SB Exam 2
A company's margin of safety calculation is an indication of how closely the company is operating relative to __________ A. its breakeven point B. its fixed expenses C. its sales performance D. its operating income
A. its break even point
Direct costs pertain to costs that: A. are variable costs. B. are traceable to a cost object. C. are not traceable to a cost object. D. are commonly incurred.
B. are traceable to a cost object.
The difference between the inventory valuation as reported under LIFO and the amount that would have been reported under FIFO is called the: A. LIFO reserve B. cost of goods sold C. FIFO reserve D. gross profit
A. LIFO reserve
The term describing the contribution of a segment of an organization to the common fixed expenses and operating income of the organization is __________ margin. A. operating B. segment C. sales D. contribution
B. segment
The dividend payout ratio describes: A. the relationship of dividends per share to market price per share. B. dividends as a percentage of the price/earnings ratio. C. the proportion of earnings paid as dividends. D. the percentage change in dividends this year compared to last year.
C. the proportion of earnings paid as dividends.
The logical sequence of activities performed in the management planning and control cycle is
1. Planning 2. Managing 3. Controlling
Which of the following process steps occurs first for managers to observe costs for different organizational reference points? A. Cost accumulation B. Cost pooling C. Identifying cost objects D. Cost assignment
A. Cost accumulation
The entry to record the recognition of cost of goods sold is: A. Dr. Cost of Goods Sold Cr. Inventory B. Dr. Cost of Goods Sold Cr. Cash C. Dr. Loss on Inventory Obsolescence Cr. Inventory D. Dr. Cost of Goods Sold Cr. Accounts Receivable
A. Dr. Cost of Goods Sold Cr. Inventory
Which of the following product cost components will not need "flexing" when analyzing end of period production cost variances? A. Fixed manufacturing overhead. B. Direct labor. C. Variable manufacturing overhead. D. Direct material.
A. Fixed manufacturing overhead.
Identify a subtotal that is reported in a multiple-step income statement. A. Income before taxes B. Other income, net C. Provision for income taxes D. Cost of products sold
A. Income before taxes
The LIFO reserve is the difference between the inventory valuation as reported under: A. LIFO and the amount that would have been reported under FIFO. B. LIFO and the amount that would have been reported under weighted-average. C. FIFO and the amount that would have been reported under LIFO. D. weighted-average and the amount that would have been reported under LIFO.
A. LIFO and the amount that would have been reported under FIFO.
Which of the following statements does not describe a characteristic of management accounting? A. Management accounting must conform to GAAP. B. Management accounting is more concerned with units of the organization rather than with the organization as a whole. C. Approximate amounts rather than accurate amounts or refined estimates are often used in management accounting. D. Management accounting places a great deal of emphasis on the future.
A. Management accounting must conform to GAAP.
Which of the following manufacturing environments would use a job order costing system? A. Textbook printing B. Oil and gas refining C. Corn processing D. Coal mining
A. Textbook printing
Most entities satisfy the accounting criteria for recognizing an expense when: A. a cost is incurred in the revenue generating process. B. a commitment is made to purchase a product or service. C. a dividend is paid to stockholders. D. cash is paid to a supplier.
A. a cost is incurred in the revenue generating process.
Management's use of resources can best be evaluated by focusing on measures of: A. activity. B. leverage. C. liquidity. D. book value.
A. activity.
When evaluating the performance of a cost center, the appropriate measurement technique would be: A. actual costs incurred compared to budgeted costs. B. actual segment margin compared to budgeted segment margin. C. comparison of actual and budgeted return on investment (ROI) based on segment margin and assets controlled by the segment. D. none of the answers are correct.
A. actual costs incurred compared to budgeted costs.
An unfavorable materials usage variance would occur if: A. actual pounds of materials used was greater than the standard pounds allowed. B. less material is purchased than is used. C. actual pounds of materials used were less than the standard pounds allowed. D. actual labor hours used was greater than the standard labor hours allowed.
A. actual pounds of materials used was greater than the standard pounds allowed.
A company desiring to increase its total asset turnover could do so by using: A. an accelerated depreciation method and the LIFO cost flow assumption. B. the straight-line depreciation method and the LIFO cost flow assumption. C. the straight-line depreciation method and the FIFO cost-flow assumption. D. an accelerated depreciation method and the FIFO cost flow assumption.
