DEVRY ACCT434 WEEK 3 AND 5 QUIZ

WEEK 3

(TCO 3) McDevitt Company employs six individuals. They are each paid $30,000 salary per
year. How would total costs of personnel
be classified?

Variable

Fixed cost within relevant range

Mixed

Variable cost within relevant range

Question 2. Question
: (TCO 3) For January, the cost
components of a picture frame include $0.35 for the glass, $0.65 for the wooden
frame, and $0.80 for assembly. The
assembly desk and tools cost $400. A
total of 1,000 frames is expected to be produced in the coming year. What cost function best represents these costs?

y = 1.80 + 400X

y = 400 + 1.80X

y = 2.20 + 1,000X

y = 1.00 + 400X

Question 3. Question
: (TCO 3) Which cost estimation
method uses a formal mathematical method to develop cost functions based on
past data?

Quantitative analysis

Industrial engineering

Account analysis

Conference

Question 4. Question
: (TCO 3) Penny’s TV and
Appliance Store is a small company that has hired you to perform some
management advisory services. The
following information pertains to 20X2 operations: Sales (2,000 televisions)
$900,000; Cost of goods sold $400,000; Store manager’s salary per year $70,000;
Operating costs per year $157,000; Advertising and promotion per year $15,000;
Commissions (4% of sales) $36,000. What
are the estimated total costs if Penny’s expects to sell 3,000 units next year?

$799,000

$1,017,000

$896,000

$799,000

Question 5. Question
: (TCO 4) Feedback regarding
previous actions may affect

implementation of the decision.

future predictions.

the decision model.

All of the above

Question 6. Question
: (TCO 4) For decision making, a
listing of the relevant costs

will help the decision maker concentrate on
the pertinent data.
will only include future costs.

will only include costs that differ among
alternatives.

All of the above

Question 7. Question
: (TCO 4) Sunk costs

are relevant to all decisions.

have future implications.

are future costs.

are past costs.

Question 8. Question
: (TCO 4) Black Tool Company has
a production capacity of 1,500 units per month, but production is only 1,250
units. The manufacturing costs are $60
per unit and marketing costs are $16 per unit.
Doug Hall offers to purchase 250 units at $76 each for the next five
months. Should Black accept the
one-time-only special order if only absorption-costing data are available?

Yes, since operating profits will most likely
increase.

No, since only the employees will benefit.

No, the company will only break even.

Yes, good customer relations are essential.

Question 9. Question
: (TCO 5) The theory of
constraints is used for cost analysis when

a manufacturing company produces multiple
products and uses multiple manufacturing facilities and/or machines.
using a long-term time horizon.

operating costs are assumed fixed.

All of the above

Question 10. Question
: (TCO 5) Keeping the bottleneck
operation busy and subordinating all nonbottleneck operations to the bottleneck
operation involves

keeping the bottleneck resource busy at least
90% of the time.
maximizing the contribution margin of the
nonbottleneck operation.
having the workers at the nonbottleneck
operation or machine improving their productivity.
None of the above

(US & Canada)

WEEK 5

(TCO 7) When companies do not want to use market prices or
find it too costly, they typically use __________ prices, even though
suboptimal decisions may occur.

average-cost

full-cost

long-run cost

short-run average cost

Question 2. Question
: (TCO 7) The price of movie
tickets for opening day and the few days following compared to the price six
months later is an example of

price gouging.

peak-load pricing.

dumping.

demand elasticity.

Question 3. Question
: (TCO 7) The amount of markup
percentage is usually higher if

demand is elastic.

competition is intense.

there is idle capacity.

demand is strong.

Question 4. Question
: (TCO 7) An understanding of
life-cycle costs can lead to

additional costs during the manufacturing
cycle.

less need for evaluation of the competition.

cost-effective product designs that are
easier to service.
mutually beneficial relationships between
buyers and sellers.
Points
Received: 3 of 3
Comments:

Question 5. Question
: (TCO 7) Each month, Haddon
Company has $275,000 total manufacturing costs (20% fixed) and $125,000
distribution and marketing costs (36% fixed).
Haddon’s monthly sales are $500,000.
The markup percentage on full cost to arrive at the target
(existing) selling price is

25%.

75%.

80%.

20%.

Question 6. Question
: (TCO 8) A product may be
passed from one subunit to another subunit in the same organization. The product is known as

an interdepartmental product.

an intermediate product.

a subunit product.

a transfer product.

Question 7. Question
: (TCO 8) Transfer prices should
be judged by whether they promote

goal congruence.

the balanced scorecard method.

a high level of subunit autonomy in decision
making.

Both 1 and 3 are correct.

Question 8. Question
: (TCO 8) A benefit of using a
market-based transfer price is the

profits of the transferring division are
sacrificed for the overall good of the corporation.
profits of the division receiving the
products are sacrificed for the overall good of the corporation.
economic viability and profitability of each
division can be evaluated individually.
None of the above

Question 9. Question
: (TCO 8) The range over which
two divisions will negotiate a transfer price is

between the supplying division’s variable
cost and the market price of the product.
between the supplying division’s variable
cost and its full cost of the product.
anywhere above the supplying division’s full
cost of the product.
between the supplying division’s full cost
and 180% above its full cost.

Question 10. Question
: (TCO 8) Division A sells
soybean paste internally to Division B, which in turn, produces soybean burgers
that sell for $5 per pound. Division A
incurs costs of $0.75 per pound while Division B incurs additional costs of
$2.50 per pound. Which of the following
formulas correctly reflects the company’s operating income per pound?

$5.00 – ($1.25 + $2.50) = $1.25

$5.00 – ($0.75 + $2.50) = $1.75

$5.00 – ($0.75 + $3.75) = $0.50

$5.00 – ($0.25 + $1.25 + $3.50) = 0