What is the second step in establishing a standard cost system?

Select an answer:

• developing standard costs

• collecting actual costs

• comparing actual costs with expected costs

• identifying why a variance exists

• 2)

  How does having a good cash budget help a company that anticipates a short-term cash deficiency a few months into the future?

  Select an answer:

• It will be easier for the company to get a bank loan in advance of when the cash is needed.

• The company can use the lag time to increase its owner's equity.

• 3)

  How does having a good cash budget help a company that anticipates a short-term cash deficiency a few months into the future?

  Select an answer:

• It will be easier for the company to get a bank loan in advance of when the cash is needed.

• The company can use the lag time to increase its owner's equity.

• It will be easier for the company to get a bank loan if it waits until the cash is needed.

• The company can use the lag time to turn its receivables into cash.

• 4)

  FabCo is a company that stamps automobile fenders from sheet steel. How should FabCo categorize the rubber bumpers it replaces in its monthly maintenance on pressing machines?

  Select an answer:

• period costs

• direct labor

• Previous

• 5)

  hat are the two primary questions a business should ask when it considers an investment?

  Select an answer:

• Does the investment make sense, and will the investment result in future income?

• Does the investment involve cash, and is it the best among acceptable alternatives?

• Does the investment involve cash, and will the investment provide future income?

• Does the investment make sense, and is it the best among acceptable alternatives?

• 6)

  What is capital budgeting?

  Select an answer:

• a comparison of current operating costs to multi-year operating costs

• a comparison of the magnitude of upfront cost to the magnitude of estimated future multi-year benefits

• 7)

  After overhead cost activities are identified in an activity-based costing system, what is the next step?

  Select an answer:

• Make decisions regarding overhead costs.

• Analyze individual overhead costs.

• Identify measurable cost drivers.

• Assign overhead to activities.

• 8)

  Your new florist shop is doing very well. It is doing so well, you are considering adding a second refrigerator for wedding flower arrangements. If you do, which cost will become a mixed cost?

  Select an answer:

• manager salary cost

• activity cost

• vendor product cost

• utilities cost

• 9)

  Mahall Chocolates has completed its activity-based costing analysis. If Mahall makes appropriate decisions based on the data, which error will the company avoid?

  Select an answer:

• assigning costs to production using measurable cost drivers

• assigning overhead based on the quantity of product produced

• relying on the actual economic cost of production

• identifying the particular activities that create overhead costs

• 10)

  Osaka Sushi is a popular Japanese restaurant. Which element of Osaka Sushi's operations is considered overhead?

  Select an answer:

• the restaurant manager's salary

• the cost of the food items

• 11)

  What is the most important reason for a business to have a budget?

  Select an answer:

• to help the business identify problems and respond proactively

• to help the business identify and solve problems before they arise

• to help the business know how to properly allocate resources

• to help the employees of a business know what they are expected to do

• 12)

  While it might be considered a clich, the best way to understand how a business organization works is to _____.

  Select an answer:

• follow the money

• cook the books

• find the bottom line

• keep your eye on the prize

• 13)

  If a company engages in a strategy of vertical integration, what new problem can the company face?

  Select an answer:

• determining profitability of a project

• reducing its purchasing costs

• choosing between dissimilar projects

• focusing on the cost per unit

• 14)

  In the context of activity-based costing for a manufacturing business, what is a cost pool?

  Select an answer:

• It is a permanent account used to group costs by activity.

• It is a temporary account used to group costs by activity.

• 15)

  If sales price = $1000 per unit, variable costs = $500 per unit, and total fixed costs = $125,000, and 2,000 units are sold, what is the break-even point?

  Select an answer:

• 1000 units

• 100 units

• 500 units

• 250 units

• 16)

  What type of planning is long-run planning?

  Select an answer:

• operational budgeting

• process prioritizing

• capital budgeting

• production prioritizing

• 17)

  _____ in a service firm is equivalent to the production of a manufacturing firm for terms of the budgeting process.

  Select an answer:

• Sales volume

• Selling expense

• 17)

• Wages and salaries

• Administrative expense

• It is where all costs related to production are pooled together.

• It is where all costs not related to production are pooled together.

• the salaries paid to cooks

• the tips paid to the servers

• a comparison of yearly cash budgets with the firm's master budget

• a comparison of capital outlays to opportunity costs

• manufacturing overhead

• direct materials

• It will be easier for the company to get a bank loan if it waits until the cash is needed.

• The company can use the lag time to turn its receivables into cash.