ACC650 Module 8-Quiz Review Using
Accounting Information in Decision Making
Click Link Below To Buy:
Contact Us:
Hwcoursehelp@gmail.com
Module
8 Quiz : Using Accounting Information in Decision Making
1) The following data pertain to Lemon
Enterprises:
a. Variable manufacturing cost: $70
b. Variable selling and administrative
cost: 20
c. Applied fixed manufacturing cost: 40
d. Allocated fixed selling and
administrative cost: 15
e. What price will the company charge if
the firm uses cost-plus pricing based onvariable manufacturing cost and a
markup percentage of 110%?
$84.
$147.
$210.
$231.
Some other amount.
2) Which of the following represents the
cost-plus pricing formula?
a. Price = cost + (markup percentage *
cost).
Price = cost + markup percentage.
Price = cost + markup percentage.
Price = cost * markup percentage.
Price = cost + (markup percentage + cost).
3) Which of the following is the proper
calculation of a company's depreciation tax shield?
a. Depreciation deduction + income taxes.
Depreciation * (1 - tax rate).
Depreciation * tax rate.
Depreciation / tax rate.
Depreciation / (1 - tax rate).
4) The net-present-value method assumes
that project funds are reinvested at the:
a. hurdle rate.
rate of return earned on the project.
cost of debt capital.
cost of equity capital.
internal rate of return.
5) In a net-present-value analysis, the
discount rate is often called the:
a. payback rate.
hurdle rate.
minimal value.
net unit rate.
objective rate of return.
6) The term "opportunity cost"
is best defined as:
a. an irrelevant decision factor.
the benefit associated with a rejected
alternative when making a choice.
the amount of money paid for an item, taking
inflation into account.
the amount of money paid for an item.
the amount of money paid for an item, taking
possible discounts into account.
7) Discounted-cash-flow analysis focuses
primarily on:
a. the stability of cash flows.
the timing of cash flows.
the probability of cash flows.
the sensitivity of cash flows.
whether cash flows are increasing or
decreasing.
8) From an economic perspective, a
company's profit-maximizing quantity is found where:
the total cost curve intersects with the
marginal cost curve.
the total revenue curve intersects with the
average revenue curve.
the marginal revenue curve intersects with the
demand curve.
the marginal revenue curve intersects with the
marginal cost curve.
the marginal cost curve intersects with the
demand curve.
9) Jenkins plans to generate $650,000 of
sales revenue if a capital project is implemented. Assuming a 30% tax rate, the
sales revenue should be reflected in the analysis by a:
i. $195,000 inflow.
$195,000 outflow.
$455,000 inflow.
$455,000 outflow.
$650,000 inflow.
10) Susan is contemplating a job offer with
an advertising agency where she will make $54,000 in her first year of
employment. Alternatively, Susan can begin to work in her father's business
where she will earn an annual salary of $38,000. If Susan decides to work with
her father, the opportunity cost would be:
a. $0.
$38,000.
$54,000.
$92,000.
irrelevant in deciding which job offer to
accept.
11) Occular is studying whether to drop a
product because of ongoing losses. Costs that would be relevant in this
situation would include variable manufacturing costs as well as:
a. factory depreciation.
avoidable fixed costs.
unavoidable fixed costs.
allocated corporate administrative costs.
general corporate advertising.
12) Which of the following best defines the
concept of a relevant cost?
a. A future cost that is the same among
alternatives.
A past cost that differs among alternatives.
A future cost that differs among alternatives.
A past cost that is the same among
alternatives.
A cost that is based on past experience.
13) Which of the following costs can be
ignored when making a decision?
a. Opportunity costs.
Differential costs.
Sunk costs.
Relevant costs.
All future costs.
14) If the volume sold reacts strongly to
changes in price, demand:
a. has no elasticity.
has negative elasticity.
is inelastic.
is elastic.
is unrealistic.
15) Capital budgeting tends to focus
primarily on:
a. revenues.
costs.
cost centers.
programs and projects.
allocation tools.
16) A company that is using the internal rate
of return (IRR) to evaluate projects should accept a project if the IRR:
a. is greater than the project's net
present value.
equates the present value of the project's
cash inflows with the present value of the project's cash outflows.
is greater than zero.
is greater than the hurdle rate.
is less than the firm's cost of investment
capital.
17) The following costs relate to Southside
Company: Variable manufacturing cost, $30; variable selling and administrative
cost, $8; applied fixed manufacturing overhead, $15; and allocated fixed
selling and administrative cost, $4. If Southside uses absorption
manufacturing-cost pricing formulas, the company's markup percentage would be
computed on the basis of:
a. $30.
$38.
$45.
$57.
some other amount.
18) Consider the following statements about
the total-cost and the incremental-cost approaches of investment evaluation:
I. Both approaches will yield the same
conclusions.
II. Choosing between these approaches is a
matter of personal preference.
III. The incremental approach focuses on cost
differences between alternatives.
Which
of the above statements is (are) true?
I only.
II only.
III only.
II and III.
I, II, and III.
19) S'Round Sound, Inc. reported the
following results from the sale of 24,000 units of IT-54:
Sales $528,000
Variable
manufacturing costs 288,000
Fixed
manufacturing costs 120,000
Variable
selling costs 52,800
Fixed
administrative costs 35,200
Rhythm
Company has offered to purchase 3,000 IT-54s at $16 each. Sound has available
capacity, and the president is in favor of accepting the order. She feels it
would be profitable because no variable selling costs will be incurred. The
plant manager is opposed because the "full cost" of production is
$17. Which of the following correctly notes the change in income if the special
order is accepted?
a. $3,000 decrease.
$3,000 increase.
$12,000 decrease.
$12,000 increase.
None of these.
20) Algeria Transport Company has average
invested capital of $800,000 and a target return on investment of 15%. The
total cost per unit is $20 based on a volume level of 25,000 units. Albany's
markup percentage on total cost is:
a. 9.375%.
24.0%.
47.5%.
62.5%.
some other amount.
No comments:
Post a Comment