1

1. When management directs attention only to those activities not proceeding according to plan, they are engaging in:

   Activity-based management

   Organization-based management

   Management by exception

   Just-in-time management

1 points

QUESTION 2

1. Over the short term, which type of costs is indifferent to activity level changes?

   Variable costs

   Fixed costs

   Mixed costs

   Step costs

1 points

QUESTION 3

1. A unit contribution margin measures:

   The difference between price and variable cost per unit

   The difference between sales and cost of goods sold on a unit basis

   The difference between unit sales and total costs per unit

   The percentage difference between sales and cost of goods sold

1 points

QUESTION 4

1. Which of the following statements about budgeted financial statements is not true?

   Budgeted financial statements need to adhere to the same format as the audited financial statements.

   Development of budgeted financial statements is facilitated by spreadsheet programs.

   Budgeted financial statements reflect the results of operations assuming all budgeted predictions are correct.

   Budgeted financial statements are hypothetical.

1 points

QUESTION 5

1. Which of the following statements concerning the cash budget is true?

   The cash budget summarizes all economic activities during the budget period.

   The cash budget summarizes all cash receipts and disbursements during the budget period.

   The cash budget summarizes all sales and expenses during the budget period.

   The cash budget summarizes all revenues and expenses during the budget period.

1 points

QUESTION 6

1. Cari German uses gas to heat her home. She has accumulated the following information regarding her monthly gas bill and monthly heating degree-days. The heating degree-days value for a month is found by first subtracting the average temperature for each day from 65 degrees and then summing these daily amounts together for the month.

   Month	Heating Degree-Days	Gas Bill
   February	1,900	$254
   April	600	$101

   What will be the increase in Cari's monthly gas bill per heating degree-day using the high-low method?

   $0.3309

   $0.1177

   $46.00

   $153.00

1 points

QUESTION 7

1. The Apollo Delivery Service has the following information about its truck fleet miles and operating costs:

   Year	Miles	Operating Costs
   2011	250,000	$160,000
   2012	300,000	$175,000
   2013	350,000	$210,000

   What is the best estimate of fixed costs for fleet operating expenses in 2014 using the high-low method?

   $100,000

   $ 35,000

   $175,000

   $ 50,000

1 points

QUESTION 8

1. The Fairmont Machine Shop wants to develop a cost estimating equation for its monthly cost of electricity. It has the following data:

   Month	Cost of Electricity (Y)	Direct Labor-Hours (X)
   January	$14,000	1,500
   April	$15,000	1,700
   July	$17,000	2,000
   October	$14,500	1,600

   What would be the best equation using the high-low method?

   Y = $4,000 + $7X

   Y = $0 + $9X

   Y = $1,000 + $8X

   Y = $5,000 + $6X

1 points

QUESTION 9

1. Depreciation of a copy machine in the Human Resource Department would best be classified as what type of cost?

   Variable Cost

   Fixed cost

   Mixed cost

   Step cost

1 points

QUESTION 10

1. Really Fast Delivery Services has the collected the following information about operating expenditures for its delivery truck fleet for the past five years:

   Year	Miles	Operating Costs
   2009	110,000	$390,000
   2010	140,000	$420,000
   2011	100,000	$360,000
   2012	130,000	$410,000
   2013	170,000	$450,000

   Using the high-low method, what is the cost estimate for variable costs for 2014?

   $1.29

   $2.00

   $1.60

   $1.50

1 points

QUESTION 11

1. Really Fast Delivery Services has the collected the following information about operating expenditures for its delivery truck fleet for the past five years:

   Year	Miles	Operating Costs
   2009	110,000	$390,000
   2010	140,000	$420,000
   2011	100,000	$360,000
   2012	130,000	$410,000
   2013	170,000	$450,000

   Using the high-low method, what is the cost estimate for fixed costs for 2014?

