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Q1. Gina, the owner of House Painting International, sends out
an email to the managers and employees in her company. In the email, she makes
reference to the “lifeblood” of the organization. Per the module video, to what
is she referring?
Q2. Suppose
you are growing vegetables and decide to sell these vegetables at a local
farmers’ market. Which of the following reflects frequent, operational
decisions you are likely to make? (Check all that apply.)
Q1. Which of the following concepts is part of the definition of managerial
accounting? (Check all that apply.)
Q2. Which of the following best reflects the decision-influencing role of managerial
accounting information?
Q1. According to the lecture, what decisions are made within organizations?
Q2. Who are decision makers within organizations? (Check all that apply.)
Q3. True or false? Most decisions in organizations are scheduled and occur at regular intervals.
Q4. According to the lecture, what is the “lifeblood” of the organization?
Q5. Suppose you are opening a mobile phone and tablet repair kiosk in a mall. Which of the following decisions are you likely to make? (Check all that apply.)
Q6. Suppose you are opening a mobile phone and tablet repair kiosk in a mall. Which of the examples of information might you find useful? (Check all that apply.)
Q7. Which of the following sub-disciplines relates most to decisions made within the organization?
Q8. Which of the following concepts are part of the definition of managerial accounting? (Check all that apply.)
Q1. True or false? A cost is best defined as the
price paid for a good or service.
Q2. Which of the following best defines the concept of an opportunity cost?
Q3. Leo, an employee at a mobile phone sales and service store,
is preparing a cost report for the current month. In the past, he has focused
on financial costs. However, he has recently broadened his view.
Given his new perspective, which costs would Leo
likely include in his report? (Check all that apply.)
Q1. Which of following best characterizes different categories of product costs?
Q2. Which of the following organizations would likely rely on a process costing
system? (Check all that apply.)
Q3. True or false? An organization implementing
activity-based costing likely intends to increase the accuracy of cost
information.
Q1. Which of the following is the best definition of a cost?
Q2. True or false? Like cash and materials, time is an example of a resource.
Q3. Which of the following are examples of an organization’s costs? (Check all that apply.)
Q4. True or false? Costs are sometimes difficult to measure accurately.
Q5. True or false? Opportunity costs are often difficult to quantify.
Q6. Jerry, a manager at Wildcat Incorporate, is explaining basic management concepts to new employees. He is speaking about resources and costs. Which of the following statements Jerry makes are accurate? (Check all that apply.)
Q7. Which of the following best defines a cost system?
Q8. What differentiates direct materials and direct labor from overhead?
Q9. Which of the following reflect process costing systems? (Check all that apply.)
Q10. Which of the following reflect job costing systems? (Check all that apply.)
Q11. Which of the following organizations would likely rely on a job costing system? (Check all that apply.)
Q12. True or false? An organization implementing activity-based costing likely intends to increase the accuracy of cost information.
Q13. A consultant who has worked on multiple engagements compares two clients in terms of likelihood that each will implement an activity-based costing system. She identifies Shark Corporation as more likely to use activity-based costing than Duck Company. Which of the following statements support this assessment? (Check all that apply.)
Q14. Which of the following reflect disadvantages of activity-based costing? (Check all that apply.)
Q15. Which of the following best characterizes organizations’ need to organize costs according to behavior?
Q16. Gina, a manager at Badger Express, is explaining cost behavior to her employees. Which of the following statements is Gina likely to make?
Q17. Gopher Inc. produces televisions. Assuming the activity of interest is production volume, which of the following are variable costs? (Check all that apply.)
Q18. Sharon owns a restaurant and also caters custom food for special events. Given the various sources and types of costs in her business, which of the following statements represents advice that you would give to Sharon? (Check all that apply.)
Q1.Which of the following are true statements about the financial and managerial
approaches to profit? (Check all that
apply.)
Q2. Which of following is true about the contribution margin? (Check all that apply.)
Q3.Brand Company has the following financial perspective of profitability for the current month:
Gordon, a manager at Brand Company, has decided to adopt a managerial perspective of profitability.
Using the provided information, which of the following statements are true about the managerial perspective? (Check all that apply.)
Q1. Which of the following statements are accurate about cost-volume-profit analysis? (Check all that apply.)
