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1 GB 519 Final Practice Exam FOR MORE CLASSES VISIT 1. Question : A strategy map is: Question 2. Question : Which of the following aspects of the contemporary business environment involves using statistical methods such as regression or correlation analysis to predict consumer behavior, to measure customer satisfaction, or to develop models for setting prices,among other uses? Question 3. Question : If finished goods inventory has increased during the period, which of the following is always true? Question 4. Question : Which of the following is not a contemporary management technique used by the management accountant to focus on process

2 improvement? Question 5. Question : All of the following are required resources for cost leadership except: Question 6. Question : Assume the following information pertaining to a Company: Prime costs = $195,000 Conversion Costs = $221,000 Direct Materials used = $85,000 Beginning Work-in-Process = $98,000 Ending Work-in-Process = $81,000 Direct labor used is calculated to be: Question 7. Question : Tierney Construction, Inc. recently lost a portion of its financial records in an office theft. The following accounting information remained in the office files:

3 COGS = $80,000 Question 8. Question : The sum of units transferred out and ending inventory units, assuming no spoilage, determines: Question 9. Question : The journal entry to record finished product units would include a debit to: Question 10. Question : The journal entry required to record factory depreciation includes: Question 11. Question : Which one of the following is one of the key steps in determining process costs? Question 12. Question : Which of the following is a description of categorizing related customer costs into cost pools on the basis of cost drivers?

4 Question 13. Question : C.M. Fly, owner of Falcon Aircraft Co., is preparing the accounting record for the year just ended. During the year, he had Question 14. Question : Randall Company manufactures products to customer specifications. A job costing system is used to accumulate Question 15. Question : The calculation of an amount given different levels of a factor that influences that amount is called: Question 16. Question : The most effective basis for cost allocation exists when which one of the following can be determined? Question 17. Question : Accurate cost estimates are required by strategic management for Question 18. Question : The departmental cost allocation approach is preferred when the firm has: Question 19. Question : An alternative concept of fairness in cost allocation, absent the

5 cause-and-effect basis, includes: Question 20. Question : Cleaning Care Inc. expects to sell 10,000 mops. Fixed costs (for the year) are expected to be $10,000, unit sales price is expected to be $12, and unit variable costs are budgeted at $7. Cleaning Care's margin of safety ratio (MOS%) is: Question 22. Question : The term "breakeven after-tax cash flow" represents: Question 23. Question : For a capital investment project, a net present value (NPV) of Question 24. Question : In a make-or-buy decision: Question 25. Question : Generally speaking, when ranking two mutually exclusive investments with different initial amounts, management should give first priority to the project: Question 26. Question : When the internal rate of return (IRR) method and the net present value (NPV) method do not yield the same recommendation for

6 the same investment project, the technique normally selected is: Question 27. Question : XYZ Corporation's capital structure consists of 60% debt with a pretax cost of 10%, and the balance by common equity, with a cost of 15%. The company's income tax rate (federal and state combined) is 40%. XYZ's weighted-average cost of capital Question 28. Question : Pique Corporation wants to purchase a new machine for $300,000. Management predicts that the machine can produce sales of Question 29. Question : Which of the following is a method of reducing cost by identifying parts in different products that are common and interchangeable? Question 30. Question : For product-costing purposes, which of the following statements is true? Question 31. Question : The total variable cost flexiblebudget variance includes all of the

7 Question 32. Question : Which of the following statements about variable overhead costs is true? Question 33. Question : Many firms choose to achieve target cost through redesign of the product or service because they recognize that design decisions: Question 34. Question : Shoemaker Perkins Company uses a standard cost system and had 400 pounds of raw material X15 on hand on September 1. The Question 35. Question : A manufacturer planned to use $82 of materials per unit produced, but in the most recent period it actually used $80 of material per unit produced. During this same period, the company planned to produce 1,200 units, but actually produced only 1,000 units. The flexible-budget variance for materials is:

8 Question 36. Question : From a strategic standpoint, profit centers tend to: Question 37. Question : Under full costing, fixed manufacturing overhead costs would be classified as: Question 38. Question : For production and support departments, a method of implementing cost centers that is input-oriented is the: Question 39. Question : A company's operating income recently increased by 30% while its inventory increased in a given year. Which of the following accounting methods would be most likely to produce the favorable income results? Question 40. Question : Production or support SBUs within the firm that have the goal of providing the best quality product or service at the lowest cost are: Question 41. Question : Profit center income statements are most meaningful to managers

9 Question 42. Question : The balanced scorecard critical success factors (CSFs) provide strong motivation in bonus compensation plans if the noncontrollable factors are: Question 43. Question : Firms typically provide benefits (perks) to employees to enhance motivation. Which of the following would not be an example of a perk? Question 44. Question : Which of the following is a liquidity ratio? Question 45. Question : Risk aversion by managers should be recognized when revising Question 46. Question : All of the following are listed as common payment options for bonus compensation plans except: Question 47. Question : A deferred bonus can consist of: Question 48 King Mattress Company had the following operating results for

10 Question 49. Question : During January, Long, Inc. produced 10,000 units of product with costs as follows: What is Lang's unit cost for January, calculated on the variable costing basis? Question 50. The King Mattress Company had the following operating results for In addition, the company paid dividends in both 2012 and 2013 of $60,000 per year and made capital expenditures in both years of $30,000 per year. The company's stock price in 2012 was $8 and $7 in The industry average earnings multiple for the mattress industry was 9 in 2013 and the free cash flow and sales multiples were 18 and 1.5, =============================================

11 GB 519 Unit 1 Assignment (Ex 1-33, 2-56, 3-52, 3-Case A) FOR MORE CLASSES VISIT Exercise 1-33 Problem 2-56 Problem 3-52 Problem 3 (Case A) ============================================= GB 519 Unit 1 Quiz FOR MORE CLASSES VISIT UNIT 1 QUIZ 1. Question : Corporate management is required to identify and solve problems

12 from a cross-functional view. Instead of viewing a problem as related to a specific business function, management solves these problems by combining skills from different functions simultaneously. This approach is called: Inclusive approach. Integrative approach. Intra-function approach. Multilateral approach. Question 2. Question : When managers produce value for the customer, their orientation consists of all the following except: Quality and Service. Timeliness of delivery. The ability to respond to the customer's desire for specific features.

13 State of the art manufacturing facilities. Question 3. Question : Non-financial measures of operations include all the following except: Stock price. Product quality. Customer satisfaction. Market share. Question 4. Question : The competitive strategy in which the firm succeeds by developing and maintaining a unique value for the product, as perceived by the customer, is termed: Differentiation. Specialization advantage.

14 Design strategy. Benchmarking. Product Specialization. Question 5. Question : The differentiation strategy requires all of the following resources, except: Strong marketing capability. Long tradition in the industry or unique skills. Product engineering. Products designed for ease of manufacture. Question 6. Question : The main objective of value chain analysis is to identify stages of the value chain where the firm can: Justify increases in the price of the product or service. Increase value to the customer or reduce cost in some way. Outsource production to other producers.

15 Improve efficiency UNIT 1 QUIZ Question 7. Question : SWOT analysis, a valuable analysis tool, stands for: Strengths - Workability - Opportunities - Threats. Strategies - Weaknesses - Opportunities - Threats. Strengths - Weaknesses - Observations - Threats. Strengths - Weaknesses - Opportunities - Threats. Question 8. Question : Which of the following is not an environmental performance indicator? Fossil fuel use. Carbon emissions. Pollutants production. All of the above.

16 Question 9. Question : The main objective(s) of internal accounting controls is/are: To increase customer satisfaction. To increase revenue. To prevent or detect errors and fraudulent acts. To facilitate new product lines. UNIT 1 QUIZ Question 10. Question : Prime cost and conversion cost share what common element of total cost? Direct labor. Direct materials. Variable overhead. Fixed overhead.

