Question 1

A cost that cannot be changed by any present or future decision is a(n)
A)incremental cost. b opportunity cost.
C)sunk cost.
D)variable cost.

Accepted Answer

The answer of A cost that cannot be changed by...

Question 2

Use the following information for questions 
Chung Inc. is considering the replacement of a piece of equipment with a newer model. The following data has been collected: $\begin{array}{lrr}&\text { Old Equipment }&\text { New Equipment }\
\text { Purchase price } & \$ 225,000 & \$ 375,000 \
\text { Accumulated depreciation } & 90,000 & -0- \
\text { Annual operating costs } & 300,000 & 240,000
\end{array}$ If the old equipment is replaced now, it can be sold for $60,000. Both the old equipment's remaining useful life and the new equipment's useful life is 5 years.
-The net advantage (disadvantage) of replacing the old equipment with the new equipment is

Accepted Answer

A) $60,000 
B) $(15,000) 
C) $(75,000) 
D) $90,000 
A) $60,000 
B) $(15,000) 
C) $(75,000) 
D) $90,000

Question 3

Incremental analysis is synonymous with

Accepted Answer

A) difficult analysis. 
B) differential analysis. 
C) gross profit analysis. 
D) derivative analysis. 
A) difficult analysis. 
B) differential analysis. 
C) gross profit analysis. 
D) derivative analysis.

Question 4

Martin Company incurred the following costs for 70,000 units: Variable costs $\quad \$ 420,000$
Fixed costs $\quad 392,000$ Martin has received a special order from a foreign company for 3,000 units. There is sufficient capacity to fill the order without jeopardizing regular sales. Filling the order will require spending an additional $6,300 for shipping.
If Martin wants to break even on the order, what should the unit sales price be?

Accepted Answer

A) $6.00 
B) $8.10 
C) $11.60 
D) $13.70 
A) $6.00 
B) $8.10 
C) $11.60 
D) $13.70

Question 5

Use the following information for questions 
Clemente Inc. incurs the following costs to produce 10,000 units of a subcomponent: $$\begin{array} { l l } 
\text { Direct materials } & \$ 8,400 \
\text { Direct labor } & 11,250 \
\text { Variable overhead } & 12,600 \
\text { Fixed overhead } & 16,200
\end{array}$$ An outside supplier has offered to sell Clemente the subcomponent for $2.85 a unit.
-If Clemente could avoid $3,000 of fixed overhead by accepting the offer, net income would increase (decrease) by

Accepted Answer

A) $750. 
B) $(5,850). 
C) $(3,150). 
D) $6,750. 
A) $750. 
B) $(5,850). 
C) $(3,150). 
D) $6,750.

Question 6

Which one of the following does not affect a make-or-buy decision?

Accepted Answer

A) Variable manufacturing costs 
B) Opportunity costs 
C) Incremental revenue 
D) Direct labor 
A) Variable manufacturing costs 
B) Opportunity costs 
C) Incremental revenue 
D) Direct labor

Question 7

Galley Industries can produce 100 units of a necessary component part with the following costs: $$\begin{array} { l r } 
\text { Direct Materials } & \$ 20,000 \
\text { Direct Labor } & 9,000 \
\text { Variable Overhead } & 21,000 \
\text { Fixed Overhead } & 8,000
\end{array}$$ If Galley Industries purchases the component externally, $2,000 of the fixed costs can be avoided. Below what external price for the 100 units would Galley choose to buy instead of make?

Accepted Answer

A) $50,000 
B) $56,000 
C) $44,000 
D) $52,000 
A) $50,000 
B) $56,000 
C) $44,000 
D) $52,000

Question 8

The opportunity cost of an alternate course of action that is relevant to a make-or-buy decision is

Accepted Answer

A) subtracted from the "Make" costs. 
B) added to the "Make" costs. 
C) added to the "Buy" costs. 
D) None of these answers are correct. 
A) subtracted from the "Make" costs. 
B) added to the "Make" costs. 
C) added to the "Buy" costs. 
D) None of these answers are correct.

Question 9

A major accounting contribution to the managerial decision-making process in evaluating possible courses of action is to

Accepted Answer

A) assign responsibility for the decision. 
B) provide relevant revenue and cost data about each course of action. 
C) determine the amount of money that should be spent on a project. 
D) decide which actions that management should consider. 
A) assign responsibility for the decision. 
B) provide relevant revenue and cost data about each course of action. 
C) determine the amount of money that should be spent on a project. 
D) decide which actions that management should consider.

Question 10

Incremental analysis is most useful

Accepted Answer

A) in developing relevant information for management decisions. 
B) in choosing between capital budgeting methods. 
C) in evaluating the master budget. 
D) as a replacement technique for variance analysis. 
A) in developing relevant information for management decisions. 
B) in choosing between capital budgeting methods. 
C) in evaluating the master budget. 
D) as a replacement technique for variance analysis.

Question 11

Which of the following terms are synonymous?

Accepted Answer

A) Avoidable costs and irrelevant costs 
B) Unavoidable costs and incremental costs 
C) Sunk costs and relevant costs 
D) Joint costs and sunk costs 
A) Avoidable costs and irrelevant costs 
B) Unavoidable costs and incremental costs 
C) Sunk costs and relevant costs 
D) Joint costs and sunk costs

Question 12

Use the following information for questions 
Hi-Tech Inc. has several outdated computers that cost a total of $17,800 and could be sold as scrap for $4,600. They could be updated for an additional $2,400 and sold. If Hi-Tech updates the computers and sells them, net income will increase by $9,000.
-At what price were the updated versions sold?