Q2. Which of the following reflect limitations of cost-volume-profit analysis? (Check all that apply.)
Q3. Janesville Company has the following information related to its manufacturing and selling of computer monitors.
Analysts compute the break-even point using the above information and conclude that production capacity and estimated sales can reach that point.
However, a few days later, the analyst learns that revenues will increase by 20%.
What is the effect of this change on the original break-even point?
Q1. Gas Corporation has the following managerial perspective of profitability for the current month:
Shelly, a manager at Gas Corp., is preparing a profitability report for the lending officer at Gas Corp’s bank.
Using the provided information, which of the following statements are true about the financial perspective? (Check all that apply.)
Q2. Jonas Company has the following information related to its manufacturing and selling of decorative vases.
What are the variable costs and fixed costs that Jonas Company will use to calculate the break-even point?
Q3. John Company has the following information related to its manufacturing and selling of desk lamps.
What is John Company’s break-even point for desk lamps?
Q4. Beloit Corporation has the following information related to its manufacturing and selling of computer back-up hard drives.
Analysts compute the break-even point using the above information, and conclude that production capacity and estimated sales can reach that point.
However, a few days later, the analyst learns that fixed costs will decrease by 5%.
What is the effect of this change on the original break-even point?
Q5. James Company has the following information related to its manufacturing and selling of staplers.
Which of the following are true regarding the assumptions of James Company’s cost-volume-profit analysis? (Check all that
apply.)
Q1. True or false? The managerial approach to profit is the approach designed to share information outside of the organization.
Q2. Which of the following are true statements about the financial and managerial approaches to profit? (Check all that apply.)
Q3. Which of following is true about the contribution margin? (Check all that apply.)
Q4. True or false? Cost-volume-profit analysis uses estimates or what we already know to make predictions about what we want to know.
Q5. Which of following best defines the break-even point?
Q6. Jacob is a manager in a bakery. He is considering expanding his dessert line to include gluten-free options. Which of the following is relevant to Jacob’s use of break-even point information? (Check all that apply.)
Q7. Which of the following statements are accurate about cost-volume-profit analysis? (Check all that apply.)
Q8. True or false? A limitation of cost-volume-profit analysis is that firms must rely on estimates.
Q9. Chad is using cost-volume-profit analysis to predict next month’s profits. Which of the following reflect assumptions Chad faces when using this analysis? (Check all that apply.)
Q10. Lucia is using cost-volume-profit analysis to predict profits for a new product line. Which of the following reflect how Lucia’s analysis is subject to assumptions? (Check all that apply.)
Q1. Which of the following are examples of operational decisions? (Check all that apply.)
Q2. Which of following best characterizes relevant information?
Q3. Mitch Company currently purchases a key input into its main product from Redmond Corp. Managers at Mitch Company are considering insourcing production of this input.
Currently, Mitch pays $70 per unit for the input.
The managers estimate the following per-unit costs to produce the input in-house: $20 in materials, $25 in labor, $20 in variable manufacturing overhead, and $10 in fixed costs. The fixed costs are allocated from the total fixed costs generated by the entire factory.
Regardless of whether the input is manufactured within the company or purchased from Redmond, Mitch Company needs 500 units.
Which of the following statements are true? (Check all that apply.)
Q1. True or false? Fixed costs are always irrelevant
in operational decisions.
Q2. Grachowski Corporation makes an unassembled table that sells
for $40. Product costs are $18 per table. Karen, the product line manager,
suggests that Grachowski Corp. should instead sell an assembled table, as
revenues will be higher.
The market price for the assembled table would be $52. The cost of additional assembly is $12.
Which of the following statements are true? (Check all that apply.)
Q3. Jaclyn owns a bakery. Lydia, the owner of the business next door, asks Jaclyn if she could provide cookies every Friday for her employees for 25% less than the normal price.
True or false? If the discounted sales price exceeds variable costs, Jaclyn will accept the offer.
Q1. According to the lecture, which of the following are general categories of decisions made in organizations? (Check all that apply.)
Q2. Which of the following are examples of operational decisions? (Check all that apply.)
Q3. Sally, owner of “The Furniture Store,” is deciding whether to purchase manufactured table legs from Chris, a woodworker who owns her own workshop, or hire Leonard as a Furniture Store employee to help manufacture table legs.
