C a n that says resources should be spent the expected benefits to the company exceed the expected A) cost-benefit approach C) different costs for different purposes Explanation B) balanced Scorecard D) behavioral and technical considerations 6) Cast assignment A) includes future and arbitrary costs B) is the same as cost accumulation C) is the difference between budgeted and actual costs D) associates accumulated costs with certain cost objects Explanation A) 7) Which of the following statements about the direct direct soc i ation is true A) The design of sales target affects the direct indirect classification B) Indirect costs are always traced. C) The direct/indirect classification depends on the cost control measures D) Indirect costs are always allocated Explanation: A) 8) Cost allocation is A) the process of tracking both direct and indirect costs associated with a cost object B) the assignment of indirect costs to the chosen cost object C) made based on material acquisition document D) the process of determining the opportunity cost of a cost object chosen Explanation: A) 9) A manufacturing plant produces two product lines golf equipment and scree n. An empleo direct cost for the golf equipment line is A) salaries of the clerical staff that work in the company administrative office B) beverages provided daily in the plant break room for the entire staff Coverheads incurred in producing both golf and soccer equipment Dy monthly lease payments for a specialized piece of equipment needed to manufacture the poll drive Explanation: A) Explanation A) 11) Which of the following statement is true of directo A) Allfixed costs are direct costs B) A direct cost of one cost object can be an indirect cost of another cost object C) All variable costs are direct costs D) A direct cost of one cost object is a true s ed the budete costs Explanation: A) 12) Which of the following is true if the volume of sales increases (within a relevant ange) A) total fixed cost increases B) total Bed cost decreases C) total variable cost decreases Dy total variable costs Explanation: A) 13) Rally Synthesis Inc. manufactures and sells 100 bottles per day. Fixed costs are $22.000 and the variable costs for manufacturing 100 bottles are $30,000. Fach bottle is sold for 51,200. How would the daily profit be affected vt the daily volume of sales drop by 1015? A) profits are reduced by 559.000 B) profits are reduced by 512.000 profits are reduced by $3.000 D) profits are reduced by S9,000 Explanation: A) D) Variable cost per unit - $30,000/100-300 Profit for 100 bottles -($1,200 -100) -(522,000 $30,000) = 68,000 Sales after 10% drop - 100 (1 -0.1) - 90 Profit for 90 bottles - (51,20090) - (522,000 (90 300)) $39,000 Change in profit - $68,000 - $59,000 = $9.000. Hence, the profit has decreased by 99,000
