Chapter 10: Responsibility Accounting,performance
Evaluation,and Transfer Pricing
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Q1) Which of the following would be a reason that managers would provide good service?
A)They may have low ability.
B)They may not prefer to work hard.
C)They may prefer to spend company resources on perquisites.
D)They may be rewarded with a perquisite for increasing return customers.
Q2) What are transfer prices?
A)the prices charged for distributing goods from one warehouse to another
B)the prices charged for the goods produced by one division to another division that needs these goods
C)the prices charged when delivering goods to the customer
D)the prices charged when transferring goods to international divisions
Q3) Division A produces a component and wants to sell it to Division B.What does the transfer price represent for each division?
A)revenue to Division A and a cost to Division B
B)revenue to Division B and a cost to Division A
C)revenue to Division A and no effect on Division B
D)a cost to Division B and no effect on Division A
Q4) How are information,responsibility,and accountability related?
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Chapter 11: Tactical Decision Making
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Q1) Listed below are the steps in the tactical decision-making process. I. Comparing relevant costs and relating to stratepre goals
II. Identifying feasible alternatives
III. Identifying costs and benefits and elininating irrelevant costs
IV. Selecting best alternative
V. Defining the problem What is the proper sequence of steps?
A)I,II,V,III,IV
B)II,I,V,III,IV
C)V,II,III,I,IV
D)V,III,II,IV,I
Q2) Which of the following costs is relevant to a make-or-buy decision?
A)original cost of the production equipment
B)annual depreciation of the equipment
C)amount that would be received if the production equipment were sold
D)cost of direct materials purchased last month and used to manufacture the component
Q3) What are relevant costs? How do they relate to decision making?
Q4) How is understanding of committed resources and flexible resources important to the activity resource usage model? How does this relate to relevance?
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Chapter 12: Pricing and Profitability Analysis
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Q1) The following information pertains to three different products being sold by Andy Company: \(\begin{array}{ccccc}
\text { Product }& \text { Old Price } &\text { New Price } & \text { Old Quantity } & \text { New Quantity }\\
\hline\text { A } & \$ 10.00 & \$ 11.00 & 2,000 & 1,900 \\
\text { B } & 20.00 & 18.00 & 4,000 & 4,600 \\
\text { C } & 30.00 & 33.00 & 6,000 & 5,500 \\
\text { D } & \$ 40.00 & \$ 38.00 & 8,000 & 10,000 \end{array}\)
Which product has an elastic demand curve?
A)Product A
B)Product B
C)Product C
D)Product D
Q2) What is a disadvantage of absorption costing?
A)It is not a useful format for decision making.
B)It encourages the dumping of inventory.
C)It reports a lower net income when production is less than sales.
D)It is difficult to gather the fixed and variable costing information.
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Chapter 13: Strategic Cost Management
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Q1) Refer to the figure.What would be the life-cycle income for Product A if research and development costs and marketing costs are traced to each product?
A)$15,000
B)$23,000
C)$27,000
D)$38,000
Q2) Which of the following involves choosing among alternative strategies with the goal of selecting a strategy or strategies that provides a company with reasonable assurance of long-term growth and survival?
A)strategic decision making
B)strategic cost management
C)competitive advantage
D)customer value
Q3) What type of manufacturing reduces inventory levels because production is geared to demand?
A)traditional
B)conventional
C)just in time
D)total quality management
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Chapter 14: Activity-Based Management
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Q1) What are the results or products of an activity?
A)activity inputs
B)activity outputs
C)driver analyses
D)value-added activities
Q2) What incentive specifically relates to sharing the gains from improvements in projects?
A)bonuses
B)stock options
C)profit sharing
D)gainsharing
Q3) What is the purpose of driver analysis?
A)to identify activities in a process
B)to identify the number of processes
C)to identify root causes of activity costs
D)to identify the complexity of processes
Q4) What is process value analysis?
Q5) Describe how activity-based management and activity-based costing systems differ.
Q6) What is kaizen costing? How does activity analysis help reduce costs?
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Chapter 15: The Balanced Scorecard: Strategic-Based Control
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Q1) From the customer perspective,which of the following might be an appropriate measure for improving product quality?
A)customer profitability
B)cost per customer
C)percentage of returns
D)number of patents pending
Q2) Which of the following features make stretch targets feasible?
A)The targets are set in isolation by top management.
B)The measures are linked by causal relationships.
C)The measures are based on currently attainable standard costs.
D)The targets are set at desired levels for twenty years to ensure long-term performance.
Q3) What is the most common strategic-based performance management system?
A)variance analysis with standard costs as benchmarks
B)the balanced scorecard
C)financial budgets
D)strategic responsibility system
Q4) Strategic-based performance measures are balanced measures.Give examples of four types of balanced measures.
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Q5) Compare and contrast activity-based measures and strategic-based measures.
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Chapter 16: Quality and Environmental Cost Management
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Q1) What is a characteristic of a long-range quality report?
A)This report measures trends of quality costs over time.
B)This report measures interim progress toward the zero-defect goal.
C)This report measures actual costs of quality compared to budgeted costs of quality for a period of time.
D)This report measures actual costs of quality versus what quality costs would be at an ideal or targeted zero-defect standard.
Q2) What is the total quality management standard that is used in the total quality approach?
A)robust zero-defects standard
B)total quality management standard
C)just in time standard
D)optimal quality standard
Q3) Refer to the figure.What is the change in environmental costs from 20X1 to 20X2?
A)$12,000
B)$37,000
C)$41,000
D)$750,000
Q4) What does quality mean and how has improving quality increased firm value?
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Chapter 17: Lean Accounting and Productivity Measurement
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Q1) What is reducing the time it takes to configure equipment to produce a different product an example of?
A)cellular manufacturing
B)batch processing
C)reduced setup/changeover times
D)value flow stream
Q2) Refer to the figure.What is the labour productivity ratio for 20X1?
A)25.00
B)24.80
C)24.00
D)22.84
Q3) What does the lean control system use to compare operational,capacity,and financial metrics with prior-week performances and with a future desired state?
A)a Balanced Scorecard
B)a box scorecard
C)a profit analysis worksheet
D)a performance improvement plan
Q4) Define what constitutes total productive efficiency,including a definition of technical efficiency and allocative efficiency.
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Chapter 18: Inventory Management: Economic Order
Quantity,jit,and the Theory of Constraints
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Q1) What makes JIT superior to the traditional approach of inventory management?
A)The traditional approach accepts the existence of setup costs,but not carrying costs or inventories.JIT accepts the existence of setup and carrying costs,but pushes for zero inventories.
B)The traditional approach accepts the existence of carrying costs and inventories,but not setup costs.JIT accepts the existence of setup costs but not carrying costs and pushes for zero inventories.
C)The traditional approach accepts the existence of both setup costs and carrying costs and attempts to find the order quantity that best balances those costs.JIT does not accept either setup costs or carrying costs and pushes for zero inventory levels.
D)The traditional approach does not accept carrying costs or setup costs.JIT minimizes both setup and carrying costs by finding the best order quantity to balance these costs.
Q2) What is safety stock?
A)the cost of holding inventory
B)the value added inventory
C)the amount of inventory that could have been sold if you had it on hand
D)extra inventory carried to serve as insurance against fluctuations in demand
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