A. an accelerated depreciation method and the LIFO cost flow assumption.
Relevant costs in decision-making: A. are future costs that represent differences between decision alternatives. B. result from past decisions. C. should not influence the decision. D. none of the answers are correct.
A. are future costs that represent differences between decision alternatives.
Direct costs describe costs that: A. are traceable to a cost object B. are not traceable to a cost object C. have fixed cost behavior D. have variable cost behavior
A. are traceable to a cost object
The term to describe the concept that costs increase or decrease with changes in the volume of activity is known as A. cost behavior B. cost incurrence C. cost classification D. cost avoidance
A. cost behavior
A segmented income statement in the preferred format uniquely emphasizes: A. direct and common fixed costs B. variable and fixed costs C. operating expenses and fixed costs D. variable costs and operating expenses
A. direct and common fixed costs
The principal objective of a performance report is to: A. highlight activities that need management attention. B. direct blame to those managers who did not meet goals. C. provide a basis for rewarding effective managers. D. highlight budgets that have been incorrectly established.
A. highlight activities that need management attention.
Revenue may be recognized: A. if a company trades inventory at its usual selling price for newspaper advertising. B. if management believes the market value of land held for future development has increased during the year. C. from the sale of a company's own common stock. D. in 2019 from the sale of subscriptions of a magazine to be published in 2020.
A. if a company trades inventory at its usual selling price for newspaper advertising.
The gross profit ratio is useful to the manager for each of the following purposes except that: A. it can be used to estimate the amount of operating expenses for a period. B. it can be used to determine the amount available from a given amount of revenue to cover operating expenses. C. it can be used to estimate the amount of inventory lost in a fire. D. it can be used to determine the selling price to set for an item.
A. it can be used to estimate the amount of operating expenses for a period.
The higher a firm's contribution margin ratio, the greater its operating A. leverage B. income C. loss D. expenses
A. leverage
Managerial accounting, as opposed to financial accounting, is primarily concerned with: A. present and future planning and control. B. historical results of operations. C. providing information to investors and creditors. D. preparing the current balance sheet of the company.
A. present and future planning and control.
An example of a product cost is: Multiple choice question. A. production line maintenance costs B. interest expense on a company loan C. advertising expense for the product D. a portion of the president's salary
A. production line maintenance costs
Income from operations is: A. sometimes used instead of net income in the ROI calculation. B. the same thing as net income and sometimes called the "bottom line. C. "usually calculated after income tax expense. D. usually used instead of net income in the ROE calculation.
A. sometimes used instead of net income in the ROI calculation.
Earnings multiple is another term used to describe the price/earnings ratio. This term merely reflects that: A. the market price of stock is equal to the earnings per share multiplied by the P/E ratio. B. the book value of stock is equal to the earnings per share multiplied by the P/E ratio. C. the market price of stock is equal to the earnings per share divided by the P/E ratio. D. the market price of stock is equal to the dividends per share multiplied by the P/E ratio.
A. the market price of stock is equal to the earnings per share multiplied by the P/E ratio.
When comparing a controllable cost and a noncontrollable cost, the key difference is: A. the short term ability to influence the cost by the manager. B. the recurring nature of the cost. C. whether the cost is fixed or variable. D. the significant dollar amount of the cost.
A. the short term ability to influence the cost by the manager.
Identify a subtotal that is reported in a multiple-step income statement. A. Other income, net B. Income before taxes C. Provision for income taxes D. Cost of products sold
B. Income before taxes
Managerial accounting provides information for: A. Generally accepted accounting principles B. Planning, control, and decision-making C. Preparing an organization's balance sheet D. Publishing an organization's income statement
B. Planning, control, and decision-making
Which of the following is another term for mixed costs? A. Semifixed costs. B. Semivariable costs. C. Component costs. D. None of the answers are correct.
B. Semivariable costs.
The major difference between the indirect and the direct method of a statement of cash flows appears in which of the following activities section(s)? A. The investing activities and financing activities sections. B. The operating activities section only. C. The investing activities section only. D. The operating activities and financing activities sections.
B. The operating activities section only.
The term, "realization," in revenue recognition refers to which of the following? A. The entity has completed, or substantially completed, the activities it must perform to be entitled to the revenue benefits. B. The product or service has been exchanged for cash, claims to cash, or an asset that is readily convertible to a known amount of cash or claims to cash. C. The entity has received an irrevocable order for goods or services. D. Cash has been received with an irrevocable order for goods or services.
