1. Discretionary costs are generally budgeted on the basis of all of the following factors except ____.
A) the related activity's perceived significance to achieving the organization's goals
B) the ability of managers to effectively negotiate during the budgetary process
C) the previous period's actual costs
D) the upcoming period's expected level of operations
2. Which of the following is not a reason firms hold cash?
A) All of the these are reasons why firms hold cash.
B) For speculation
C) To liquidate transactions
D) To cover unexpected events
3. Committed costs ____.
A) are usually not measurable in monetary terms
B) are generated by activities that vary in type and magnitude from day to day
C) include costs such as maintenance and advertising
D) may be partially controlled by comparing actual and expected results from plant asset investments
4. The practice of finding acceptable alternatives to high-cost items or not spending money for unnecessary goods or services is referred to as ____.
A) cost management
B) cost containment
C) cost avoidance
D) cost reduction
5. Cost containment is not possible for ____.
A) quantities purchased
B) seasonality
C) reduced supplier competition
D) supply and demand adjustments
6. Discretionary costs are ____.
A) those management decides to incur in the current period to enable the company to achieve objectives other than the filling of orders placed by customers
B) unaffected by current managerial decisions
C) governed mainly by past decisions that established the current levels of operating and organizational capacity and that only change slowly in response to small changes in capacity
D) costs such as depreciation and staff salaries
7. All of the following are strategies for dealing with uncertainty except ____.
A) explicitly considering uncertainty when estimating future costs
B) insuring against occurrences of specific events
C) structuring costs to adjust to uncertain outcomes
D) installing new information technology
8. Select the response that shows the correct order of the steps in a cost control system.
A) Plan → Execute → Respond → Evaluate
B) Evaluate → Plan → Respond → Execute
C) Plan → Execute → Evaluate → Respond
D) Evaluate → Plan → Execute → Respond
9. Which of the following variables influences the cost of carrying cash?
A) All of these
B) Opportunity cost of holding cash
C) Cost of borrowing
D) Cost of issuing equity capital
10. In regression analysis, which of the following correlation coefficients represents the strongest relationship between the independent and dependent variables?
A) .00
B) 1.00
C) - .50
D) .50
11. Purchases of indirect materials and nonoperating inputs such as office supplies are increasingly being accomplished using an e-procurement system. Which of the following functions is typically not included in such a system?
A) Ordering function
B) Requisitioning function
C) Forecasting function
D) Payment function
12. A decision maker is operating in an environment in which all the facts surrounding a decision are known exactly, and each alternative is associated with only one possible outcome. The environment is known as ____.
A) conflict
B) risk
C) uncertainty
D) certainty
13. Cost changes may be attributed to which of the following factors?
A) Inflation
B) Volume changes
C) Supply/supplier cost adjustments
D) All of the these
14. What coefficient of correlation results from the following data?XY11028364452
A) 0
B) -1
C) +100
D) +1
15. Preparing variance reports for a division is a cost control method for which of the following control points?
A) During an event
B) After an event
C) Before an event
D) All of these