17 Question 11. Question : Which of the following should be considered a structural cost driver? Scale. Experience. Complexity. Technology. All of the above. Question 12. Question : The additional cost incurred as the cost driver increases by one unit is: Average cost. Controllable cost. Variable cost. Unit cost.

18 UNIT 1 QUIZ Question 13. Question : Assume the following information pertaining to a Company: Prime costs = $195,000 Conversion Costs = $221,000 Direct Materials used = $85,000 Beginning Work-in-Process = $98,000 Ending Work-in-Process = $81,000 Cost of goods manufactured is calculated to be: $289,000. $348,000. $314,000. $297,000. $323,000. Question 14. Question : Factory overhead costs for a given period were 2 times as much as

19 the direct material costs. Prime costs totaled $8,000. Conversion costs totaled $11,350. What are the direct labor costs for the period? $4,650. $3,560. $4,200. $3,860. UNIT 1 QUIZ Question 15. Question : Assume the following information pertaining to a Company: Prime costs = $195,000 Conversion Costs = $221,000 Direct Materials used = $85,000 Beginning Work-in-Process=$98,000 Ending Work-in-Process = $81,000 Factory overhead is calculated to be:

20 $306,000. $26,000. $110,000. $84,000. $111,000. ============================================= GB 519 Unit 2 Assignment (4-35, 5-29) FOR MORE CLASSES VISIT Unit 2 Assignment Exercise 4-35 Exercise 5-29 ============================================= GB 519 Unit 2 Quiz FOR MORE CLASSES VISIT

21 UNIT 2 QUIZ 1. Question : At the end of a fiscal year, overapplied factory overhead should be: Debited to Cost of Goods sold. Credited to Cost of Goods sold. Debited to Cost of Good Manufactured. None of the above. Question 2. Question : Which one of the following is the amount that actual factory overhead exceeds the factory overhead applied? Factory overhead applied. Actual factory overhead. Overapplied overhead.

22 Allocated factory overhead. Underapplied overhead. Question 3. Question : The two main advantages of using predetermined factory overhead rates are to provide more accurate unit cost information and to: Simplify the accounting process. Provide cost information on a timely basis. Insure transmission of correct data. Extend the useful life of the cost data. Adjust for variances in data sources. UNIT 2 QUIZ Question 4. Question : The ideal criterion for choosing an allocation base for overhead is: Ease of calculation. A cause-and-effect relationship.

23 Ease of use. Its preciseness. Question 5. Question : Effective implementation of activitybased costing (ABC) requires: Normally the assistance of a consultant. A sophisticated and expensive computer system. Support of top management and key employees. Capturing properly the complexity of the data. ABC has no significant implementation issues. Question 6. Question : Which of the following would likely be the most appropriate cost driver of electric power used by machines? Number of units.

24 Machine size. Number of machine hours. Number of production runs. Purchase cost of machines. UNIT 2 QUIZ Question 7. Question : In an activity-based costing system, overhead costs are divided into separate: Cost objects. Activity cost pools. Resource consumption and activity consumption cost drivers. Product-line cost pools. Plantwide or departmental cost pools. Question 8. Question : Which of the following is a batchlevel cost driver?

25 Output units. Number of employees. Number of orders. Number of parts. Question 9. Question : Units accounted for includes units completed and transferred out plus: Beginning inventory. Units to account for. Ending inventory. Units started. UNIT 2 QUIZ Question 10. Question : In calculating unit cost in a process costing system, "conversion cost" is defined as the sum of:

26 Direct and indirect material costs. Direct and indirect labor costs. Direct labor and factory overhead costs. Indirect labor and factory overhead costs. Question 11. Question : The journal entry to record incurred direct labor would include a credit to: Work-in-Process Inventory. Accrued Payroll. Factory Overhead. Materials Inventory. Finished Goods Inventory. Question 12. Question : Process cost systems are used in all of the following industries except:

27 Chemicals. Ship building. Oil refining. Textiles. Steel. UNIT 2 QUIZ Question 13. Question : ABC Company listed the following data for the current year: Budgeted Factory Overhead = $ 1,044,000 Budgeted Direct labor Hours = 69,600 Budgeted Machine Hours = 24,000 Actual Factory Overhead = 1,037,400 Actual Labor Hours = 72,600 Actual Machine Hours = 23,600 If overhead is applied based on direct labor hours, the overapplied/underapplied overhead is: $15,300 underapplied.