B. The product or service has been exchanged for cash, claims to cash, or an asset that is readily convertible to a known amount of cash or claims to cash.
Using the high-low method produces a cost formula for expressing the total of a mixed cost at any level of activity, which is A. Total cost = Fixed cost - Variable cost B. Total cost = Fixed cost + (Variable rate x Volume of activity) C. Total cost = Fixed cost x Variable rate D. Total cost = Fixed cost x Volume of activity
B. Total cost = Fixed cost + (Variable rate x Volume of activity)
A fixed manufacturing overhead variance caused by the actual activity being different from the estimated activity used in calculating the predetermined overhead application rate is called: A. an efficiency variance B. a volume variance C. a spending variance D. a budget variance
B. a volume variance
When developing standards of performance, the type of standard that is most useful for planning and control is: A. a logical standard. B. an attainable standard. C. a negotiated standard. D. a past performance standard.
B. an attainable standard.
A performance report for direct labor shows a variance between the budget and actual amounts. This difference is a: A. direct labor efficiency variance. B. budget variance. C. direct labor spending variance. D. direct labor rate variance.
B. budget variance.
When considering the decision for solving product mix problems involving multiple products and scarce production resources, the decision should focus on: A. contribution margin of each product Reason: B. contribution margin per unit of scarce resource C. operating income of each product D. variable and fixed cost of each product
B. contribution margin per unit of scarce resource
A management activity in the planning and control cycle that compares actual performance with planned activity is known as: A. decision making B. controlling C. planning D. managing
B. controlling
The difference between absorption costing and direct (or variable) costing is in the accounting for: A. direct labor B. fixed manufacturing overhead C. direct materials D. variable manufacturing overhead
B. fixed manufacturing overhead
Capital budgeting is different than operational budgeting because of the long-term time frame of the capital budget. Therefore, capital budgeting A. is a budgeting process that involves only the financial staff B. focuses on the present value of cash flows from investments C. focuses on long-term liabilities D. is prepared on a continuous budget time frame
B. focuses on the present value of cash flows from investments
Relevant costs in short-run decisions are A. costs that result from past decisions B. future costs that represent differences between decision alternatives C. costs that do not influence the decision D. common costs arbitrarily assigned to products or activities
B. future costs that represent differences between decision alternatives
The scattergram allows cost-volume relationships to be visually scanned for outlier observations that should be: A. included in the calculation of the cost formula of a mixed cost. B. ignored in the calculation of the cost formula of a mixed cost. C. included in the calculation of the fixed cost component of the mixed cost. D. included in the calculation of the variable rate component of the mixed cost.
B. ignored in the calculation of the cost formula of a mixed cost.
The manufacturing overhead component of a product's cost: A. can only be determined at the end of the year when actual costs and actual production quantities are known. B. includes all manufacturing costs except those for raw materials and direct labor. C. is likely to be the same amount for every product made by the company. D. is the sum of the actual overhead costs incurred while manufacturing the product.
B. includes all manufacturing costs except those for raw materials and direct labor.
If all units produced during March are sold, and there is no change in the number of units in the beginning finished goods inventory, then: A. ending work in process inventory will increase with absorption costing. B. income determined with absorption costing will equal income determined with direct costing. C. income determined with absorption costing will be higher than income determined with direct costing. D. ending finished goods inventory will increase.
B. income determined with absorption costing will equal income determined with direct costing.
Simplifying assumptions identified for the use of cost behavior pattern data include: A. relevant range and liquidity. B. linearity and relevant range. C. fixed activity and linearity. D. fixed range and variability.
B. linearity and relevant range.
Rotablade's net income was $600,000 on sales of $24 million for the year. Average assets for the year were $8 million. For the year: A. margin was 4%, turnover was 2.0, and ROI was 8%. B. margin was 2.5%, turnover was 3.0, and ROI was 7.5% C. margin was 2.5%, turnover was 2.0, and ROI was 5%. D. margin was 4%, turnover was 3.0, and ROI was 12%.
B. margin was 2.5%, turnover was 3.0, and ROI was 7.5%
Using a flexible budget is necessary to: A. revise budget goals at the beginning of a period. B. permit a more accurate determination of variances. C. adjust budgeted results so they are closer to actual amounts. D. eliminate the effect of cost behavior patterns on budgeted amounts.
