ACC230 Exam 3

The payback capital budgeting technique considers:

neither time value of money, nor the income over the entire life of the project

7. Products G and H are joint products developed from the same process with each being processed further. Joint costs are incurred until splitoff, the separable costs are incurred in further refining each product. Sales values of G and H at splitoff are used to allocate joint costs. If the sales value of G at splitoff increases and all other costs and selling prices remain unchanged, joint costs allocated to:

G increases H decreases

Which of the following should not be considered for every option in the decision process?

Historical costs

The assumption that cash flows are reinvested at the rate earned by the investment belongs to which of the following capital budgeting methods?

Internal rate of return- yes net present value- no

For purposes of allocating joint costs to joint products, the sales value at splitoff method could be used in which of the following situations?

No cost beyond splitoff- yes cost beyond splitoff- yes

Under process costing and job costing, the accounting treatment for the normal spoilage is

Process costing- upon transfer, spoilage costs are transferred along with other costs. Job costing- manufacturing overhead control is charged.

In accounting for byproducts, the value of the byproduct may be recognized at the time of

Production & Sale

What is always the question to ask to determine if revenues or costs are relevant?

What difference will a particular action make?

Opportunity cost

a. Opportunity costs are considered period costs rather than inventoriable costs for accounting purposes. b. Opportunity costs must be considered by managers when making decisions. c. Opportunity cost plus the incremental future revenues and costs equal the relevant revenues and costs of any alternative when capacity is constrained.

The concept of outsourcing services to countries with lower labor costs is known as

d. international outsourcing

The sale of scrap from a manufacturing process usually would be recorded as a

decrease in manufacturing overhead control.

If the algebraic sum of the present values of all cash flows related to a proposed capital expenditure discounted at the company's required rate of return is positive, it indicates that the

return on the investment exceeds the company's required rate of return.