28 $15,300 overapplied. $51,600 underapplied. $51,600 overapplied. $-0- UNIT 2 QUIZ Question 14. Question : Randall Company manufactures products to customer specifications. A job costing system is used to accumulate production costs. Factory overhead cost was applied at 125% of direct labor cost. Selected data concerning the past year's operation of the company are presented below. Direct Materials January 1 = $77,000 Direct Materials December 31 = 40,000 WIP January 1 = 66,000 WIP December 31 = 42,000 Finished Goods January 1 = 115,000 Finished Goods December 31 = 100,000 Other Information:

29 Direct Materials Purchased = $324,000 Cost of Goods Available for Sale = 950,000 Actual Factory Overhead = 206,000 The cost of goods manufactured during the year is: $850,000. $348,000. $672,000. $835,000. $811,000. Question 15. Question : If a firm has 1,200 completed and transferred out units, 200 equivalent units of beginning work in process and 500 ending work-in-process equivalent units, what is the total of equivalent units of production using the weighted-average method?

30 1,500 units. 1,700 units. 1,200 units. Cannot be determined from the above. ============================================= GB 519 Unit 3 Assignment (9-33, 10-50) FOR MORE CLASSES VISIT Unit 3 Assignment 1 Exercise 9-33 Exercise ============================================= GB 519 Unit 3 Assignment 2 (Part 1 Case Study) FOR MORE CLASSES VISIT

31 Unit 3 Assignment 2 (Part 1 Case Study) Part 1 of the Project, due at the end of this unit, requires you to complete an analysis of an organization. This evaluation will provide the basis for Part 2 of the Project. The Organization may be understood and used in three ways: 1) You may use your own employer as the basis for the Project If your employer is appropriate to the assignment and has the requisite information to support a graduate-level analysis. Use of an organization that is not appropriate may result in a diminished score. If you have any doubts, please contact your instructor for additional guidance. 2) Another possibility would be to use a local company willing to help you with your Project, even if you are not an employee. 3) If you are not employed, or if your employer is not appropriate to the assignment, you may select a different organization. You may use any organization of your choosing, but it must be appropriate to the Project. NOTE: If you are selfemployed, your own company would not be an appropriate research subject. You must select another company to meet the requirements of the course Project. ============================================= GB 519 Unit 3 Quiz FOR MORE CLASSES VISIT

32 UNIT 3 QUIZ 1. Question : Which of the following provides the most accurate cost estimation? Regression analysis with R-squared of Regression analysis with F value of 1.2 High-low method. Regression analysis with R squared of Question 2. Question : Data collected on the cost objects and cost drivers for cost estimation must be: Brief and limited. Exhaustive.

33 Concrete. Consistent and accurate. Varied. Question 3. Question : The independent variable in regression analysis is: The cost to be estimated. The cost driver used to estimate the value of the dependent variable. Hard to define because of its independence. Usually expressed as a range of values. Always a volume-based cost driver. UNIT 3 QUIZ Question 4. Question : A range around the regression line within which the management accountant can rely that the actual value of the predicted cost will

34 fall is referred to as: A relevant range. A goodness of fit. A confidence interval. A t-value A p-value. Question 5. Question : The name for a variety of methods used to examine how an amount will change if factors involved in predicting that amount change is: Sensitivity analysis. Contribution margin analysis. Factor analysis. Cost analysis. Cost-volume-profit analysis.