B. permit a more accurate determination of variances.
A firm calculates the average contribution margin ratio when _____ A. the firm incurs more expenses than revenues B. the firm sells more than one product C. the firm's average revenue is more than the total current liabilities D. the firm's going concern becomes an issue
B. the firm sells more than one product
Under most circumstances, in order to recognize revenue: A. the entity must have paid for all expenses incurred in generating the revenue. B. the revenue must be realized or realizable, and earned. C. cash must have been received. D. the entity must expect to receive cash in the future.
B. the revenue must be realized or realizable, and earned.
The sequence of functions and related activities that, over the life of a product or service, can ultimately make a difference to the customer are: A. the strategic cost initiatives. B. the value chain. C. the value processes. D. the chain of production events.
B. the value chain.
ABU Co. has several products, each with a different contribution margin ratio. If the same number of units were sold in July as in June, but the sales mix changed: A. operating income would be the same in June and July. B. total contribution margin in July would be different from that in June. C. the company's overall contribution margin ratio would be the same in June and July. D. fixed expenses in July would be in a different relevant range than in June.
B. total contribution margin in July would be different from that in June.
The portion of the budget variance for variable overhead due to the difference between actual hours required and standard hours allowed for the work done is called the: A. variable overhead volume variance. B. variable overhead efficiency variance. C. variable overhead spending variance. D. variable overhead price variance.
B. variable overhead efficiency variance.
A predetermined overhead application rate is established to apply manufacturing overhead to __________. A. cost of goods sold B. work in process C. finished goods D. raw materials
B. work in process
How is performance evaluated for an investment center? A. Actual costs incurred compared to budgeted costs. B. Actual segment margin compared to budgeted segment margin. C. Comparison of actual and budgeted return on investment (ROI) based on segment margin and assets controlled by the segment. D. None of the answers are correct.
C. Comparison of actual and budgeted return on investment (ROI) based on segment margin and assets controlled by the segment.
The entry typically recorded when revenues are earned is: A. Dr. Cash (or Land or Buildings) Cr. Sales (or Service Revenue) B. Dr. Inventory Cr. Sales (or Service Revenue) C. Dr. Cash (or Accounts Receivable) Cr. Sales (or Service Revenue) D. Dr. Cash (or Accounts Receivable) Cr. Sales (or Common Stock)
C. Dr. Cash (or Accounts Receivable) Cr. Sales (or Service Revenue)
The inventory accounts for a manufacturing company would NOT include: A. Raw materials. B. Finished goods. C. Manufacturing overhead. D. Work-in-process.
C. Manufacturing overhead.
The major difference between the indirect and the direct method of a statement of cash flows appears in which of the following activities section(s)? A. The operating activities and financing activities sections. B. The investing activities and financing activities sections. C. The operating activities section only. D. The investing activities section only.
C. The operating activities section only.
A fixed manufacturing overhead variance caused by the difference between the actual fixed overhead expenditures and the fixed overhead that was budgeted for the period is called: A. a spending variance B. an efficiency variance C. a budget variance D. a volume variance
C. a budget variance
Most entities satisfy the accounting criteria for recognizing revenue when: A.an order is received from a customer. B. an unearned revenue account is credited. C. a product is delivered or a service is provided. D. cash is received from a customer.
C. a product is delivered or a service is provided.
If the net standard costing variance of a business is significantly relevant to the total production cost, the net variance should be: A. ignored B. assigned to cost of goods sold C. allocated between WIP and FG inventories and cost of goods sold D. treated as an adjustment to manufacturing overhead
C. allocated between WIP and FG inventories and cost of goods sold
If the net standard costing variance of a business is considered immaterial to the total production cost, the net variance should be: A. allocated between WIP and FG inventories and cost of goods sold B. This method would be used for significant variances. C. assigned to cost of goods sold D. treated as an adjustment to manufacturing overhead
C. assigned to cost of goods sold
When considering the decision for solving product mix problems involving multiple products and scarce production resources, the decision should focus on A. contribution margin per unit of scarce resource B. operating income of each product C. contribution margin of each product D. variable and fixed cost of each product
C. contribution margin of each product
When the periodic inventory system is used: A. the inventory account is adjusted on a daily basis throughout the year as inventory items are purchased and sold. B. operating profit from the sale of an item from inventory is known when the item is sold. C. cost of goods sold can be calculated by subtracting the ending inventory amount from the sum of beginning inventory and net purchases. D. gross profit from the sale of an item from inventory is known when the item is sold.
