Costs and Question Essay Example

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Costs and Question Essay Example

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Costs and Question Essay

0 / 1 point

The return on investment measure of performance:

1)

Is not as important a measure of management effectiveness as the amount of net income.

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2)

Relates dividends paid to the entity’s assets.

3)

Is calculated using net income as the amount of return.

4)

Is calculated by dividing average assets for a period by the amount of net income for the period – Costs and Question Essay introduction. Question 9

0 / 1 point

Expenditures capitalized as long-lived assets generally include those expenditures that:

1)

are made for normal repairs to maintain the usefulness of the asset over a number of years.

2)

are for items that have a physical life of more than a year, regardless of their cost.

3)

are material and that have an economic benefit to the entity only in the current year.

4)

are material and that have an economic benefit to the entity that extends beyond the current year. Question 11

0 / 1 point

Cassady, Inc. borrowed $5,000 for 3 months at an APR of 10%. The amount of interest paid on this loan was:

1)

$240

2)

$120

3)

$125

4)

$500

Question 16

0 / 1 point

As the total volume of activity changes:

1)

the total of variable costs changes.

2)

the total of fixed costs changes.

3)

variable costs per unit change.

4)

fixed costs per unit stay the same.

Question 17

0 / 1 point

A firm has revenues of $120,000, a contribution margin ratio of 30%, and fixed expenses that total $56,000. If revenues increase by $20,000, then:

1)

operating income will increase by $6,000.

2)

operating income will be 0.

3)

fixed expenses will increase $8,000.

4)

the contribution margin ratio will increase by 1/8.

Question 18

0 / 1 point

Direct costs pertain to costs that:

1)

are traceable to a cost object.

2)

are not traceable to a cost object.

3)

are commonly incurred.

4)

are variable costs.

Question 19

0 / 1 point

The three components of product costs are:

1)

direct material, supervisor salaries, selling expenses.

2)

direct labor, manufacturing overhead, indirect material.

3)

direct material, direct labor, manufacturing overhead.

4)

manufacturing overhead, indirect material, indirect labor.

Question 20

0 / 1 point

Which of the following lists the components of the master budget in correct chronological order?

1)

Direct labor budget, production budget, cost of goods sold budget.

2)

Sales budget, production budget, cash budget.

3)

Sales budget, raw materials budget, production budget.

4)

Cash budget, production budget, manufacturing overhead budget. Question 21

0 / 1 point

The key difference between a controllable cost and a noncontrollable cost is:

1)

the large amount of the cost.

2)

he frequency of cost incurrence.

3)

the short term ability to influence the cost by the manager.

4)

whether the cost is fixed or variable.

Question 22

0 / 1 point

Relevant costs in decision-making:

1)

are future costs that represent differences between decision alternatives.

2)

result from past decisions.

3)

should not influence the decision.

4)

none of the above.

Question 23

0 / 1 point

Product Z sells for $18 per unit as is but if it is enhanced it can be sold for $24 per unit. The enhancement process will cost $50,000 for 10,000 units. If the 10,000 units of Product Z are sold as is without further processing, the company:

1)

will incur an incremental profit of $10,000.

2)

will incur an opportunity cost of $10,000.

3)

will incur an incremental profit of $1 per unit.

4)

will incur an incremental loss of $6 per unit.

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