   $200,000

   $140,000

   $210,000

   $230,700

1 points

QUESTION 12

1. Wesley's income statement is as follows:

   Sales (10,000 units)	$150,000
   Less variable costs	- 48,000
   Contribution margin	$102,000
   Less fixed costs	- 24,000
   Net income	$ 78,000

   What is the unit contribution margin?

   $12.00

   $ 7.20

   $ 4.80

   $10.20

1 points

QUESTION 13

1. Wesley's income statement is as follows:

   Sales (10,000 units)	$150,000
   Less variable costs	- 48,000
   Contribution margin	$102,000
   Less fixed costs	- 24,000
   Net income	$ 78,000

   What is the contribution margin ratio?

   167 percent

   68 percent

   40 percent

   60 percent

1 points

QUESTION 14

1. Wesley's income statement is as follows:

   Sales (10,000 units)	$150,000
   Less variable costs	- 48,000
   Contribution margin	$102,000
   Less fixed costs	- 24,000
   Net income	$ 78,000

   If sales increase by 1,000 units, profits will:

   Increase by $12,000

   Increase by $10,200

   Increase by $4,800

   Increase by $8,000

1 points

QUESTION 15

1. Eva Company sells one product at a price of $25 per unit. Variable expenses are 40 percent of sales, and fixed expenses are $25,000. The sales dollars level required to break even are:

   $ 2,500

   $10,000

   $33,333

   $41,667

1 points

QUESTION 16

1. Determine the unit break-even point, assuming fixed costs are $60,000 per period, variable costs are $16.00 per unit, and the sales price is $25.00 per unit.

   5,000

   6,667

   15,000

   12,000

1 points

QUESTION 17

1. Buckbeak Corporation had the following income statement for 2014:

   Sales	$50,000
   Less variable costs	- 28,000
   Contribution margin	$22,000
   Less fixed costs	- 16,000
   Net income	$ 6,000

   Buckbeak's 2014 operating leverage is:

   0.333

   2.000

   3.667

   2.333

1 points

QUESTION 18

1. The Snape Corporation has the following data for 2014:

   Selling price per unit	$10
   Variable costs per unit	$6
   Fixed costs	$20,000
   Units sold	12,000

   Snape's 2014 operating leverage is:

   0.50

   2.00

   4.00

   1.71

1 points

QUESTION 19

1. The following costs related to Summertime Company for a relevant range of up to 20,000 units annually:

   Variable Costs:
   Direct materials	$5.00
   Direct labor	1.50
   Manufacturing Overhead	2.50
   Selling and administrative	3.00
   Fixed Costs:
   Manufacturing overhead	$20,000
   Selling and Administrative	10,000

   The selling price per unit of product is $15.00. At a sales volume of 15,000 units, what is the total profit for Summertime Company?

   $ 30,000

   $ 15,000

   $225,000

   $300,000

1 points

QUESTION 20

1. The following information is available for Bluewood Corporation for a sales volume of 500 stereo speakers for the past month:

   	Total	Per Unit
   Sales	$225,000	$450
   Less: variable expenses	80,000	160
   Contribution margin	$145,000	$290
   Less: fixed expenses	$ 35,000
   Net operating income	$110,000

   What is the contribution margin ratio?

   12.0%

   30.0%

   40.0%

   64.4%

1 points

QUESTION 21

1. The following information is available for Bluewood Corporation for a sales volume of 500 stereo speakers for the past month:

   	Total	Per Unit
   Sales	$225,000	$450
   Less: variable expenses	80,000	160
   Contribution margin	$145,000	$290
   Less: fixed expenses	$ 35,000
   Net operating income	$110,000

   If sales increase by $51,750, net income will increase by what amount?