35 Question 6. Question : CVP analysis for revenue and cost planning has the primary objective of: Maximizing revenue. Minimizing costs. Both revenue maximization and cost minimization. Achieving a desired level of sales and profits. Consistently producing sales above the breakeven level. Question 7. Question : The CVP profit-planning model assumes that over the relevant range of activity: Only revenues are linear. Only revenues and fixed costs are linear. Only revenues and variable costs are linear.

36 Variable cost per unit decreases because of increases in productivity. Both revenues and total costs are linear. Question 8. Question : The degree of operating leverage (DOL), at any sales volume, is equal to: (Operating profit - fixed expenses) sales. (Sales - variable expenses) operating profit. Operating profit (fixed expenses - variable expenses). Sales (fixed expenses - operating profit). Fixed costs Total contribution margin. Question 9. Question : Sales forecasts are the first step in the budgeting process of a merchandising firm because: The revenue data are easiest to generate. Sales information is precise in amount.

37 Sales personnel have the quickest access to data. Sales forecasts are the most objective of all budgeted activities. Almost all activities of a firm emanate from (i.e., are linked to) estimated sales demand. UNIT 3 QUIZ Question 10. Question : All of the following represent alternative approaches to the traditional budget-preparation process except which one? Master budgeting. Kaizen budgeting. Continuous-improvement budgeting. Activity-based budgeting (ABB) Time-driven activity based budgeting (TDABB)

38 Question 11. Question : The type of compensation plan that focuses on the difference between actual performance (sales, operating income, etc.) and budgeted performance is refers to: The use of flexible budgets for performance evaluation. The use of the master budget for performance evaluation. The use of "rolling financial forecasts." The use of a fixed-performance contract. The use of a Kaizen forecast. Question 12. Question : The act of encouraging non-valueadding actions on the part of management in order to improve indicated performance is referred to as: Goal congruency.

39 Gaming the performance indicator. The use of fixed-performance contract. Linear optimization analysis. The use of a relative-performance contract. UNIT 3 QUIZ Question 13. Question : Stylish Sitting is a retailer of office chairs located in San Francisco, California. Due to increased market competition, the CFO of Stylish Sitting has grown worried about the firm's upcoming income stream. The CFO asked you to use the company financial information provided below. Sales Price $75.00 Per Unit Variable Costs: Invoice Cost Sales Commission Total Per Unit Variable Cost $60.00

40 Fixed Costs: Advertising $ 56,000 Rent 78,000 Salaries 226,000 Total Annual Fixed Costs $360,000 If 40,000 office chairs were sold, Stylish Sitting's operating income would be: $240,000. $280,000. $210,000. $340,000. $120,000. UNIT 3 QUIZ Question 14. Question : Thompson Refrigerators Inc. needs to prepare pro forma financial statements for the next fiscal year. To do so, the company must

41 forecast its total overhead cost. The actual machine hours and total overhead cost are presented below for the past six months. MONTH TOTAL O/H MACHINE HOURS Jan $ 8,258 2,134 Feb 8,006 2,045 Mar 8,387 2,276 Apr 8,832 2,743 May 8,921 2,834 June 7,841 2,034 Using the high-low method, unit variable overhead cost is calculated to be: $1.35. $1.15 $1.40. $1.65. $1.25.

42 Question 15. Question : CalcuCo hired Effner & Associates to design a new computeraided manufacturing facility. The new facility was designed to produce 300 computers per month. The variable costs for each computer are $660 and the fixed costs total $74,700 per month. The average cost per unit, if the facility normally expects to operate at eighty-five percent of capacity, is calculated to be (round to nearest cent): $ $ $ $ ============================================= GB 519 Unit 4 Assignment 1 Earth Baby Inc. (EBI) and Great Deal Inc. (GDI) FOR MORE CLASSES VISIT