C. cost of goods sold can be calculated by subtracting the ending inventory amount from the sum of beginning inventory and net purchases.
Working capital refers to the excess of a firm's: A. total assets over its total liabilities. B. current assets over its total liabilities. C. current assets over its current liabilities. D. cash and accounts receivable over its accounts payable and other accrued liabilities.
C. current assets over its current liabilities.
When considering two decision alternatives, _____________ costs are those costs that would result from selecting one alternative instead of the other. A. sunk B. irrelevant C. differential D. allocated
C. differential
Another term for the price/earnings ratio is: A. sales multiple. B. profit ratio. C. earnings multiple. D. cost ratio.
C. earnings multiple.
Trend analysis of ratios: A. is simply the relationship between two numbers B. is not usually very meaningful because the definitions of the ratio components are always changing C. is a meaningful comparison despite the use of different financial accounting alternatives to develop the data used in the ratios D. involves the comparison of an individual company's ratio with the comparable industry average
C. is a meaningful comparison despite the use of different financial accounting alternatives to develop the data used in the ratios
A firm's liquidity refers to: A. the excess of its total assets over its total liabilities. B. the cash available to pay its current liabilities as they become due. C. its ability to meet its current obligations as they become due. D. the excess of its cash and accounts receivable over its accounts payable and other accrued liabilities.
C. its ability to meet its current obligations as they become due.
A capital budget provides the organization an overall blueprint to help the organization meet its A. annual profit and strategic plans B. operating budget goals C. long-term growth and profitability objectives D. relevant costing objectives
C. long-term growth and profitability objectives
A relative measure of risk that describes a company's current sales performance in relation to its break-even sales is called the _____ A. DuPont point B. operating leverage C. margin of safety D. breakeven point
C. margin of safety
United Machining's margin was 2% and turnover was 3.0 on sales of $60 million for the year. On the basis on this information: A. net income for the year was $3,600,000, average assets were $20 million, and ROI was 2%. B. net income for the year was $3,600,000, average assets were $10 million, and ROI was 6%. C. net income for the year was $1,200,000, average assets were $20 million, and ROI was 6%. D. net income for the year was $1,200,000, average assets were $10 million, and ROI was 2%.
C. net income for the year was $1,200,000, average assets were $20 million, and ROI was 6%.
The first caption in most income statements in annual reports is: A. sales, less sales returns and allowances. B. earned revenues. C. net sales. D. gross sales.
C. net sales.
An example of a cost that is noncontrollable in the short run is: A. direct labor B. sales commissions C. property taxes D. raw materials
C. property taxes
The primary purpose of the statement of cash flows is to _____. A. predict the future cash flows from nonoperating activities B. measure a company's revenues, expenses, gains, or losses at a single point in time C. provide relevant information about the cash receipts and cash payments of an enterprise during a period D. show the market value of a company's assets and liabilities
C. provide relevant information about the cash receipts and cash payments of an enterprise during a period
Cost accounting _____. A. need not be flexible enough to provide answers to support the broad array of managerial questions for decision making purposes B. fails to play any role in the inventory valuation aspects of financial accounting C. relates primarily to the accumulation and determination of product, process, or services costs D. focuses only on providing information to stockholders and creditors of an organization
C. relates primarily to the accumulation and determination of product, process, or services costs
Asset turnover calculations: A. are made by dividing the average asset balance during the year by the sales for the year. B. communicate information about how promptly the entity pays its bills. C. should be evaluated by observing the turnover trend over a period of time. D. are made by dividing sales for the year by the asset balance at the end of the year.
C. should be evaluated by observing the turnover trend over a period of time.
In the statement of cash flows, an increase in the accounts receivable balance from the beginning of the period to the end of the period would be: A. subtracted from net income because this represents revenues that have not yet been earned or provided by investing activities. B. added to net income because this means that revenues earned and included within net income were less than the cash collected. C. subtracted from net income because this means that revenues earned and included within net income were more than the cash collected. D. added to net income because this represents revenues that have been earned but not yet collected.
C. subtracted from net income because this means that revenues earned and included within net income were more than the cash collected.
Recognition of revenue in accrual accounting requires: A. that cash be received. B. only that a product be delivered or a service be performed. C. that the revenue be realized or realizable, and earned. D. only that the amount of cash to be received from the sale of a product or service be known.
