Exam 26: Standard Costs and Balanced Scorecard

A cost that cannot be changed by any present or future decision is a(n)

From a quantitative standpoint, a segment should be eliminated if its contribution margin is less than the fixed costs that can be eliminated.

Pratt Company has old inventory on hand that cost $12,000. Its scrap value is $16,000. The inventory could be sold for $40,000 if manufactured further at an additional cost of $12,000. What should Pratt do?

Meierhoff Company provided the following information concerning two products: Instructions Compute the contribution margin per unit of limited resource for each product. Which product should Meierhoff tell its sales personnel to 'push' to customers?

Using the net present value method, a net present value of zero indicates that the project would be acceptable.

The process of evaluating financial data that change under alternative courses of action is called

To determine annual cash inflow, depreciation is

A special one-time order should never be accepted if the unit sales price is less than the unit variable cost.

A company has three product lines, one of which reflects the following results: If this product line is eliminated, 60% of the fixed expenses can be eliminated and the other 40% will be allocated to other product lines. If management decides to eliminate this product line, the company's net income will

An opportunity cost is the potential benefit obtained by using resources in an alternative course of action.

Which of the following is not a common method of capital budgeting?

Aaron Co. is considering purchasing a new machine which will cost $200,000, but which will decrease costs each year by $40,000. The useful life of the machine is 10 years. The machine would be depreciated straight-line with no residual value over its useful life at the rate of $20,000/year. The cash payback period is

Which one of the following is correct?

Kinder Enterprises relies heavily on a copier machine to process its paperwork. Recently the copy clerk has not been able to process all the necessary copies within the regular work week. Management is considering updating the copier machine with a faster model. If sold now, the current copier would have a salvage value of $1,000. If operated for the remainder of its useful life, the current machine would have zero salvage value. The new machine is expected to have zero salvage value after five years. Instructions Prepare an analysis to show whether the company should retain or replace the machine.

Use the following table, A company has a minimum required rate of return of 8% and is considering investing in a project that costs $68,337 and is expected to generate cash inflows of $27,000 each year for three years. The approximate internal rate of return on this project is

Finney Company estimates the following cash flows and depreciation on a project that will cost $200,000 and will last 10 years with no salvage value: Instructions (a) Calculate the expected annual rate of return on this project showing calculations to support your answer. (b) Calculate the cash payback on this project showing calculations to support your answer.

Which of the following is a true statement about cost behaviors in incremental analysis? 1) Fixed costs will not change between alternatives. 2) Fixed costs may change between alternatives. 3) Variable costs will always change between alternatives.

Fehr Company is considering two capital investment proposals. Estimates regarding each project are provided below: The company requires a 10% rate of return on all new investments. The internal rate of return for Project Gray is approximately

The focus of a sell or process further decision is

New Age Makeup produces face cream. Each bottle of face cream costs $10 to produce and can be sold for $13. The bottles can be sold as is, or processed further into sunscreen at a cost of $14 each. New Age Makeup could sell the sunscreen bottles for $23 each.