Exam 3 Managerial ACC

Which of the following is a non-financial measure of performance

Leadtime, set up time, number of units scrapped, all of these choices - all of these choices

Which of the following is an example of a mixed cost?

rental costs of $10,000 per month plus $0.30 per machine hour of use

Investment centers differ from profit centers, in that they

Are able to invest in assets

Methods that ignore present value in investment analysis include

Average rate of return and cash payback

The process of allocating available investments among investments options is

Capital rationing

Cost of scrap and rework are classified as

Internal failure cost

Which of the following methods of analyzing capital investments uses the concept of present value to compute a rate of return

Internal rate of return

Lean manufacturing reduces which of the following

Inventory, set up, and leadtime

Alternative investments, proposals, have different investment amounts, it is useful to use a ______ to rank them

Present value index

Which of the following is an example of value added time

Processing time

Which of the following is a non-added quality control activity

Providing service calls

In rationing, proposals, that survive, initial, and secondary screenings, are normally evaluated in terms of

Qualitative factors

Capital rationing uses, which of the following measures to determine the funding of projects

Ranking the proposals based on available funds

Which of the following is one of the reasons a company would undertake activity analysis?

To determine the cost of value-added activities

Which of the following normally appears on cost of quality report?

Total activity cost for each quality cost classification

The direct labor time variance is the difference between the

actual hours at the standard rate and the standard costs

Principal components of a master budget include

all of these choices

Which of the following would be used in preparing a cash budget for October?

all of these choices

Budgets need to be fair and attainable for employees to consider the budget important in their normal daily activities. Which of the followig situations will not lead to human behavior problems?

allowing employees the opportunity to be a part of the budget process

Costs that can be influenced by management at a specific level of management are called

controllable costs

As production increases, the fixed cost per unit

decreases

Under absorption costing, which of the following costs would be included in finished goods inventory?

direct labor, direct materials, and all factory overhead costs

The total manufacturing cost variance consists of

direct materials cost variance, direct labor cost variance, and factory overhead cost variance

Which of the following is non-value added lead time

Moving from process to process

The approach that requires the price to be less than the market price greater than the supplying divisions variable cost per unit is called the ______ approach

Negotiated cost

Which of the following is often referred to as the discounted cash flow method?

Net present value method

Which of the following would be the most appropriate cost driver allocating the service department cost of the payroll accounting department?

Number of payroll checks

Forde Co. has an operating leverage of 4. Sales are expected to increase by 12% next year. Operating income is

expected to increase by 48% Percent Change in Operating Income = Percent Change in Sales × Operating Leverage = 12% × 4 = 48%

The fact that workers are unable to meet a properly, determined, direct labor standard is sufficient cost to change the standard

false

Which of the following budgets allows for adjustments in activity levels?

flexible budget

Which of the following shows the possible decrease in sales that may occur before operating loss results?

margin of safety

Which of the following is value added activity

preventative maintenance

Which of the following is an accounting report that presents predicted amounts of the company's assets, liabilities, and equity as of the end of the budget period?

pro forma balance sheet

If the actual quantity of direct materials used in producing a commodity differs from the standard quantity, the variance is a ___ Variance

quantity

Budgets need to be fair and attainable for employees to consider the budget important in their normal daily activities. Which of the following situations will likely lead to human behavior problems?

setting goals too loosely, creating a budgetary slack

A favorable cost variance occurs when

standard costs are more than actual costs

Standard costs are divided into which of the following components?

standard price and standard quantity

Which of the following is an example of a cost that stays the same in total as the number of units produced changes?

straight-line depreciation on factory equipment

Contribution margin is

the excess of sales revenue over variable cost

If the actual direct labor hour spent producing a commodity differ from the standard hours, the variance is a ______ variance

time

A franchise fee is often expressed as a percent of revenue earned by the franchise

true

Although favorable, fixed factory, overhead volume variance are usually good news, if inventory levels are too high additional product production could be harmful

true

DMAIC stands for defined, measure, analyze, improve and control

true

The variance from standard for factory overhead, resulting from incurring a total amount of factory overhead cost that is greater or less than the amount budgeted for the level of operations achieved in termed, the variable factory overhead control variance

true

The unfavorable volume variance may be due to all of the following factors except

unexpected increases in the cost variable expenses

Which of the following generally provides the most useful reports for controlling costs?

variable costing

For a service business, the product can be

A service or customer being served, a borrower from a bank, a hospital admittance process, all of these these - All of these

Which of the following conditions normally would not indicate that standard costs should be revised?

Actual costs differed from standard costs for the preceding week.

A franchiser may provide support to the franchise in which of the following ways

All of these choices

Which of the following are the three common types of responsibility centers

Cost centers, profit center and investment center

Which of the following activities are both external failures?

Cost of warranty work and recalls

Which of the following is characteristics of a lean production layout

Decentralized, maintenance and small production batches

The total manufacturing cost variance consist of

Direct materials cost variance, direct labor cost variance, and factory overhead cost variance

The cost of warranty work for products that have been delivered to customers is classified as a(n)

External failure cost

The principle of exceptions allows managers to focus on correcting variances between

Standard cost and actual cost

A formal written statement of management's plans for the future, expressed in financial terms, is a

budget

A manager is responsible for cost, but not revenue is a (an)________ center.

cost

Operating expenses directly traceable to or incurred for the sole benefit of the specific department, and usually subject to the control of department manager are _____ expenses

direct operating

Assuming that the standard fixed overhead rate is based on full capacity, the cost of available but unused productive capacity is indicated by the

fixed factory overhead volume variance

In an investment center, the manager has a responsibility in the authority to make decisions that affect not only the cost and revenue, but also the plant assets invested in the center

true

Standard cost that are useful management tool that can be used solely as a statistical device apart from the ledger or can be incorporated in the accounts

true

Standard direct materials cost are determined by multiplying the standard price by the standard quantity

true

Standards or performance goals used to evaluate and control operations

true

The plant managers in a cost center can be held responsible for major differences between budgeted and actual costs in their plants

true

The right or license granted to an individual or group to market, another companies, goods or services is called a franchise

true