   $ 6,000

   $ 8,000

   $20,000

   $33,350

1 points

QUESTION 22

1. The Chateau Company manufactures 4,000 telephones per year. The full manufacturing costs per telephone are as follows:

   Direct materials	$ 4
   Direct labor	16
   Variable manufacturing overhead	12
   Average fixed manufacturing overhead	12
   Total	$44

   The Quick Assembly Company has offered to sell Chateau 4,000 telephones for $31 per unit. If Chateau accepts the offer, $20,000 of fixed overhead will be eliminated. Chateau should:

   Make the telephones; the savings is $4,000

   Buy the telephones; the savings is $35,000

   Buy the telephones; the savings is $24,000

   Make the telephones; the savings is $24,000

1 points

QUESTION 23

1. Black Cat Corporation manufactures a product with the following full unit costs at a volume of 4,000 units:

   Direct materials	$200
   Direct labor	80
   Manufacturing overhead (30% variable)	150
   Selling expenses (50% variable)	50
   Administrative expenses (10% variable)	80
   Total per unit	$560

   A company recently approached Black Cat's management with an offer to purchase 450 units for $550 each. Black Cat currently sells the product to dealers for $800 each. Black Cat's capacity is sufficient to produce the extra 450 units. No selling expenses would be incurred on the special order. If Black Cat's management accepts the offer, profits will:

   Decrease by $120,000

   Increase by $66,800

   Increase by $97,650

   Decrease by $24,000

1 points

QUESTION 24

1. Georgia Manufacturing Company produces products A, B, C, and D through a joint process. The joint costs amount to $250,000.

   Product	UnitsProduced	Sales Value at Split-Off	Additional Costs of Processing	Sales ValueAfter Processing
   A	1,500	$20,000	$5,000	$30,000
   B	2,500	$60,000	$6,000	$70,000
   C	2,000	$40,000	$8,000	$50,000
   D	3,000	$80,000	$12,000	$90,000

   If A is processed further, profits of A will:

   Decrease by $45,000

   Increase by $10,000

   Increase by $25,000

   Increase by $5,000

1 points

QUESTION 25

1. Clary Corporation sells 2,000 units of product Y per day at $2.00 per unit. Clary has the option of processing the product further for additional costs of $1,000 per day to produce product Z, which sells for $2.90 per unit. If Clary processes product Y further to produce product Z, the company's net income will:

   Decrease by $800 per day

   Decrease by $1,000 per day

   Increase by $800 per day

   Increase by $1,800 per day

1 points

QUESTION 26

1. The Cornell Milling Company manufactures an intermediate product identified as W1. Variable manufacturing costs per unit of W1 are as follows:

   Direct materials	$ 5
   Direct labor	$15
   Variable manufacturing overhead	$10

   Ithaca Tools has offered to sell Cornell Milling 10,000 units of W1 for $40 per unit. If Cornell Milling accepts the offer, $50,000 of fixed manufacturing overhead will be eliminated. Applying differential analysis to the situation, Cornell Milling should:

   Buy W1; the savings is $100,000

   Buy W1; the savings is $50,000

   Make W1; the savings is $100,000

   Make W1; the savings is $50,000

1 points

QUESTION 27

1. Curve Company has collected the following information:

   Cost to buy one unit	$48
   Production costs per unit:
   Direct materials	$22
   Direct labor	$16
   Variable manufacturing overhead	$2
   Total fixed manufacturing overhead	$190,000

   What level of production is needed for Curve to be indifferent between making or buying the part, assuming it can eliminate $150,000 of fixed costs?

   22,500 units

   16,250 units

   13,000 units

   18,750 units

1 points

QUESTION 28

1. In an effort to achieve short-run profit maximization, limited resources should first be allocated to the product with:

   The highest contribution margin per unit

   The highest contribution per unit of constraining factor

   The highest selling price per unit of constraining factor

   The lowest cost per unit of constraining factor

1 points

QUESTION 29

1. A balanced scorecard is:

   An evaluation process that focuses on productivity

   A performance measurement system that is strictly directed toward sales growth

   A performance measure that evaluates multiple categories related to organizational goals

   A series of checks and balances designed to be mutually cooperative with the financial statements

1 points

QUESTION 30

1. If the International Division of Latin American Products had an investment turnover of 2.7 and a return on sales of 0.24, the return on investment would be:

   26.7%

   52.8%

   64.8%

   384.0%