence range around the regression prediction.;43.Which one of the following is;defined as the ratio of the contribution margin to profit? (Points: 2);Contribution;margin ratio. Margin of;safety ratio. Operating;leverage. Breakeven;point. Margin of;safety.;44.The process of examining how;a change in a single item in a budget (e.g., sales volume) affects one or;more items in the budget (e.g., budgeted sales revenue and budgeted;operating income) is generally referred to as: (Points: 2);Flexible;budgeting. Sensitivity;analysis. Uncertainty;programming. What-if;analysis. Activity-based;budgeting (ABB).;45.ACEM Hardware purchased 5,000;gallons of paint in March. The store had 1,500 gallons on hand at the;beginning of March, and expects to have 1,000 gallons on hand at the end of;March. What is the budgeted number of gallons to be sold during March?;(Points: 2);3,500. 4,500. 5,000. 5,500. 7,500.;46.All of the following are ways;of setting the budget, except: (Points: 2);Negotiation-based;budgeting. Two-stage;budgeting. Participative;budgeting. Authoritative;budgeting. All of the;above are ways of setting the budget.;47.Which of the four types of;cost drivers - activity-based, volume-based, structural and executional -;are often best related to linear cost estimation methods? (Points: 2);Activity-based;only. Activity-based;and volume-based. Structural;and volume-based. Executional;and volume-based. Structural;and executional.;48.The equation method and the;contribution margin method: (Points: 2);Can determine;the breakeven point in units sold but not in sales dollars. Can determine;the breakeven point in sales dollars but not in units sold. Cannot;determine the breakeven point in units sold. Cannot;determine the breakeven point in sales dollars. Can determine;the breakeven point in units sold or sales dollars.;49.Which of the following;budgets is not a financial budget? (Points: 2);Sales budget. Cash receipts;budget. Budgeted;cash-flow statement. Budgeted;balance sheet. Cash payments;budget.;50.OutlyTech Corp. expected to;sell 24,000 telephone switches. Fixed costs were $12,144,000, unit sales;price was $3,200, and unit variable costs were $1,440. OutlyTech's margin;of safety ratio is: (Points: 2);71.25%. 87.00%. 70.25%. 92.50%. 76.15%.
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