43 Unit 4 Assignment 1 1. Read the following article Agans, R., & Shaffer, L. (1994). The hindsight bias: The role of the availability heuristic and perceived risk. Basic and Applied Social Psychology, 15(4), This article can be located by using the Kaplan Online Library article search feature. Click here to access the Kaplan Library. You may also access the Kaplan Library by following these instructions: Click the Academic Tools tab Click Online Library. Log in to your account 2. Read the narrative for Exercise found on page 437 in your textbook. After you have read the Article and Narrative, prepare a response to the following Requirements: Assume that you are a business consultant hired to advise Earth Baby, Inc. (EBI) on the proposed venture from Great Deal, Inc. (GDI). Your task is to analyze the proposal and

44 make a recommendation to either accept or reject it. Your presentation must include critical thinking and analysis supported by evidence using independent references. Your analysis must also include any biases that might be relevant to the proposal. The article reading may provide special insight for this requirement. The analysis must be Word document, 2 to 3 pages long, not including the Title Page and Reference List. The analysis must be presented in proper APA, 6th Edition formatting, including a Title Page with properly formatted Running head. A Conclusion section is also required. ============================================= GB 519 Unit 4 Assignment 2 Case Study Part 2 FOR MORE CLASSES VISIT Unit 4 Assignment 2 The second and final part of the case study is due at the end of Unit 4. Part 2 of the case study is a PowerPoint presentation with voiceover recording. The Voiceover will be the narrative you would be presenting as if this were a live

45 presentation. You will, in essence, be making a presentation to the Board of Directors of your organization. required. ============================================= GB 519 Unit 4 Quiz FOR MORE CLASSES VISIT UNIT 4 QUIZ 1. Question : The shadow price in a linear programming model is: Interesting from a mathematical standpoint, but not useful from an accounting standpoint. Equal to the current market price for an additional unit of the related resource. The price one would be willing to pay for an additional unit of the scarce resource. Greater than the market price for the related resource.

46 Zero for a binding constraint. Question 2. Question : Determination of the optimum short-term product mix needs to include an analysis of: Fully absorbed costs. Production constraints. Sales-mix costs. Revenue forecasts. Joint manufacturing costs. Question 3. Question : All the following are characteristic of relevant costs except: They are generally variable. They are not committed. They are different in amount for different options.

47 They are costs that will be incurred in the future. They are inventory-related costs. UNIT 4 QUIZ Question 4. Question : Which of the following statements regarding "opportunity costs" is TRUE? These costs are recorded routinely by cost accounting systems. These costs relate to the benefit lost or foregone when a chosen option (course of action) precludes the benefits from an alternative option. These costs are generally deductible for federal income tax purposes. In terms of most short-run decisions, they are irrelevant.

48 Question 5. Question : A useful device for solving production problems involving multiple products and limited resources is: Gross profit per unit of product. Contribution per unit of scarce resource. Value-stream costing. Relevant cost pricing. The contribution income statement. Question 6. Question : Relevant costs for a make-or-buy decision for a component part include all of the following EXCEPT: Fixed salaries that will not be incurred if the part is outsourced. Payroll tax (unemployment insurance cost), because of outsourcing. Material-handling costs that can be eliminated if the part is outsourced. Special machinery for the part that has no resale value.

49 Current direct material costs for the part. UNIT 4 QUIZ Question 7. Question : Which one of the following is an advantage of the book (accounting) rate of return method for analyzing capital investment proposals? It is not affected by different accounting methods. It is precise and objective. Data for calculating the return are typically readily available. The method explicitly adjusts for the time value of money. The accounting rate of return is generally approximately equal to a project's internal rate of return (IRR). Question 8. Question : Which one of the following statements concerning capital budgeting is not true?

