estion 1: Select either (D or (F for each of the following statements: (5 marks) (T) (F) When an investing company owns less than 50 percent of another 2. (T(F When a company acquires all of the common stock of a subsidiary, the company, the companies must prepare consolidated financial statements. books of the subsidiary are no longer used. 3. (F) The master budget reflects the impact of operating decisions, but not 4. (F) A cost pool is anything for which a separate measurement of costs is 6. D (F)A good example of a cost driver for production labor wages is the -8. CD -(F) Totalrevenues esst talfixedcostsequalthe contributionmargin. 0.Eliminstim entris avoid double-couming assts, libilities and financing decisions. desired to separate costs into fixed and variable components number of engineering hours worked 5F In order to perfom cos-volume profit analysis,a company must be able 7 A budget is an example of an informal business plan (F) Traditional systems are likely to undercost complex products with lower (T) | 9 production volume stockholders' equity on the consolidated financial statements. estion 2: Choose the most suitable answer a, b. e, d for each of the statements: (10 marks) 1) Traditional cost systems distort product costs because a. they do not know how to identify the appropriate units. b. competitive pricing is ignored. c. they emphasize financial accounting requirements. d. they apply average support costs to each unit of product 2) Which of the following is a fixed cost in an automobile manufacturing plant? a. Administrative salaries b. Electricity used by assembly-line machines c. Sales commissions d. Windows for each car produced 3) Company B has 40,000 shares of its common stock outstanding. Company A owns 15,000 s of Company B's stock. What method should Compa Company B? ny A use to account for its investment in hares a. market-value b. equity c. consolidated d. available-for-sale 4) Cost drivers are a. the different functions in the value chain b. different types of functional areas in the firm c. measures of activities that require the use of resources and thereby d. different types of cost calculations cause costs