1. Which one of the following is NOT a major difference between financial and managerial accounting?

Select one:

a. Financial accounting has defined rules and managerial accounting does not

b. Financial accounting is communicating with outside parties, while managerial accounting communicates with internal management

c. Managerial accounting focuses on budgeting while financial accounting reports past performance

d. Managerial accounting reports must be audited, but financial accounting reports do not

2. Woolman College is expanding their on-campus student center. Their current facility is 20,000 square feet and costs $1,500 / month in utilities and $ 400 / month in insurance. Five years ago, they remodeled the current facility for $30,000. The proposed expansion will increase the size of the facility to 40,000 square feet, will include a full-functioning restaurant and will require the remodeled sections to be torn down and renovated. Management estimates they will need to purchase an additional $25,000 in kitchen equipment. Also, utilities will increase to $ 3,000 / month and insurance will increase to $ 1,000 / month. To expand the facilities, Woolman will need to use $ 500,000 that is currently in their investment account, returning 10% annually. The differential cost of utilities from choosing to expand the facilities is:

Select one:

a. $ 1,000 / month

b. $ 1,500 / month

c. $ 2,500 / month

d. $ 4,000 / month

3.

Woolman College is expanding their on-campus student center. Their current facility is 20,000 square feet and costs $1,500 / month in utilities and $ 400 / month in insurance. Five years ago, they remodeled the current facility for $30,000. The proposed expansion will increase the size of the facility to 40,000 square feet, will include a full-functioning restaurant and will require the remodeled sections to be torn down and renovated. Management estimates they will need to purchase an additional $25,000 in kitchen equipment. Also, utilities will increase to $ 3,000 / month and insurance will increase to $ 1,000 / month. To expand the facilities, Woolman will need to use $ 500,000 that is currently in their investment account, returning 10% annually. The sunk costs of choosing to expand the facilities are:

Select one:

a. The $ 25,000 of additional restaurant equipment

b. The $ 50,000 of lost investment returns

c. The $ 2,500 / month of new utilities cost

d. The $ 30,000 of remodeled facilities

4.

Woolman College is expanding their on-campus student center. Their current facility is 20,000 square feet and costs $1,500 / month in utilities and $ 400 / month in insurance. Five years ago, they remodeled the current facility for $30,000. The proposed expansion will increase the size of the facility to 40,000 square feet, will include a full-functioning restaurant and will require the remodeled sections to be torn down and renovated. Management estimates they will need to purchase an additional $25,000 in kitchen equipment. Also, utilities will increase to $ 3,000 / month and insurance will increase to $ 1,000 / month. To expand the facilities, Woolman will need to use $ 500,000 that is currently in their investment account, returning 10% annually. The opportunity costs of choosing to expand the facilities are:

Select one:

a. The $ 25,000 of additional restaurant equipment

b. The $ 50,000 of lost investment returns

c. The $ 2,500 / month of new utilities cost

d. The $ 10,000 of old coffee shop and restaurant equipment