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printed and mailed. C) Utility costs increase at the same time that insurance costs increase. D) It makes sense that if a complex product has a large number of parts it will take longer to assemble than a simple product with fewer parts. E) The amount of direct labour used. Answer the following question(s) using the information below. A manufacturing firm is able to produce 1,000 pairs of shoes per hour, at maximum efficiency. There are three eight-hour shifts each day. Due to unavoidable operating interruptions, production averages 800 units per hour. In the month of June the plant actually operated only 25 days due to avoidable shut downs. 16) What is the theoretical capacity for the month of April? A) 600,000 units B) 720,000 units C) 744,400 units D) 576,000 units E) 480,000 units 17) The difference between budgeted fixed manufacturing overhead and the fixed manufacturing overhead allocated to actual output units achieved is called A) an efficiency variance. B) a flexible-budget variance. C) a manufacturing overhead flexible-budget variance. D) a production-volume overhead variance. E) an unallocated variable cost. 18) The flexible budget contains A) budgeted amounts for alternative levels of output. B) actual amounts for budgeted output. C) revenue based on budgeted quantity and actual unit price. D) actual costs for planned output. E) the difference between flexible and static budget fixed costs. 19) A limitation of comparing a company's performance against actual results of last year is that A) it includes adjustments for future conditions. B) feedback is no longer a possibility. C) the benchmark may be unrealistic. D) past results can contain menciencies of the past year.production run. If the company wanted to bid on a special one-time order, based on the above information only, what would be its minimum bid? A) $59 B) $81 C) $63 D) $74 E) $85 7) is an organization's ability to achieve low costs relative to competitors through productivity and efciency improvements, elimination of waste, and tight cost control. A) Strategy B) Product differentiation C) Cost leadership D) The balanced scorecard E) Product leadership 8) An organization that is using the product differentiation approach would A) focus on tight cost control. B) carefully cultivate its brands. C) provide products that are similar to competitors. D) invest more in productivity enhancements than R&D. E) recognize that demand is more price sensitive than if using a cost leadership approach. 9) An organization that is using the cost leadership approach would A) incur costs for innovative R&D. B) provide products at a higher price but with lower costs than its competitors. C) focus on productivity through efciency improvements. D) bring products to market rapidly. E) use a cost plus rather than a target pricing policy. Answer the following questions using the information below: Stewart Corporation plans to grow by offering a sound system, the 883000, that is superior and unique from the competition. Stewart believes that putting additional resources into R&D and staying ahead of the competition with technological innovations is critical to implementing its strategy. 10) Stewart's smegm E) the budgeting time period is set at one year. 20) All costs in a homogeneous cost pool have A) only one cost driver that will accurately represent the relationship between the costs and the activity. B) to be adjusted at year end to actual costs. C) the same cost behaviour. D) the same or a similar cause-and-effect (or benets- received) relationship with a single cost driver that is used as the cost-allocation base. E) a causal relationship with manufacturing costs. 1) When making decisions, it is best to use A) average costs. B) xed costs that would be incurred. C) unit cost, rather than total cost. D) variable costs that would be incurred. E) relevant costs. 2) Which of the following should management consider to avoid the pitfalls of relevant-cost analysis? A) Consider all current revenues and costs. B) Include any item of revenue or cost that is either an expected future revenue or expected future cost, and, differs between the alternatives. C) Historic revenues and costs for items that differ according to alternatives should be considered. D) Assume that all xed costs are irrelevant. E) Assume that all variable costs are relevant. 3) Sunk costs A) are relevant. B) are differential. C) have future implications. D) are ignored when evaluating alternatives. E) are evaluated to determine if they are relevant or not evaluating alternatives. 4) A price-bidding decision for a one-time-only special order includes an analysis of A) only marketing costs. B) all cost drivers. C) all costs of each function in the value chain. D) only xed manufacturing costs. E) indirect costs of each category in the value chain. 5) Decisions on the price to bid on a one-time-only special order should include A) only cost data. B) only the potential bids of competitors. C) existing xed manufacturing overhead. D) cost data, and the use of variable costing income statements. E) cost data and potential bids of competitors. 6) Your company produces 700,000 widgets per year but has the capacity to produce 950,000 units. Company records show the following; full product costs = $85 per unit, which includes xed manufacturing overhead of $11, and variable overhead of $4 per unit, and direct variable costs 0mm 700,000 A) product differentiation. B) downsizing. C) reengineering. D) cost leadership. E) salability. 11) Deciding whether to make a component part or to purchase it, would be an example of which cost allocation purpose? A) to provide information for economic decisions B) to motivate managers C) to determine employee's wages D) to measure income and assets for reporting to external parties E) to motivate employees 12) For the economic decision purpose A) the costs in all six business functions should be included. B) costs for only one function is included. C) period costs are not allocated. D) costing is only related to product pricing. E) only inventoriable costs under ASPE/IFRS should be included. 13) Which of the following criteria subsidizes poor performers at the expense of the best performers? A) ability to bear B) benefit received C) causality D) fairness and equity E) benefits expended 14) The belief that a corporate division with higher sales ought to be allocated more of the company's advertising costs because it must have derived more benefit from the expenditures than a division with lower sales, is an example of which criteria for cost allocation decisions? A) ability to bear B) benefits expended C) causality D) fairness and equity E) benefit received 15) Which of the following does NOT represent a cause- and-effect relationship? A) Material costs increase as the number of units produced increases. B) A company is charged 40 cents for each brochure