QUESTION 1

Production environment costs and post-purchase costs are examples of environmental product costs. True

False

QUESTION 2

Which of the following have been found to be TRUE? a. Companies that emphasize ethics outperform companies that do not emphasize ethics. b. Companies that mention ethics in their management reports perform below average. c. Companies with a strong code of ethics and a sense of integrity and honor will have trouble competing in the long run. d. All of the above

QUESTION 3

The development of environmental performance measures is considered a a. detection activity. b. Internal fault activity. c. External fault activity. d. Prevention activity.

QUESTION 5

How are standards developed? What is the difference between ideal and currently achievable standards and give an example of each?

QUESTION 6

The cost-volume-profit analysis is based on the analysis of fixed and variable costs. True

False

QUESTION 7

Activity-based costing makes it easy to calculate environmental costs by tracking costs for responsible products. True

False

QUESTION 14 1. Selected data from Division A of Green Company are as follows: Sales $ 500,000 Average investment $ 300,000 Operating income $ 60,000 Minimum rate of return 15% 2. Division A's residual income (RI) is: a. $24,000. b. $15,000. c. $30,000. d. $54,000. e. $36,000. QUESTION 15 1. Red Company allocates research and development costs to its three research facilities based on each facility's total annual revenue from new product developments: Facility location Kentucky Arizona Illinois Total New product revenue $ 56,000,000 $ 100,000,000 $ 84,000,000 $ 240,000,000 Research & Development $ 60,000,000 2. Using revenue as an allocation base, the amount of costs allocated to the Illinois research facility is calculated to be: a. $17,000,000. b. $28,000,000. c. $33,000,000. d. $14,000,000. e. $21,000,000. QUESTION 18 1. What is an advantage of residual income? a. A firm can use it to forecast operating profit. b. It only requires one rate of return across all business units. c. A firm can use it to build up its supply of cash for future investments. d. A firm can adjust the required rates of return for differences in risk. e. It ties business units together to show company health. QUESTION 20 1. What special problems and opportunities arise in setting transfer prices in an international setting (i.e., for transfers between subunits that operate in different countries)? Hint: In terms of special problems, make sure you reference OECD requirements and practical implementation alternatives for general OECD requirements.)