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Accounting Final Essay

1999 words - 8 pages

1. (TCO 1) Performance reports often compare current period performance with (Points: 4)
Performance in a prior period.
Planned (budgeted) performance.
Both A and B are correct.
Neither A nor B is correct.

2. (TCO 1) Marco Diner produced and sold 2,000 bagels last month and had fixed costs of $6,000. If production and sales are expected to increase by 10% next month, which of the following statements is true? (Points: 4)
Total fixed costs will increase.
Total fixed costs will decrease.
Fixed cost per unit will increase.
Fixed cost per unit will decrease.

3. (TCO 2) Which of the following is a manufacturing cost? (Points: 4)
Direct material
Advertising expense
...view middle of the document...

(TCO 4) Regression analysis (Points: 4)
uses all the available data points to estimate a cost equation
can be performed by many spreadsheet programs
provides an equation that can be used to estimate total costs at different levels
all of the above

8. (TCO 4) The number of units that must be sold to exactly cover its fixed and variable costs is the (Points: 4)
contribution margin
break-even point
relevant range
margin of safety

9. (TCO 5) Full costing (Points: 4)
is the same as absorption costing.
considers fixed manufacturing overhead as part of the cost of inventory.
often does not provide the information needed for C-V-P analysis.
All of the above choices are correct.

10. (TCO 5) If the number of units sold is less than the number of units produced (Points: 4)
full costing and variable costing will yield the same net income.
full costing will assign some fixed manufacturing overhead to the units in the ending inventory.
net income will be higher under variable costing than under full costing.
inventory levels will decrease.

11. (TCO 6) A major problem with cost-plus contracts is that they (Points: 4)
are not acceptable under GAAP.
cause the supplier to take significant financial risks.
require the supplier to use variable costing.
create an incentive to allocate as much cost as possible to the goods produced under the cost-plus contract.

12. (TCO 6) Which of the following steps is not involved in the ABC approach? (Points: 4)
Identify activities which cause costs to be incurred.
Allocate costs to products based on activity usage.
Group costs of activities into cost pools.
Improve processes based on benchmarking

13. (TCO 7) Which of the following is not a term used to describe the additional costs incurred as a result of selecting one decision over another? (Points: 4)
Differential costs
Sunk costs
Relevant costs
Incremental costs
1. (TCO 7) The value of benefits foregone by selecting one alternative over another is a(n) (Points: 4)
sunk cost
incremental benefit
differential revenue
opportunity cost

2. (TCO 8) Which of the following statements about price, demand and profit is most generally true? (Points: 4)
As price increases, demand increases
As demand increases, prices increase
As prices increase, demand decreases
As price increases, profits decrease

3. (TCO 8) When deciding to accept or reject a special order, which of the following costs would most likely not be relevant? (Points: 4)
The wages of direct labor to make the order.
Depreciation on the machinery used to make the order.
The raw material used to make the order.
The electricity used to run the machine to make the order.

4. (TCO 9) The required rate of return used to compute net present value is related to the firm's (Points: 4)
contribution margin.
depreciation methods.
fixed costs.
cost of capital.

5. (TCO 9) The internal rate of return (Points: 4)
takes into...

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