Answer all 30 questions multiple choice, answers needed with 1 hour and 15 minutes.

QUESTION 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 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 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 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 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 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 February April Heating Degree-Days 1,900 600 Gas Bill $254 $101 What will be the increase in Cari's monthly gas bill per heating degree-day using the high-low method? $0.33 09 $0.11 77 $46.0 0 $153. 00 1 points QUESTION 7 The Apollo Delivery Service has the following information about its truck fleet miles and operating costs: Year 2011 2012 2013 Miles 250,000 300,000 350,000 Operating Costs $160,000 $175,000 $210,000 What is the best estimate of fixed costs for fleet operating expenses in 2014 using the high-low method? $100,0 00 $ 35,000 $175,0 00 $ 50,000 1 points QUESTION 8 The Fairmont Machine Shop wants to develop a cost estimating equation for its monthly cost of electricity. It has the following data: Month January April July October Cost of Electricity (Y) $14,000 $15,000 $17,000 $14,500 Direct Labor-Hours (X) 1,500 1,700 2,000 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 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 Really Fast Delivery Services has the collected the following information about operating expenditures for its delivery truck fleet for the past five years: Year 2009 2010 2011 2012 2013 Miles 110,000 140,000 100,000 130,000 170,000 Operating Costs $390,000 $420,000 $360,000 $410,000 $450,000 Using the high-low method, what is the cost estimate for variable costs for 2014? $1.2 9 $2.0 0 $1.6 0 $1.5 0 1 points QUESTION 11 Really Fast Delivery Services has the collected the following information about operating expenditures for its delivery truck fleet for the past five years: Year 2009 2010 2011 2012 2013 Miles 110,000 140,000 100,000 130,000 170,000 Operating Costs $390,000 $420,000 $360,000 $410,000 $450,000 Using the high-low method, what is the cost estimate for fixed costs for 2014? $200,0 00 $140,0 00 $210,0 00 $230,7 00 1 points QUESTION 12 Wesley's income statement is as follows: Sales (10,000 units) Less variable costs Contribution margin Less fixed costs Net income $150,000 - 48,000 $102,000 - 24,000 $ 78,000 What is the unit contribution margin? $12. 00 $ 7.20 $ 4.80 $10. 20 1 points QUESTION 13 Wesley's income statement is as follows: Sales (10,000 units) Less variable costs Contribution margin Less fixed costs Net income $150,000 - 48,000 $102,000 - 24,000 $ 78,000 What is the contribution margin ratio? 167 percent 68 percent 40 percent 60 percent 1 points QUESTION 14 Wesley's income statement is as follows: Sales (10,000 units) Less variable costs Contribution margin Less fixed costs Net income $150,000 - 48,000 $102,000 - 24,000 $ 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 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 $10,0 00 $33,3 33 $41,6 67 1 points QUESTION 16 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. 5,00 0 6,66 7 15,0 00 12,0 00 1 points QUESTION 17 Buckbeak Corporation had the following income statement for 2014: Sales Less variable costs Contribution margin Less fixed costs Net income $50,000 - 28,000 $22,000 - 16,000 $ 6,000 Buckbeak's 2014 operating leverage is: 0.33 3 2.00 0 3.66 7 2.33 3 1 points QUESTION 18 The Snape Corporation has the following data for 2014: Selling price per unit Variable costs per unit Fixed costs Units sold $10 $6 $20,000 12,000 Snape's 2014 operating leverage is: 0.5 0 2.0 0 4.0 0 1.7 1 1 points QUESTION 19 The following costs related to Summertime Company for a relevant range of up to 20,000 units annually: Variable Costs: Direct materials Direct labor Manufacturing Overhead Selling and administrative Fixed Costs: Manufacturing overhead Selling and Administrative $5.00 1.50 2.50 3.00 $20,000 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 $225,0 00 $300,0 00 1 points QUESTION 20 The following information is available for Bluewood Corporation for a sales volume of 500 stereo speakers for the past month: Sales Less: variable expenses Contribution margin Less: fixed expenses Net operating income Total $225,000 80,000 $145,000 $ 35,000 $110,000 Per Unit $450 160 $290 What is the contribution margin ratio? 12.0 % 30.0 % 40.0 % 64.4 % 1 points QUESTION 21 The following information is available for Bluewood Corporation for a sales volume of 500 stereo speakers for the past month: Total Sales Less: variable expenses Contribution margin Less: fixed expenses Net operating income $225,000 80,000 $145,000 $ 35,000 $110,000 Per Unit $450 160 $290 If sales increase by $51,750, net income will increase by what amount? $ 6,000 $ 8,000 $20,0 00 $33,3 50 1 points QUESTION 22 The Chateau Company manufactures 4,000 telephones per year. The full manufacturing costs per telephone are as follows: Direct materials $4 Direct labor Variable manufacturing overhead Average fixed manufacturing overhead Total 16 12 12 $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 Black Cat Corporation manufactures a product with the following full unit costs at a volume of 4,000 units: Direct materials Direct labor Manufacturing overhead (30% variable) Selling expenses (50% variable) Administrative expenses (10% variable) Total per unit $200 80 150 50 80 $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 Georgia Manufacturing Company produces products A, B, C, and D through a joint process. The joint costs amount to $250,000. UnitsProduce Sales Value Product d at Split-Off A 1,500 $20,000 B 2,500 $60,000 C 2,000 $40,000 D 3,000 $80,000 Additional Costs of Processing $5,000 $6,000 $8,000 $12,000 Sales ValueAfter Processing $30,000 $70,000 $50,000 $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 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 The Cornell Milling Company manufactures an intermediate product identified as W1. Variable manufacturing costs per unit of W1 are as follows: Direct materials Direct labor $5 $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 Curve Company has collected the following information: Cost to buy one unit Production costs per unit: Direct materials Direct labor Variable manufacturing overhead Total fixed manufacturing overhead $48 $22 $16 $2 $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 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 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 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 %