Accounting Final
A manager of an investment center is most likely to be evaluated using a:
financial measure such as residual income.
Which of the following is an example of a batch-level activity?
setting up machines(# of units doesnt matter)
Opportunity costs are always:
relevant costs
Advantage of Decentralization
-It delegates day-to-day problem solving to lower-level managers, thereby enabling top-level managers to concentrate on overall strategy. -It empowers lower-level managers to make decisions based on up-to-date information about day-to-day operations. -It eliminates layers of decision making and approvals so that organizations can respond more quickly to customers and changing circumstances.
True statements regarding that budgeted income
-Its net income will impact the ending retained earnings balance shown on the balance sheet. -Its interest expense flows from the financing section of the cash budget. -Its selling and administrative expenses may include depreciation expense.
LRV
AH(AR-SR)
VMRV
AH(AR-SR)
MPV
AQ(AP - SP)
The costs of testing and inspecting incoming raw materials would be classified as what type of quality cost?
Appraisal costs
In variable costing, a complete definition of unit product cost includes:
Direct materials, direct labor, and variable manufacturing overhead.
Learning & Growth
Employee absenteeism rate, Average number of workplace accidents per employee, Average training hours per employee, number of job applicants from under-represented groups, Average mentorship hours per employee
Which of the following statements is false regarding service department charges to operating departments?
Fixed costs should be charged to operating departments by multiplying a predetermined rate by the actual quantity of the service used.
Which of the following choices is true with respect to delivery cycle time?(wait time and queue time)
Includes both
A document that records the materials, labor, and manufacturing overhead charged to a specific job is called a:
Job cost sheet.
External Failure Cost
Product recalls, Cost of field servicing, Warranty repairs, Returns and allowances arising from poor quality, Warranty replacements. Costs are incurred because poor quality of conformance has occurred
Which of the following statements best describes a viable approach for reducing the cost of quality?
Making additional investments in prevention activities with the goal of realizing even larger reductions in external failure costs.
Appraisal Cost
Product testing, Inspection of goods, Depreciation of test equipment, Field testing at customer site
Which of the following measures would most likely appear in the balanced scorecard of a company focused on provided an operational excellence customer value proposition?
Manufacturing cycle efficiency (MCE)
ROI
Margin x Turnover
Residual Income
NOI - (Avg. Operating Assets x Minimum Required Rate of Return%)
margin
NOI / Sales
Which of the following choices is true with respect to manufacturing cycle efficiency (MCE)? (wait time and inspection time)
No wait time but Yes to inspection time
OEE
utilization rate x efficiency rate x quality rate
Which of the following financial measures would best be described as a type of profitability ratio?
Return on equity
Internal Failure Cost
Rework labor and overhead, Downtime caused by defects, Net cost of scrap, Disposal of production defects
MQV
SP(AQ-SQ)
LEV
SR(AH-SH)
VMEV
SR(AH-SH)
Gross Margin =
Sales - COGS
Contribution Margin =
Sales - Variable Expenses
Turnover
Sales / Average Operating Assets
On a cost-volume-profit (CVP) graph, the vertical distance between the total sales line and the total expense line represents which of the following?
The profit or loss
If a company has underapplied overhead, then the journal entry to dispose of it could possibly include:
a debit to Cost of Goods Sold.
Efficiency rate
actual run rate / ideal run rate
utilization rate
actual run time / machine time available
Quality rate
defect-free output / total output
Assume that a company in the process of creating a balanced scorecard noted that "customers are complaining about excessive delays with respect to receiving what they ordered." Which of the following measures would be most appropriate to include in a balanced scorecard in an effort to track improvement with respect to this concern?
delivery cycle time
The costs of spoilage and scrap would be classified as what type of quality cost?
internal failure costs
In the equation, y = a + bX, the X represents:
level of activity
On CVP graph, vertical distance between total expense line and fixed expense line represents
the total variable expenses
MCE
process time / throughput time
Advantages of self-imposed budgets
-They are often more accurate than estimates prepared by top managers because front-line workers have more intimate knowledge of day-to-day operations. -They generally increase motivation by allowing people to participate in setting their own goals. -They recognize individuals at all levels of the organization as members of the team whose views are valued by top management.