50 A basic objective underlying capital budgeting is to select assets that will earn a satisfactory return. Capital budgeting is the process of identifying, evaluating, selecting, and controlling long-term investment projects. Capital budgeting is based on precise estimates of future events. Capital budgeting involves estimating the revenues and costs of each proposed project, evaluating their merits, and choosing those worthy of investment. UNIT 4 QUIZ Question 9. Question : The after-tax cost of debt for purposes of estimating a company's weighted-average cost of capital: Requires an estimate of the yield-to-maturity for long-term bonds. Is equal to the pretax cost of debt times t, where t = income

51 tax rate. Is equal to the pretax cost of debt (1 - t), where t = income tax rate. Is approximated by the firm's short-term borrowing rate. Is estimated using the Capital Asset Pricing Model (CAPM). Question 10. Question : Which one of the following is an advantage of the payback method? It provides a (rough) measure of risk. It is linearly related to the net present value (NPV) of a proposed project. It considers all possible future cash flows. It applies conventional discounting procedures to anticipated future cash flows. It allows managers to choose between competing projects with different useful lives.

52 UNIT 4 QUIZ Question 11. Question : When evaluating capital budgeting decision models, the payback period emphasizes: Liquidity. Profitability. Cost of capital. Average net income divided by average investment. Average after-tax cash inflow divided by average investment. Question 12. Question : In a discounted cash flow (DCF) analysis, a required incremental investment in net working capital: Should be amortized over the useful life of the equipment. Can be disregarded because the same amount of cash will be

53 recovered at the end of the project's life. Should be treated as a recurring cash outflow over the life of the project. Should be treated as a reduction in the required cash outflow in period 0. Should be treated as an immediate cash outflow that is later recovered when it is no longer needed. UNIT 4 QUIZ Question 13. Question : Pique Corporation wants to purchase a new machine for $300,000. Management predicts that the machine can produce sales of $200,000 each year for the next 5 years. Expenses are expected to include direct materials, direct labor, and factory overhead (excluding depreciation) totaling $80,000 per year. The firm uses straight-line depreciation with no residual value for all depreciable

54 assets. Pique's combined income tax rate is 40%. Management requires a minimum after-tax rate of return of 10% on all investments. What is the present value payback period, rounded to one-tenth of a year? (Note: PV factors for 10% are as follows: year 1 = 0.909; year 2 = 0.826; year 3 = 0.751; year 4 = 0.683; year 5 = 0.621; the PV annuity factor for 10%, 5 years = ) 2.5 years. 3.0 years. 3.3 years. 3.6 years. 4.0 years. Question 14. Question : A truck, costing $25,000 and uninsured, was wrecked the very

55 first day it was used. It can either be disposed of for $5,000 cash and be replaced with a similar truck costing $27,000, or rebuilt for $20,000 and be brand new as far as operating characteristics and looks are concerned. The net relevant cost of the replacing option is: $5,000. $20,000. $22,000. $25,000. UNIT 4 QUIZ Question 15. Question : Carmino Company is considering an investment in equipment that will generate an after-tax income of $6,000 for each year of its four-year life. The asset has no salvage value. The firm is in the 40% tax bracket. The net book value (NBV) of the investment at

56 the beginning of each year will be as follows: Year 1 = $30,000 Year 2 = 15,000 Year 3 = 7,500 Year 4 = 3,750 The amount of after-tax cash inflow from the asset in Year 3 is: $6,600. $7,500. $8,100. $9,000. $9,750. ============================================= GB 519 Unit 5 Assignment (14-40, 15-53) FOR MORE CLASSES VISIT

57 Unit 5 Assignment Exercise Problem ============================================= GB 519 Unit 5 Quiz FOR MORE CLASSES VISIT UNIT 5 QUIZ 1. Question : When a firm determines the desired cost for a product or service, given a competitive market price, in order to earn a desired profit, the firm is exercising: Target costing. Life cycle costing. Variable costing.

58 Absorption costing. Competitive costing. Question 2. Question : The theory of constraints (TOC) emphasizes which of the following? Developing competitive constraints. Finding and eliminating design constraints. Removing bottlenecks from the production process. Improving overall production efficiency. Question 3. Question : Generally, firms will price a product more competitively at which stages of the product's sales life cycle? Product introduction and Growth. Maturity and Decline.

