1) Absorption costing is similar to variable costing in that a) All manufacturing costs are absorbed into the inventory value. b) Both are in compliance with GAAP. c) Manufacturing overhead is viewed as part of the product cost for both methods. d) Both methods are specific ways of tracking the cost of a product. 2) Under absorption costing, if direct materials are $20,000, direct labor is $15,000, variable manufacturing overhead is $50,000, and fixed manufacturing overhead is $8,000, the total cost of goods manufactured is: a) $ b) $ 85,000 93,000 35,000 70,000 d) $ 3) Which of the following is not a component to Total Cash Excess (Deficit)? a) Credit collections for sales b) Cash collected immediately when the sale is made c) Cash payments out d) Credit sales 4) The capital expenditures budget is separate from the operating expenses budget because a) Capital expenditures are budgeted as revenues instead of expenses. b) Capital expenditures are budgeted as noncurrent assets instead of expenses. c) Capital expenditures increase the contribution margin. d) Capital expenditures decrease the contribution margin. 5) If 80% of August sales should be inventory stock before August begins, and the forecasted units sold for August are 15000 units, calculate the required ending inventory for July. 8,000 15,000 12,000 20,000 6) The difference in variable analysis for a service company compared to a manufacturing company is that: a) Price variance is not applicable to a service company. b) Efficiency variance is not applicable to a service company. c) Manufacturing companies have no variable overhead costs. d) There are no materials used in production in a service company. 7) Flexible budgeting uses: a) Budgeted price per unit, budgeted cost per unit, and actual volume. b) Budgeted price per unit, actual cost per unit, and actual volume. c) Budgeted price per unit, budgeted cost per unit, and budgeted volume. d) Actual price per unit, actual cost per unit, and budgeted volume. 8) James has a company that uses one machine that can make 2 different products. He needs to know which product will provide the greatest profit. What type of decision does he face? a) Product mix decision b) Accept or reject a special order c) Keep or drop decision d) Make or buy decision 9) Kenny makes generic widgets. A customer would like 10 custom widgets with custom paint and design. Kenny has not agreed to this proposal yet. What type of decision is this? a) Product mix decision b) Accept or reject a special order c) Keep or drop decision d) Make or buy decision B 10) A sunk cost is: a) the difference in costs between two alternatives b) a cost that has been incurred and can not be recovered c) the next best alternative foregone d) a relevant cost 11) Which of the following is an example of a leading indicator? a) Operating profit b) Revenue growth c) Production levels d) Level of customer satisfaction 12) The difference between a goal and an objective is: a) Goals address vision statements, where objectives address mission statements. b) A goal is a long-term outcome, where an objective is a short-time outcome. c) Agoal is a short-term outcome, where an objective is a long-time outcome. d) Goals address mission statements, where objectives address vision statements. 13) Which of the following statements is true? a) A current ratio of 0.1 is considered good b) The higher the Days Sales Outstanding number, the better c) The higher the Days Sales in Inventory ratio, the better d) The lower the Days Sales in Inventory ratio, the better 14) Because financial statements do not immediately provide answers to readers' questions, it is necessary to perform a/an: a) objective analysis b) financial analysis c) subjective analysis d) periodic analysis 15) Last year, Duehl Inc. had a quick ratio of 4.0 and this year they have a quick ratio of 3.0. In which year did Duehl have a more desirable quick ratio? a) This year because the quick ratio is lower b) It cannot be determined because quick ratios are too variable c) Last year because the quick ratio was higher d) None of the choices