Question 1

Quality of design refers to:

Accepted Answer

A) the extent to which a product meets the specifications of its design. 
B) the extent to which a product adds value to a firm's product line. 
C) the extent to which a product is designed for its intended use. 
D) the extent to which a product maximizes non-value-added activities in the production process. 
E) a cost control that is achievablE. 
A) the extent to which a product meets the specifications of its design. 
B) the extent to which a product adds value to a firm's product line. 
C) the extent to which a product is designed for its intended use. 
D) the extent to which a product maximizes non-value-added activities in the production process. 
E) a cost control that is achievablE. C

Question 2

Which of the following measures would reflect the variable costs incurred by a business segment?

Accepted Answer

A) Choice A 
B) Choice B 
C) Choice C 
D) Choice D 
E) Choice E 
A) Choice A 
B) Choice B 
C) Choice C 
D) Choice D 
E) Choice E D

Question 3

A responsibility center in which the manager is held accountable for the profitable use of assets and capital is commonly known as a(n):

Accepted Answer

A) cost center. 
B) revenue center. 
C) profit center. 
D) investment center. 
E) contribution center. 
A) cost center. 
B) revenue center. 
C) profit center. 
D) investment center. 
E) contribution center. D

Question 4

An investment center manager:

Accepted Answer

A) does not have the ability to produce revenue. 
B) may be involved with the sale of new marketing programs to clients. 
C) would normally be held accountable for producing an adequate return on invested capital. 
D) often oversees divisional operations. 
E) may be the manager who oversees the operations of a retail storE. 
A) does not have the ability to produce revenue. 
B) may be involved with the sale of new marketing programs to clients. 
C) would normally be held accountable for producing an adequate return on invested capital. 
D) often oversees divisional operations. 
E) may be the manager who oversees the operations of a retail storE.

Question 5

If the head of a hotel's food and beverage operation is held accountable for revenues and costs,the food and beverage operation would be considered a(n):

Accepted Answer

A) cost center. 
B) revenue center. 
C) profit center. 
D) investment center. 
E) contribution center. 
A) cost center. 
B) revenue center. 
C) profit center. 
D) investment center. 
E) contribution center.

Question 6

Performance reports help managers:

Accepted Answer

A) use management by exception and effectively control operations. 
B) decide whether a cost,profit,or investment center framework is appropriate. 
C) design their organizational hierarchy. 
D) pinpoint trouble spots. 
E) by assisting with functions "A" and "D." 
A) use management by exception and effectively control operations. 
B) decide whether a cost,profit,or investment center framework is appropriate. 
C) design their organizational hierarchy. 
D) pinpoint trouble spots. 
E) by assisting with functions "A" and "D."

Question 7

The costs that follow appeared on Omar's quality cost report:  
The sum of Omar's appraisal and internal failure costs is:

Accepted Answer

A) $10,000. 
B) $12,800. 
C) $22,800. 
D) $68,800. 
E) some other amount. 
A) $10,000. 
B) $12,800. 
C) $22,800. 
D) $68,800. 
E) some other amount.

Question 8

Assuming use of a responsibility accounting system,which of the following amounts should be used to evaluate the performance of the Los Angeles division manager?

Accepted Answer

A) $4,000. 
B) $8,000. 
C) $10,000. 
D) $25,000. 
E) $90,000. 
A) $4,000. 
B) $8,000. 
C) $10,000. 
D) $25,000. 
E) $90,000.

Question 9

A cost center manager:

Accepted Answer

A) does not have the ability to produce revenue. 
B) may be involved with the sale of new marketing programs to clients. 
C) would normally be held accountable for producing an adequate return on invested capital. 
D) often oversees divisional operations. 
E) may be the manager who oversees the operations of a retail storE. 
A) does not have the ability to produce revenue. 
B) may be involved with the sale of new marketing programs to clients. 
C) would normally be held accountable for producing an adequate return on invested capital. 
D) often oversees divisional operations. 
E) may be the manager who oversees the operations of a retail storE.

Question 10

Which of the following is not a typical quality-cost classification?

Accepted Answer

A) External failure cost. 
B) Internal failure cost. 
C) Production inefficiency cost. 
D) Prevention cost. 
E) Appraisal cost. 
A) External failure cost. 
B) Internal failure cost. 
C) Production inefficiency cost. 
D) Prevention cost. 
E) Appraisal cost.

Question 11

Which of the following is not an example of a responsibility center?

Accepted Answer

A) Cost center. 
B) Revenue center. 
C) Profit center. 
D) Investment center. 
E) Contribution center. 
A) Cost center. 
B) Revenue center. 
C) Profit center. 
D) Investment center. 
E) Contribution center.

Question 12

Consider the following situation:
The marketing manager of Gilroy,Inc.accepted a rush order for a nonstock item from a valued customer.The manager filed the necessary paperwork with the production department,and a production manager did the same with purchasing for needed raw materials.Unfortunately,a purchasing clerk temporarily lost the paperwork;by the time it was found,it was too late to order from Gilroy's regular supplier.A new supplier was located that quoted a very attractive price.
The materials soon arrived and were found to be of poor quality,thus giving rise to a favorable materials price variance,an unfavorable materials quantity variance,and an unfavorable labor efficiency variance.These latter two variances,based on normal practice,appeared on the production manager's performance report for the period just ended.
Required:
A.Given that the company uses a responsibility accounting system,should the production manager be penalized for poor performance? Briefly discuss,keeping in mind that a production manager is generally in a very good position to control material usage and labor efficiency.
A.No.Although the variances appear on the production manager's performance report and are often under his or her control,an adjustment is needed in this case.The problem appears to be the fault of the purchasing clerk who misplaced the paperwork.Another explanation may be that the fault lies with the marketing department for accepting a rush order and possibly putting a strain on the entire manufacturing system.
B.Should anything be done to correct the situation? If "yes," briefly explain.
B.Yes.These variances should be discussed to determine who's to blame and then cross-charged against that individual's department.

