1 Discuss the three major influences on pricing decisions.

1) The three major influences on pricing decisions are: costs, competitors, and customers.

TRUE FALSE

2) The three major influences on pricing decisions are

A) competition, costs, and customers.

B) competition, demand, and production efficiency.

C) continuous improvement, customer satisfaction, and a dual internal/external focus.

D) variable costs, fixed costs, and mixed costs.

E) economic, qualitative, and costs.

3) Pricing for one-time-only special orders is, typically

A) a pricing decision using the time horizon.

B) a short-run decision.

C) a long-run decision.

D) higher in variable costs than usual.

E) based on fixed costs alone.

4) Target pricing is based on

A) engineered cost.

B) variable manufacturing and nonmanufacturing costs.

C) full product cost.

D) what customers are willing to pay.

E) full manufacturing cost.

Chapter 13 Strategy, Balanced Scorecard, and Profitability Analysis

1 Explain how the relative strength of competitive forces help managers identify strategic alternatives.

5) Strategies have been classified in many different ways, but what is common is to set the business within its external environment.

TRUE FALSE

6) ________ has/have been classified in many ways, but what is common is to set the business within its external environment.

A) Strategies

B) Planning

C) Competitors

D) Bargaining power of input suppliers

E) Cost Leadership

7) Which of the following is NOT a force that shapes an organization's competitive environment?

A) competitors

B) equivalent products

C) bargaining power of customers

D) government regulation

E) potential entrants into the market

Chapter 14 Period Cost Allocation

1 Understand the four purposes for period cost allocation and the four criteria to justify the method chosen to allocate the non-manufacturing period costs.

8) The allocation of one particular cost must satisfy all four justifications of cost allocation.

TRUE FALSE

9) Indirect costs typically constitute a large percentage of the costs assigned to cost objects.

TRUE FALSE

10) Full product costing requires the recovery of all costs generated by all business functions in the value chain.

TRUE FALSE

11) The costs of designing and implementing sophisticated cost allocation systems are usually not very visible.

TRUE FALSE

Chapter 15 Cost Allocation: Joint Products and Byproducts

1 Distinguish among different types of saleable products, scrap and toxic waste.

12) Joint costs are incurred beyond the splitoff point and are assignable to individual products.

TRUE FALSE

13) A byproduct has a minimal sales value.

TRUE FALSE

14) Scrap frequently has a zero sales value.

TRUE FALSE

Chapter 15 Cost Allocation: Joint Products and Byproducts

1 Distinguish among different types of saleable products, scrap and toxic waste.

15) Joint costs are incurred beyond the splitoff point and are assignable to individual products.

TRUE FALSE

16) A byproduct has a minimal sales value.

TRUE FALSE

17) Scrap frequently has a zero sales value.

TRUE FALSE

Chapter 16 Revenue and Customer Profitability Analysis

1 Select a method and allocate revenue from a product bundle to its distinct components.

18) Revenue allocation occurs where revenues can be identified with an individual product (service, customer, and so on) in an economically feasible (cost-effective) way.

TRUE FALSE

19) Revenue tracing results in a more accurate assignment of revenues to products, than does revenue allocation.

TRUE FALSE

20) A bundled product is a package of two or more products or services, sold for a single price, where the individual components of the bundle may also be sold as separate items, each with their own stand-alone prices.

TRUE FALSE

Chapter 17 Process Costing

1 Distinguish process- from job-costing allocation methods within the decision framework, and apply the weighted-average method of inventory valuation when the beginning work-in-process inventory is zero.

21) The primary difference between job costing and process costing is the extent of averaging used to compute unit costs of products or services.

TRUE FALSE

22) Standard costing can be used in process costing systems.

TRUE FALSE

23) Operating personnel must be able to estimate the percentage of work-in-process completed in process costing.

TRUE FALSE

Chapter 18 Spoilage, Rework, and Scrap

1 Distinguish among spoilage, rework, and scrap, and apply the appropriate methods to account for normal and abnormal spoilage.

24) Scrap products may be reprocessed and subsequently sold as a finished good.

TRUE FALSE

25) The costs of abnormal spoilage are written off as a loss; however, the costs of normal spoilage are treated as part of cost of goods manufactured.

TRUE FALSE

26) Normal spoilage is avoidable and controllable.

TRUE FALSE

Chapter 19 Inventory Cost Management Strategies

1 Evaluate relevant data and decide on the economic order quantity (EOQ).

27) Ordering costs consist of the costs of goods acquired from suppliers including freight and transportation costs.

TRUE FALSE

28) Purchasing costs consist of the costs of preparing and issuing a purchase order.

TRUE FALSE

29) Carrying costs arise when a customer demands a unit of product and that unit is not readily available.

TRUE FALSE

Chapter 20 Capital Budgeting: Methods of Investment Analysis

1 Apply the concept of the time value of money to capital budgeting decisions.

30) In capital budgeting decisions, revenues and costs are analyzed over the short-run.

TRUE FALSE

31) Accrual accounting measures income on a year-to-year basis.

TRUE FALSE

32) Cost systems with an exclusive period-by-period focus are more likely to identify project costs over multiple periods.

TRUE FALSE

Chapter 21 Transfer Pricing and Multinational Management Control Systems

1 Integrate the accounting internal control system assurance framework with existing legislation.

33) A management control system is a means of gathering and using information to aid and coordinate the process of making planning and control decisions throughout the organization, and to guide employee behaviour.

TRUE FALSE

34) Subunit managers are better informed about their suppliers than top management is.

TRUE FALSE

35) A management control system should have all of the following characteristics, EXCEPT

A) it should motivate employees.

B) it should be closely aligned to organizational goals and objectives.

C) it should provide information for individual managers for decision making.

D) it should motivate managers.

E) it should always focus on customer satisfaction.

Chapter 22 Multinational Performance Measurement and Compensation

Use the information below to answer the following question(s).

The top management at Groundsource Company, a manufacturer of lawn and garden equipment, is attempting to recover from a flood, which destroyed some of its accounting records. The main computer system was also severely damaged. The following information was salvaged:

	Tractor Division	Tiller Division	Digger Division
Sales	$10,000,000	(a)	$2,400,000
Net operating income	$1,000,000	$1,440,000	$600,000
Total assets	(b)	(c)	$2,000,000
Return on investment	0.20	0.10	(d)
Return on sales	(e)	0.12	0.25
Investment turnover	(f)	(g)	1.2

36) What were the sales for the Tiller Division?

A) $9,600,000

B) $12,000,000

C) $15,000,000

D) $15,500,000

E) $14,400,000

Explanation: Return on Sales = Net Inc/Sales

37) What is the value of the total assets belonging to the Tractor Division?

A) $3,500,000

B) $4,000,000

C) $4,500,000

D) $5,000,000

E) $2,000,000

Explanation: ROI = Net Income/Assets

38) What is the value of the total assets belonging to the Tiller Division?

A) $10,000,000

B) $12,000,000

C) $14,400,000

D) $15,000,000

E) $16,000,000

Explanation: ROI = Net Income/Assets

Assets = Net Income/ROI

39) What is the Digger Division's return on investment?

A) .25

B) .30

C) .45

D) .60

E) .20

Explanation: ROI = Net Income/Net Assets = Return on Sales Asset Turnover

40) What is the Tractor Division's return on sales?

A) 0.10

B) 0.12

C) 0.15

D) 0.20

E) 0.25