Accepted Answer

A) $26,800 
B) $13,200 
C) $13,600 
D) $16,000 
A) $26,800 
B) $13,200 
C) $13,600 
D) $16,000

Question 13

The basic decision rule in a sell or process further decision is: process further if the incremental revenue from processing exceeds the incremental processing costs.

Accepted Answer

A) True 
 B)False

Question 14

A company is within plant capacity. It is contemplating whether a special order should be accepted. The order will not impact regular sales. If the company accepts the special order, what will occur?

Accepted Answer

A) Incremental costs will not be affected. 
B) Net income will increase if the special sales price per unit exceeds the unit variable costs. 
C) There are no incremental revenues. 
D) Both fixed and variable costs will increase. 
A) Incremental costs will not be affected. 
B) Net income will increase if the special sales price per unit exceeds the unit variable costs. 
C) There are no incremental revenues. 
D) Both fixed and variable costs will increase.

Question 15

Relevant costs are always

Accepted Answer

A) fixed costs. 
B) variable costs. 
C) avoidable costs. 
D) sunk costs. 
A) fixed costs. 
B) variable costs. 
C) avoidable costs. 
D) sunk costs.

Question 16

Billings Company has the following costs when producing 100,000 units: Variable costs $\quad \$ 600,000$
Fixed costs $\quad 900,000$ An outside supplier has offered to make the item at $4.50 a unit. If the decision is made to purchase the item outside, current production facilities could be leased to another company for $165,000. The net increase (decrease) in the net income of accepting the supplier's offer is

Accepted Answer

A) $285,000. 
B) $315,000. 
C) $(15,000). 
D) $840,000. 
A) $285,000. 
B) $315,000. 
C) $(15,000). 
D) $840,000.

Question 17

Which of the following steps in the management decision-making process does not generally involve the managerial accountant?

Accepted Answer

A) Determine possible courses of action 
B) Make the appropriate decision based on relevant data 
C) Prepare internal reports that review the impact of decisions 
D) None of these answers are correct. 
A) Determine possible courses of action 
B) Make the appropriate decision based on relevant data 
C) Prepare internal reports that review the impact of decisions 
D) None of these answers are correct.

Question 18

Which of the following would generally not affect a make-or-buy decision?

Accepted Answer

A) Selling expenses 
B) Direct labor 
C) Variable manufacturing costs 
D) Opportunity cost 
A) Selling expenses 
B) Direct labor 
C) Variable manufacturing costs 
D) Opportunity cost

Question 19

The basic decision rule in a sell or process further decision is: sell without further processing as long as the incremental revenue from processing exceeds the incremental processing costs.

Accepted Answer

A) True 
 B)False

Question 20

The focus of a sell or process further decision is

Accepted Answer

A) incremental revenue. 
B) incremental cost. 
C) both incremental revenue and incremental cost. 
D) neither incremental revenue nor incremental cost. 
A) incremental revenue. 
B) incremental cost. 
C) both incremental revenue and incremental cost. 
D) neither incremental revenue nor incremental cost.

A cost that cannot be changed by any present or future decision is a(n) A)incremental cost. b opportunity cost. C)sunk cost. D)variable cost.

Incremental analysis is synonymous with

Which one of the following does not affect a make-or-buy decision?

The opportunity cost of an alternate course of action that is relevant to a make-or-buy decision is

A major accounting contribution to the managerial decision-making process in evaluating possible courses of action is to

Incremental analysis is most useful

Which of the following terms are synonymous?

The basic decision rule in a sell or process further decision is: process further if the incremental revenue from processing exceeds the incremental processing costs.

A company is within plant capacity. It is contemplating whether a special order should be accepted. The order will not impact regular sales. If the company accepts the special order, what will occur?

Relevant costs are always

Which of the following steps in the management decision-making process does not generally involve the managerial accountant?

Which of the following would generally not affect a make-or-buy decision?

The basic decision rule in a sell or process further decision is: sell without further processing as long as the incremental revenue from processing exceeds the incremental processing costs.

The focus of a sell or process further decision is

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: The Big Picture

Managerial Accounting

Job Order Costing

Process Costing

Activity-Based Costing

Cost-Volume-Profit

Cost-Volume-Profit Analysis: Additional Issues

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

Filters

Exam 19: Incremental Analysis

A cost that cannot be changed by any present or future decision is a(n) A)incremental cost. b opportunity cost. C)sunk cost. D)variable cost.

Incremental analysis is synonymous with

Which one of the following does not affect a make-or-buy decision?

The opportunity cost of an alternate course of action that is relevant to a make-or-buy decision is

A major accounting contribution to the managerial decision-making process in evaluating possible courses of action is to

Incremental analysis is most useful

Which of the following terms are synonymous?

The basic decision rule in a sell or process further decision is: process further if the incremental revenue from processing exceeds the incremental processing costs.

A company is within plant capacity. It is contemplating whether a special order should be accepted. The order will not impact regular sales. If the company accepts the special order, what will occur?

Relevant costs are always

Which of the following steps in the management decision-making process does not generally involve the managerial accountant?

Which of the following would generally not affect a make-or-buy decision?

The basic decision rule in a sell or process further decision is: sell without further processing as long as the incremental revenue from processing exceeds the incremental processing costs.

The focus of a sell or process further decision is

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: The Big Picture

Managerial Accounting

Job Order Costing

Process Costing

Activity-Based Costing

Cost-Volume-Profit

Cost-Volume-Profit Analysis: Additional Issues

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

Filters