Exam 4-Cost Accounting

Question 1 5 / 5 points

Costs which are not economically feasible to trace but which are related to a cost object are known as:

Question options:

fixed costs.
indirect costs.
direct costs.
variable costs.
Question 2 5 / 5 points

Which cost-allocation criterion is most likely to subsidize poor performers at the expense of the best performers?

Question options:

The benefits-received criterion
The fairness or equity criterion
The cause-and-effect criterion
 
The ability to bear criterion
Question 3 5 / 5 points

Which is the preferred allocation method for performance evaluation?

Question options:

Allocating only human resource cost
Allocating all-corporate costs
Allocating controllable costs
Allocating uncontrollable costs
Question 4 5 / 5 points

Corporate overhead costs can be allocated:

Question options:

All of these answers are correct.
using a single cost pool.
using numerous individual corporate cost pools.
to divisions using one cost pool and then reallocating costs to products using multiple cost pools.
Question 5 5 / 5 points

To improve customer profitability, companies should track:

Question options:

only the final invoice price of a sale .
the volume of the products purchased by each customer.
discounts taken by each customer.
Both B and C.
Question 6 5 / 5 points

Customer revenues and ________ are the determinants of customer profitability

Question options:

customer industry
customer profile
customer location
customer costs
Question 7 5 / 5 points

The cost of the manager of a retail distribution channel would most likely be classified as a:

Question options:

customer batch-level cost.
distribution-channel cost.
corporate-sustaining cost.
customer-sustaining cost.
Question 8 5 / 5 points

ABC systems use the concept of a ________ to identify the cost drivers that best demonstrate the cause-and-effect relationship between each activity and the costs in the related cost pool.

Question options:

cost pool
cost allocation
cost hierarchy
cost driver
Question 9 5 / 5 points

Corporate-sustaining costs should be allocated to:

Question options:

identify the most profitable customers.
evaluate distribution-channel managers.
determine the selling price that will cover all costs.
motivate changes in customer behavior.
Question 10 0 / 5 points

Answer the question using the information below:
Shaghai Tea Products has an exclusive contract with British Distributors. Calamine and Shanghai are two brands of teas that are imported and sold to retail outlets. The following information is provided for the month of March:

Actual Budget

 

Calamine Shanghai Calamine Shanghai
Sales in pounds 3,400 lbs. 3,600 lbs. 4,000 lbs. 3,000 lbs.
Price per pound $2.50 $2.50 $2.00 $3.00
Variable cost per pound 1.00 2.00 1.00 1.50
Contribution margin $1.50 $0.50 $1.00 $1.50

Budgeted and actual fixed corporate-sustaining costs are $1,750 and $2,000, respectively.
What is the actual contribution margin for the month?

Question options:

$7,500
$8,500
$8,800
$6,900
Question 11 5 / 5 points

A capital budget spans only a one-year period.

Question options:

True
False
Question 12 5 / 5 points

The obtain information stage of capital budgeting gathers information from all parts of the value chain to evaluate alternative projects.

Question options:

True
False
Question 13 5 / 5 points

Capital budgeting is the process of making long-run planning decisions for investments in projects.

Question options:

True
False
Question 14 5 / 5 points

The stage of the capital-budgeting process in which projects get underway and performance is monitored is the:

Question options:

identify projects stage.
make predictions stage.
management-control stage.
implement the decision, evaluate performance, and learn stage.
Question 15 5 / 5 points

Net present value is calculated using the:

Question options:

required rate of return.
internal rate of return.
rate of return required by the investment bankers.
None of the above.
Question 16 5 / 5 points

Assume your goal in life is to retire with 2 million dollars. How much would you need to save at the end of each year if investment rates average 9% and you have a 15-year work life?

Question options:

$ 68,118
$ 75,706
$ 82,572
$51,108
Question 17 5 / 5 points

For capital budgeting decisions, the use of the accrual accounting rate of return for evaluating performance is often a stumbling block to the implementation of the:

Question options:

most effective tax strategy.
discounted cash flow method for capital budgeting.
most effective goal-congruence choice.
net cash flow.
Question 18 5 / 5 points

The distant payoffs from R&D investments are:

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more certain than other investments such as new equipment.
equivalent to other investments.
neither better nor worse than other investment.
more uncertain than other investments such as new equipment.
Question 19 5 / 5 points

There is an inconsistency between using the net present value method as best for capital budgeting decisions and then using a different method to evaluate performance.

Question options:

True
False
Question 20 5 / 5 points

CIM is the acronym for:

Question options:

capital investment management.
computer-integrated management.
computer-integrated manufacturing.
capital intensive manufacturing.

 

 
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