C. that the revenue be realized or realizable, and earned.
Product costs are inventoried and treated as assets until: A. the next accounting period. B. related liabilities no longer exist. C. the period in which the products they relate to are sold. D. none of the answers are correct.
C. the period in which the products they relate to are sold.
Which of the following will cause income determined with absorption costing to be higher than income determined with direct costing? A. income determined with absorption costing will always equal income determined with direct costing. B. units produced equal units sold. C. units produced are greater than units sold. D. units produced are less than units sold.
C. units produced are greater than units sold.
Mechforce Manufacturing's net income was $420,000 on sales of $14 million. Average assets for the year were $10 million. Turnover for the year was: A. 3.0% B. 4.2% C. 1.8 D. 1.4
D. 1.4
The entry to record the recognition of cost of goods sold is: A. Dr. Cost of Goods Sold Cr. Cash B. Dr. Cost of Goods Sold Cr. Accounts Receivable C. Dr. Loss on Inventory Obsolescence Cr. Inventory D. Dr. Cost of Goods Sold Cr. Inventory
D. Dr. Cost of Goods Sold Cr. Inventory
Which of the following accounts/captions are not included in the calculation of Gross Profit? A. Cost of Goods Sold. B. All of these accounts/captions are included in the calculation of Gross Profit. C. Net Sales. D. General and Selling Expenses.
D. General and Selling Expenses.
Which of the following accounts/captions are not included in the calculation of Gross Profit? A. Cost of Goods Sold. D. All of these accounts/captions are included in the calculation of Gross Profit. C. Net Sales. D. General and Selling Expenses.
D. General and Selling Expenses.
When analyzing capital expenditures, the time value of money concept implies dollar received today is worth the same as A. a dollar received five years from today B. a dollar received today is worth less than a dollar received five years from today C. the value of money is timeless D. a dollar received today is worth more than a dollar received five years from today
D. a dollar received today is worth more than a dollar received five years from today
The relevant range assumption relating to fixed costs refers to A. a firm's range of profitability B. a firm's range of rates of return C. a firm's range of sales D. a firm's range of activity
D. a firm's range of activity
Most entities satisfy the accounting criteria for recognizing revenue when: A. cash is received from a customer. B. an order is received from a customer. C. an unearned revenue account is credited. D. a product is delivered or a service is provided.
D. a product is delivered or a service is provided.
In order to achieve higher quality cost information from the assignment of overhead costs to products manufactured, the use of a predetermined overhead rate is being replaced by: A. absorption costing. B. process costing. C. job order costing. D. activity-based costing.
D. activity-based costing.
The performance of an investment center is determined by comparing: A. actual costs incurred to budgeted costs. B. actual segment margin to budgeted segment margin. C. actual contribution margin to budgeted contribution margin. D. actual and budgeted ROI based on segment margin and assets controlled by the segment.
D. actual and budgeted ROI based on segment margin and assets controlled by the segment.
The concept of matching revenue and expense refers to the fact that: A. expenses incurred during a period equal the revenues earned during the period. B. all costs incurred in the process of earning revenues during a period are deferred and expensed in a future period. C. all cash disbursements during a period are subtracted from all cash receipts during the period. D. all costs incurred in the process of earning revenues during a period are recorded as expenses in that period.
D. all costs incurred in the process of earning revenues during a period are recorded as expenses in that period.
The difference between standard and actual cost per unit of input is measured by: A. the raw materials price variance. B. the direct labor rate variance. C. the variable overhead spending variance. D. all of the answers are correct.
D. all of the answers are correct.
A predetermined overhead rate is used to: A. assign selling expenses to units produced. B. keep track of actual overhead costs. C. assign direct costs to units produced. D. assign indirect costs to units produced.
D. assign indirect costs to units produced.
A high-level integrated approach to measuring and reporting organizational performance is accomplished by using a: A. segmented income statement B. return on investment analysis C. DuPont performance analysis D. balanced scorecard
D. balanced scorecard
The decision for solving production mix problems involving multiple products and scarce production resources should focus on: A. gross profit of each product. B. contribution margin of each product. C. sales price of each product. D. contribution margin per unit of scarce resource.
D. contribution margin per unit of scarce resource.
When the high-low method of estimating a cost behavior pattern is used: A. the highest and lowest sales price and volume amounts are used in the calculation. B. the direct result of the high-low calculations is the fixed expense amount. C. the resulting cost formula will explain total cost accurately for every value between the high and low volumes. D. cost and volume data must be reviewed for outliers.
