1.Two or more products that result from common inputs are called
A- split products
B- joint products
C- combination products
D- common products
2.Target costing
A- starts with the features a customer wants and what they will pay for them.
B- is used after the product is designed.
C- focuses on including all features in a product that a customer may want.
D- all of the above.
3.Which of the following should be true in order for a company to accept a special order?
A- Variable costs are less than fixed costs
B- Incremental revenues exceed incremental costs
C- Opportunity costs are zero
D- The order is for a current customer
4.The required rate of return used to compute net present value is related to the firm's
A- contribution margin.
B- depreciation methods.
C- fixed costs.
D- cost of capital.
5.Which of the following techniques uses time value of money?
A- Payback period
B- Internal rate of return
C- Accounting rate of return
D- Relative sales value method
6.In a bottom-up approach to budgeting A- the CFO alone determines the budget. B- only the budget for the next month is prepared. C- lower level managers are the primary source of budget information. D- the production budget is prepared before the sales budget.
7.The amount of direct material that must be purchased during a period depends on the amount of direct material (Points : 4) A- needed for production. B- available in the beginning inventory. C- desired as ending inventory. D- All of the above are correct.
8.The difference between standard costs and budgeted costs is that standard costs
A- refer to a single unit while budgeted costs refer to the cost, at standard, for the total number of budgeted units.
B- are calculated under ideal conditions, while budgeted costs are calculated for attainable conditions.
C- are calculated for material while budgeted costs are calculated for labor.
D- are part of the management accounting system, while budgets are part of the financial accounting system.
9.Which of the following are components of a direct labor variance?
A- Rate and efficiency
B- Attainable and ideal
C- Price and quantity
D- Volume and controllable
10.A subunit that has responsibility for controlling cost but not revenues is a(n)
A- profit center.
B- cost center.
C- investment center.
D- business center.
11.Why is ROI better than income as a measurement of performance for an investment center? ROI follows GAAP ROI is simpler to compute than income ROI considers the amount invested as well as the net income ROI is forward looking
12.Which ratio measures the rate earned on total capital provided by the owners?
A- Return on assets
B- Return on stockholders' equity
C- Earnings per share
D- Price earnings ratio