True or false? Sally is making a sales-oriented decision.
Q4. True or false? Relevant information includes information that has the potential to make a difference in a decision.
Q5. True or false? Sunk costs are costs that have been incurred in the past, or have been committed to and cannot be avoided.
Q6. Ryan is a manager in a bank. He is using cost information to make a number of
operational decisions. Some of these costs are salaries for other employees,
who have formal one-year employment contracts. Which of the following statements are true regarding these costs? (Check
all that apply.)
Q7. Shelby is considering whether to drop a product line from her business. Some administrative costs are being allocated to the product line but will not change in total if Shelby decides to drop the product line. Which of the following statements are true regarding these costs? (Check all that apply.)
Q8. True or false? Fixed costs are always irrelevant in operational decisions because they do not change with production volume.
Q9. Sal owns a small manufacturing firm. He is deciding whether he should continue to purchase inputs from existing suppliers or manufacture the inputs in his own firm. Which of the following statements is true regarding Sal’s decision?
Q10. Ben owns a sports equipment retail store. He is considering adding various hockey equipment product lines. Which of the following reflect potentially relevant information in this decision? (Check all that apply.)
Q11. Jaclyn owns a bakery. Lydia, the owner of the
business next door, asks Jaclyn if she could provide cookies every Friday for
her employees for 25% less than the normal price. Which of the following
reflect issues Jaclyn will consider in the decision to accept Lydia’s
offer? (Check all that apply.)
Q12. Zach owns a “you-pick” blueberry farm. He owns a variety of young plants that he
sells to customers that visit the farm. The variety of blueberries that Zach
sells starts producing berries when the plant is three years old. Currently, Zach could sell his two-year old plants to
customers in a pot. Alternatively, he could wait one year, and deliver and
install the berry-producing plants.
Which of the following information would be irrelevant to Zach’s decision to sell this inventory now or process further? (Check all that apply.)
Q1. Joseph Company incurs per-unit costs of $11 in variable costs and $4 in
fixed costs to produce its main product, which sells for $24. A new customer in
the market, Katherine, offers to purchase 2,500 units at $16 each.
If the special offer is accepted, the units sold to Katherine would have to be
produced with capacity that was otherwise going to be used to produce units
sold to other customers.
Which of the following statements are true? (Check all that apply.)
Q2. Lillian Corporation currently makes a key input into its
main product. Bernard, a manager within Lillian, is arguing that the
organization should outsource production of this input, and buy it from a
third-party supplier.
Currently, the per-unit manufacturing costs are $12 in
materials, $18 in labor, $8 in variable manufacturing overhead, and $12 in
fixed costs per unit. The fixed costs
are allocated from the total of fixed costs generated by the entire factory.
Bernard’s third-party supplier would charge Lillian $54 per
unit, and could sell to Lillian the entire 1,000 units Lillian needs each year.
Also, if Bernard’s plan is implemented, it can use the
capacity currently being used to produce an input to generate additional profit
of $14,000.
Assuming Lillian is adopting a financial perspective, which of the following is true?
Q3. Joseph Company incurs per-unit costs of $11 in variable costs and $4 in
fixed costs to produce its main product, which sells for $24. A new customer in
the market, Katherine, offers to purchase 2,500 units at $16 each.
If the special offer is accepted, the units sold to Katherine would have to be produced with capacity that was otherwise going to be used to produce units sold to other customers.
Assuming Joseph Company is adopting a financial perspective, which of the following is
true regarding the decision of whether or not to accept Katherine’s special
order?
Q4. Jonathan Corporation makes an unassembled chair that sells
for $23. Product costs are $8 per chair. Lois, the product line manager,
suggests that Jonathan Corp. should instead sell an assembled chair, as revenues will be higher.
The market price for the assembled chair would be $27. The cost of additional assembly is $5.
If Jonathan Corporation adopts a financial perspective, which of the following is true?
Q5. Opal Company has multiple business units. Unit 1 has the following information:
Fixed expenses, which are mostly represented by shared capacity costs (e.g., rent, depreciation, etc. for the factory as a whole), are allocated evenly to business units.
Harry, a manager within Opal Company, is wondering whether Opal should drop Unit 1.
Assuming Harry is adopting a financial perspective, which of the following is true? (Check all that apply.)
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