1. Phuket Industries is considering renting machine Y to replace machine X. It is expected that Y will waste less direct materials than X. If Y is rented, X will be sold on the open market. For this decision which of the following factors is are relevant: i. Cost of direct materials used ii. Resale value of machine X a. Only i b. Only ii c. Both i and ii d. Neither i nor ii 2. When there is a production constraint, a company should emphasize the products with: a. The highest unit contribution margins. b. The highest contribution margin ratios. c. The highest unit contribution margins and contribution margin ratios. d. The highest contribution margin per unit of the constrained resource. 3. Managers have greater confidence in the accuracy of costs of products and reported by activity-based systems because? a. Activity-based systems are more expensive. b. Activity-based systems are more complex. c. Activity-based systems classify more costs as direct. d. All of the above 4. Which of the following is not a benefit of budgeting? a. It reduces the need for tracking actual cost activity. b. It sets benchmark for evaluating performance c. It uncovers potential bottlenecks d. It formalizes a manager's planning efforts 5. Which of the following represents a normal sequence in which the indicated budgets are prepared: a. Production, Sales, Direct Materials b. Production, Direct Materials, Direct labour c. Direct Labour, Direct Materials, Sales d. Cash, Direct Materials, Direct Labour