59 Throughout the cycle. At the end of the life cycle. UNIT 5 QUIZ Question 4. Question : Throughput margin is defined as sales less: Direct labor costs. Direct material costs. Direct labor and material costs. Processing costs. Manufacturing costs. Question 5. Question : Traditional financial control systems have recently been criticized because: They use flexible, not static, budgets. They generally lead to goal-congruent behavior on the part of managers.

60 They focus more in improving basic business processes than short-term financial results. They fail to incorporate nonfinancial performance indicators into the evaluation process. They provide performance data on a real-time basis. Question 6. Question : Which one of the following is the difference between the actual hourly wage rate and the standard hourly wage rate, multiplied by the actual direct labor hours worked during a period? Total direct labor standard cost variance. Direct labor efficiency variance. Direct labor usage variance. Direct labor flexible-budget variance. Direct labor rate variance.

61 UNIT 5 QUIZ Question 7. Question : A "standard cost" is a predetermined amount (e.g., cost) that: Should be incurred under relatively efficient operating conditions. Will be incurred for an operation or a specific objective. Must occur for an operation or a specific objective. Cannot be changed once it is established by management. Is useful for planning and control but not inventory valuation purposes. Question 8. Question : The difference between the total actual sales revenue of a period and the total flexible-budget sales revenue for the units sold during the period is the: Total flexible-budget variance.

62 Sales volume variance. Selling price variance. Operating income flexible-budget variance. Operating income variance. Question 9. Question : Which of the following is not a plausible cause of a systematic variance? Prediction error. Modeling error. Implementation error. Measurement error. Random error UNIT 5 QUIZ Question 10. Question : Which one of the following journal entries in a standard cost

63 system would be used to apply factory overhead costs to production? A debit to the factory overhead account, at standard cost. A credit to the factory overhead account, at standard cost. A debit to WIP inventory, at actual cost. A credit to Finished Goods Inventory, at standard cost. Question 11. Question : Which of the following factors is not usually important when deciding whether to investigate a variance? Magnitude of the variance. Trend of the variance over time. Whether the variance is favorable or unfavorable. Cost of investigating the variance. Likelihood that the variance will recur in the future.

64 Question 12. Question : The difference between total variable overhead cost incurred and the standard variable overhead cost based on the actual quantity of the cost driver used to apply variable overhead is the: Total variable overhead variance. Variable overhead spending variance. Variable overhead rate variance. Variable overhead efficiency variance. UNIT 5 QUIZ Question 13. Question : Electronic Component Company (ECC) is a producer of high-end video and music equipment. ECC currently sells its top of the line "ECC" DVD player for a price of $250. It costs ECC $210 to make the player. ECC's main competitor is coming to market with

65 a new DVD player that will sell for a price of $220. ECC feels that it must reduce its price to $220 in order to compete. The sales and marketing department of ECC believes the reduced price will cause sales to increase by 15%. ECC currently sells 200,000 DVD players per year. Assuming sales and marketing are not correct in their estimation and the volume of sales is not changed and ECC meets the competitive price, what is the target cost if ECC wants to maintain its same income level? $210. $200. $190. $180.

66 Question 14. Question : Lucky Company's direct labor information for the month of February is as follows: Actual DL Hours Word (AQ) = 61,500 Standard DL Hours Allowed (SQ) = 63,000 Total Payroll for DL = $774,900 DL Efficiency Variance = $18,000 The standard direct labor rate per hour is: $ $ $ $ $ UNIT 5 QUIZ Question 15. Question : Lucky Company's direct labor information for the month of February is as follows: Actual DL Hours Word (AQ) = 61,500

67 Standard DL Hours Allowed (SQ) = 63,000 Total Payroll for DL = $774,900 DL Efficiency Variance = $18,000 The actual direct labor rate per hour (AP) is: $ $ $ $ $ ============================================= GB 519 Unit 6 Assignment (BE 18-22, 20-37) FOR MORE CLASSES VISIT Unit 6 Assignment BRIEF Exercise 18-22

68 Problem 20-37