Which of the following statements is false? 1. The sum of the segment margins earned by all of a company's business segments will equal the company's overall net operating income. 2. Contribution margin − Traceable fixed expenses = segment margin. 3. Traceable fixed costs can become common fixed costs depending on how the segments are defined. 4. A segment's traceable fixed costs will disappear over time if the segment is eliminated.
1. The sum of the segment margins earned by all of a company's business segments will equal the company's overall net operating income.
Which of the following statements is false regarding absorption costing? 1. It assigns all manufacturing costs, both fixed and variable, to units of product. 2. It treats all nonmanufacturing costs as period costs. 3. It is typically used for external financial reporting. 4. It relies on a predetermined overhead rate to apply direct material cost to units of product.
4. It relies on a predetermined overhead rate to apply direct material cost to units of product.
Which of the following statements is false? 1. Conversion costs include manufacturing overhead. 2. Prime costs include direct labor. 3. Conversion costs include direct labor. 4. Prime costs include manufacturing overhead.
4. Prime costs include manufacturing overhead.
Which of the following measures would most likely appear in the Customer perspective of a company's balanced scorecard?
Customer defection rate
Customer
Customer defection rate, Percent of customers that strongly agree with the statement "Your employees treated me courteously.", percent of customers that strongly agree with the statement "Your company has a superior commitment to product safety.", number of customer referrals
In variable costing, a complete definition of unit product cost includes
DM, DL, and VMOH
Assume that a company in the process of creating a balanced scorecard noted that "customers are returning too many defective products." Which of the following measures would be most appropriate to include in a balanced scorecard in an effort to track improvement with respect to this concern?
Defect-free units as a percentage of completed units
Internal Business Process
Delivery cycle time, Number of modular product designs, Lost sales due to out-of-stock merchandise, Pounds of waste produced
The total manufacturing costs added to production within a schedule of cost of goods manufactured is calculated using which of the following equations?
Direct materials used in production + Direct labor + Manufacturing overhead applied to work in process
Which of the following measures would most likely appear in the balanced scorecard of a company focused on provided a product leadership customer value proposition?
Number of new products designed
Assume that a company in the process of creating a balanced scorecard noted that "our employees are not generating enough ideas to help improve what we do." Which of the following measures would be most appropriate to include in a balanced scorecard in an effort to track improvement with respect to this concern?
Number of process improvement suggestions per employee
When the units produced exceed the units sold, which of the following equations explains the difference between absorption costing and variable costing net operating income?
Number of units deferred in ending inventory × fixed manufacturing overhead cost per unit
Which of the following measures would managers hope to see decreasing over time?
Number of warranty claims
Which of the following financial measures reflects investors' perceptions of the company's performance and its future prospects?
Price-earnings ratio
Prevention Cost
Quality circles, Quality engineering, Statistical process control, technical support to suppliers, Systems development, Quality training. Costs are incurred in an effort to keep poor quality of conformance from occurring
Cost classifications used for decision making include:
Relevant and irrelevant cost.
Finacial
Sales from new customers, Average fuel cost per sales dollar, Return on assets, Residual income
T or F: A flexible budget is an estimate of what revenues and costs should have been given the actual level of activity for the period.
T
In a cost-volume-profit (CVP) graph, the intersection of the total sales line and the total expense line represents which of the following?
The break-even point
Assumption of Cost volume profit analysis
Total FC are constant within the relevant range Selling price is constant Variable Costs per unit are constant
T or F: Traditional cost systems usually overcost high volume products and undercost low volume products when compared to activity-based costing systems.
True
transfer price
Variable cost per unit + (Total contribution margin on lost sales(per unit x lost sales units) / Number of units transferred)
Which of the following is an example of a product-level activity?
advertising products(# product lines)
A responsibility center is best described as:
any part of an organization whose manager has control over and is accountable for cost, profit, or investments.
Which of the following is an example of a unit-level activity?
assembling products(have to do for each unit)
Every decision involves choosing between:
at least two alternatives
Overapplied or underapplied overhead is computed:
at the end of the period.
throughput time
process time + inspection time + move time + queue time
A manager of a cost center is most likely to be evaluated using a:
variance analysis performance report.
Delivery Cycle Time
wait time + throughput time
