1. Salvage value

A. in theory, is equal to the present value of the future cash flows of the asset.

B. Should not be used to justify marginal investments.

C. is the best prediction of what an asset could be sold for at the end of the time horizon.

D. All of the above

E. None of the above.

2. Which of the following methods involves the time value of money?

A. Present value payback

NPV

Both A and B

Payback

None of the above

3. A merchandising firms balance sheet reflects the inventory of:

Raw Materials

Work in process

Finished goods

None of the above

4. Which of the following methods does not require a hurdle rate?

A. PVI

B. NPV

C. IRR

D. none of the above

5. Colly, Inc. pays 20% of the cost of purchases in the month purchased and 60% in the month after and 20% in the month after that, how much cash will be disbursed in the month after a $108,000 purchase.

A. $64,800

B) $21,600

C. $43,200

D. none of the above

6. In calculating the materials price variance which of the followings is used?

A. The actual price

B. The standard price

C. Both A and B

D. Neither A nor B

7. Which of the following companies is in all likelihood, a process coster?

A. A paint manufacturer

B. Chair manufacturer

C. Boat Manufacturer

D. none of the above

8. When calculating the materials quantity variance, which of the following is used?

A. The actual price of materials

B. The standard price for materials

C. Both A and B

D. Neither A nor B

11. If Ezra collects 80% of its credit sales in the month of the sale and 20% in the month after the sale, how much will Ezra collect in March on a $220,000 credit sale in January?

A. $176,000

B. $44,000

C. $88,000

D) none of the above (0% should be left to collect) <--- My choice

12. In calculating the labor rate variance which of the following is used?

A. The actual labor rate

B. The standard labor rate

C. Both A and B

D. None of the above

13. Which of the following methods assumes 0 is the net present value?

A. Payback

B. Discounted payback

C. IRR

D. none of the above

14. As production levels increase the variable cost per unit:

A. increases

B. decreases

C. stays the same

D. none of the above

15. Which of the following is not part of the selling and administrative budget?

A. Selling salaries

B. Administrative salaries

C. Factory supervisor salaries

D. None of the above

16. If production is less than sales, the net income with respect to absorption costing and variable costing:

A. is the same

B. variable costing yields higher net income

C) variable costing yields lower net income

D. none of the above

17. Ending inventory value with respect to absorption costing and variable costing:

A. is more using absorption costing

b. is less using variable costing

C. is the same

D. none of the above

18. If production equals sales and there are no beginning or ending inventories:

A. variable costing given a higher net income than absorption costing

B. variable costing given a lower net income than absorption

c. net income is the same under each assumption

D. none of the above

19. The first step in the development of the master budget is the development of the:

A. Production Budget

B. Sales Budget

C. Direct Materials purchase budget

D. none of the above

20. When calculating the materials quantity variance which of the following is used?

A. The actual materials used

B. The standard materials used

C. The standard price

D. all of the above

21. Hooks produces a product that requires 10 standard sq. ft./unit at a standard price of $6 per sq. ft. The actual cost per unit is:

A. $60

B. $50

C) unable to tell from the data

D. none of the above

22. If the sales price is $10/unit and, what are the variable costs per unit to give a contribution margin of $6.

A) $4

B) $6

C) $10

D) none of the above

23. The present value of cash flow allows an individual to assess

A) the value of a present cash flow.

B) the value of a stream of cash flows in terms of the best alternative.

C) Both A and B

D. Neither A nor B

24. An income statement using the variable cost format shows the:

A. Net income

B. Contribution margin

C. Both A and B

D. None of the above

25. If production exceeds sales, the net income with respect to absorption costing and variable costing.

A) is the same

B) lower under absorption

C) higher under absorption My choice

D) higher under variable

27. Anson produces a product that requires 10 standard sq. ft. of plywood at $4 per sq.ft. If Anson produces 300 units and uses 3,100 sq. ft., the material price variance is:

A. $12,400

B. $12,000

C) unable to tell from the data given <--- My choice

D) none of the above

28. For capital budgeting purposes, an asset's depreciable life is:

A. always equal to the time horizon of an evaluation

B) equal to the asset's useful life.

C. equal to the assets economic life

D. none of the above

29. As the interest rate used to discount future cash flows is decreased, present value of the future cash inflows:

A) increases.

B. decreases

C. stays the same

30. How many equivalent units of conversion costs are in 20,000 physical units of product 10% complete?

A. 200

B) 2,000

C. 20,000

D. Cannot be determined from data given

31. A discount factor

A. is the reverse of compounding future cash flows

B. performs the reverse function of discounting interest rate

C. All of the above

D. none of the above

32. Direct labor is

A. Prime Cost

B. Conversion Cost

C. Both A and B prime cost and conversion cost

D. Neither A nor B

33. Montson, Inc. produces a product requiring three square feet at $6 per square foot. If the desired ending inventory is $18,000 and the beginning inventory is $36,000, how many units must Montson produce to make direct materials purchases $54,000?

A. 3,000

B) 4,000

C. 1,000

D. Cannot tell from data given

34. Sales less variable costs are called the:

A. Breakeven point

B. Fixed Cost point

C. contribution margin

D. None of the above

35. which of the following would be included among the investment numbers of a capital budget?

A. Purchase price of asset

B. Trade in value of asset being replaced

C. Investment tax credit from asset acquisition

D. All of the above

36.The IMA sponsors which of the following designations A. CPA

B. CMA

C. CA

D. none of the above

37. The second step in the development of the master budget is the development of the

A. Production Budget

B. Sales Budget

C. Direct Materials purchase budget

D. None of the above

38. An example of a period cost is

A. direct labor

B. direct materials

C. salesperson commission

D. none of the above

39. The first budget needed in the budgeting process is the

A. sales budget

B. cost of goods sold budget

C. production budget

D. labor budget

40. An example of an internal document that assist managers in planning is the

A. Income statement

B. Balance sheet

C. Budgets

D. None of the above

41. If there are no unites in finished goods ending inventory and cost of goods manufactured is less than cost of goods sold, then there must be units in:

A. finished goods beginning inventory

B. work in process ending inventory

C. work in process beginning inventory

D. none of the above

42. Texs applies an overhead rate of $10/unit based on 200 units. If Texs produces 210 units and has a flexible overhead budget of $1,900, the overhead volume variance is

A. 200 favorable

B. 200 unfavorable

C. 100 favorable

D. 100 unfavorable

43. Breakeven analysis requires which of the following items?

A. sales

B. variable costs

C. fixed costs

D. all of the above

44. As production levels decrease the fixed cost per unit:

A. decreases

B. increases

C. stays the same

D. none of the above

45. Lines, Inc. applies overhead at the standard rate of $20/units, based on anticipated production of $2,000 units. If Lines actual overhead is $41,000, the overhead volume variance is

A. 1,000 favorable

B. 1,000 unfavorable

C. cannot tell from data given

D. none of the above

46. Indirect material costs are classified as

A. Direct labor

B. Direct materials

C. Fixed overhead

D. None of the above

47. A budget that accounts for different revenue levels and the corresponding expenses associated with those levis is a:

A. Static Budget

B. Flexible Budget

C. Balance sheet budget

D. None of the above