D. cost and volume data must be reviewed for outliers.
Cost behavior refers to: A. costs that are both good and bad. B. costs that increase at a quicker rate than others. C. costs that decrease at a quicker rate than others. D. costs that are variable or fixed. E. none of the answers are correct.
D. costs that are variable or fixed.
When management considers a capital budgeting expenditure, present value analysis most accurately informs the decision process; however: A. a qualitative analysis could distort the outcome in close decisions B. the accounting rate of return method could be more dependable C. the payback method may be even more perceptive D. decisions are significantly influenced by top management's values and experiences
D. decisions are significantly influenced by top management's values and experiences
An example of a cost that is controllable in the short run is: A. depreciation on plant and equipment B. real estate taxes C. interest on long-term debt D. direct labor
D. direct labor
The three components of product costs are: A. manufacturing overhead, indirect material, indirect labor. B. direct labor, manufacturing overhead, indirect material. C. direct material, supervisor salaries, selling expenses. D. direct material, direct labor, manufacturing overhead.
D. direct material, direct labor, manufacturing overhead.
A common size income statement: A. is useful in estimating the impact of inflation. B. makes comparisons between years more difficult. C. uses the same dollar amount of net sales for each year. D. expresses items as a percentage of net sales.
D. expresses items as a percentage of net sales.
Trend analysis: A. is simply the relationship between two numbers, and the name of the trend usually describes the numbers to be related. B. gives meaningful results only when the company does not own any fixed assets. C. is the only meaningful way to understand the financial position and results of operations of a company. D. for a company over several years generally leads to a more meaningful analysis than does the observation of a single year's ratio result.
D. for a company over several years generally leads to a more meaningful analysis than does the observation of a single year's ratio result.
Revenue may be recognized: A. if management believes the market value of land held for future development has increased during the year. B. from the sale of a company's own common stock. C.in 2019 from the sale of subscriptions of a magazine to be published in 2020. D. if a company trades inventory at its usual selling price for newspaper advertising.
D. if a company trades inventory at its usual selling price for newspaper advertising.
The inventory turnover calculation: A. is wrong unless sales is used in the numerator. B. requires knowledge of the inventory cost flow assumption being used. C. is wrong unless cost of goods sold is used in the numerator. D. is an alternative way of expressing the number of days' sales in inventory.
D. is an alternative way of expressing the number of days' sales in inventory.
The ratios used to facilitate the interpretation of an entity's financial position and results of operations can be grouped into four (4) categories: A. liquidity, activity, common size, and profitability B. liquidity, profitability, debt, and per share C. activity, productivity, debt, and cash flow D. liquidity, activity, profitability, and debt
D. liquidity, activity, profitability, and debt
The primary purpose of the statement of cash flows is to _____. A. predict the future cash flows from nonoperating activities B. show the market value of a company's assets and liabilities C. measure a company's revenues, expenses, gains, or losses at a single point in time D. provide relevant information about the cash receipts and cash payments of an enterprise during a period
D. provide relevant information about the cash receipts and cash payments of an enterprise during a period
The statement of cash flows _____. A. accurately predicts a company's future cash flows from operating, investing, and financing activities B. primarily aims at assessing a company's profitability C. reports net income or net loss of a company at a particular point in time D. shows why cash changed during a period by reporting net cash provided or used by operating, investing, and financing activities
D. shows why cash changed during a period by reporting net cash provided or used by operating, investing, and financing activities
The statement of cash flows _____. A. primarily aims at assessing a company's profitability B. reports net income or net loss of a company at a particular point in time C. accurately predicts a company's future cash flows from operating, investing, and financing activities D. shows why cash changed during a period by reporting net cash provided or used by operating, investing, and financing activities
D. shows why cash changed during a period by reporting net cash provided or used by operating, investing, and financing activities
Recognition of revenue in accrual accounting requires: A. that cash be received. B. only that a product be delivered or a service be performed. C. only that the amount of cash to be received from the sale of a product or service be known. D. that the revenue be realized or realizable, and earned.
D. that the revenue be realized or realizable, and earned.
An entity's current ratio will be influenced by: A. writing off an overdue account receivable against the allowance for uncollectible accounts. B. issuance of a stock dividend. C. the depreciation method used. D. the inventory cost flow assumption used.
D. the inventory cost flow assumption used.