Accepted Answer

A.No.Although the variances appear on th

Question 13

Assume that management used the allocation base that is most influenced by advertising effort and consistent with sound managerial accounting practices.How much advertising would be allocated to the Irvine center?

Accepted Answer

A) $17,838. 
B) $19,800. 
C) $20,000. 
D) $20,400. 
E) $21,000. 
A) $17,838. 
B) $19,800. 
C) $20,000. 
D) $20,400. 
E) $21,000.

Question 14

Salvio Enterprises has identified the following as having an impact on the company's quality costs:
1.Inspection of manufactured goods on assembly line
2.Warranty repairs
3.Employee training
4.Quality engineering/design
5.Units repaired at customers' site
6.Product testing
7.Customer complaints
8.Product liability
9.Rework of defective goods before transfer to finished goods
10.Preventive maintenance for equipment
11.Evaluation of suppliers
Required:
A.
   
A.Classify the eleven costs as prevention,appraisal,internal failure,or external failure.
B.Briefly contrast the objective of traditional quality control and contemporary quality control.
B.The traditional view holds that the optimal level of product quality is a balancing act between failure costs and the costs of prevention and appraisal.The goal is to minimize total quality costs by operating at the point where failure costs equal the sum of prevention and appraisal costs.In contrast,the contemporary perspective holds that any deviations from a product's target specifications result in higher costs,with the optimal situation arising at the zero defect level.

Accepted Answer

A. @#IMG-DLM& B.The traditional view holds that th

Question 15

A profit center manager:

Accepted Answer

A) does not have the ability to produce revenue. 
B) may be involved with the sale of new marketing programs to clients. 
C) would normally be held accountable for producing an adequate return on invested capital. 
D) often oversees divisional operations. 
E) may be the manager who oversees the operations of a retail storE. 
A) does not have the ability to produce revenue. 
B) may be involved with the sale of new marketing programs to clients. 
C) would normally be held accountable for producing an adequate return on invested capital. 
D) often oversees divisional operations. 
E) may be the manager who oversees the operations of a retail storE.

Question 16

The profit margin controllable by the Central Valley segment manager is:

Accepted Answer

A) $32,000. 
B) $44,000. 
C) $50,000. 
D) $75,000. 
E) $145,000. 
A) $32,000. 
B) $44,000. 
C) $50,000. 
D) $75,000. 
E) $145,000.

Question 17

Under the contemporary view of product quality,companies should strive to:

Accepted Answer

A) balance failure costs with the sum of prevention and appraisal costs. 
B) increase total quality costs. 
C) Achieve zero defects in manufacturing. 
D) inspect after-the-fact rather than install a series of preventative manufacturing controls. 
E) operate at the top of the total quality cost curve. 
A) balance failure costs with the sum of prevention and appraisal costs. 
B) increase total quality costs. 
C) Achieve zero defects in manufacturing. 
D) inspect after-the-fact rather than install a series of preventative manufacturing controls. 
E) operate at the top of the total quality cost curve.

Question 18

Bluegrass,Inc. ,which is headquartered in Atlanta,operates a chain of 225 clothing stores throughout the United States.Consider the costs that appear in the following table,many of which pertain to the company's sole operation in Jacksonville,Florida:

Accepted Answer

@#IMG-DLM& 
Specify store maintenance as a fixed c

Question 19

A company that strives to maximize the value of its pollution-related activities would follow a process improvement strategy.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following costs would be classified as an appraisal cost on a quality report?

Accepted Answer

A) Reliability engineering. 
B) Materials inspection. 
C) Rework. 
D) Warranty repairs. 
E) Out-of-court liability settlements. 
A) Reliability engineering. 
B) Materials inspection. 
C) Rework. 
D) Warranty repairs. 
E) Out-of-court liability settlements.

Quality of design refers to:

Which of the following measures would reflect the variable costs incurred by a business segment?

A responsibility center in which the manager is held accountable for the profitable use of assets and capital is commonly known as a(n):

An investment center manager:

If the head of a hotel's food and beverage operation is held accountable for revenues and costs,the food and beverage operation would be considered a(n):

Performance reports help managers:

The costs that follow appeared on Omar's quality cost report: The sum of Omar's appraisal and internal failure costs is:

Assuming use of a responsibility accounting system,which of the following amounts should be used to evaluate the performance of the Los Angeles division manager?

A cost center manager:

Which of the following is not a typical quality-cost classification?

Which of the following is not an example of a responsibility center?

Assume that management used the allocation base that is most influenced by advertising effort and consistent with sound managerial accounting practices.How much advertising would be allocated to the Irvine center?

A profit center manager:

The profit margin controllable by the Central Valley segment manager is:

Under the contemporary view of product quality,companies should strive to:

Bluegrass,Inc. ,which is headquartered in Atlanta,operates a chain of 225 clothing stores throughout the United States.Consider the costs that appear in the following table,many of which pertain to the company's sole operation in Jacksonville,Florida:

A company that strives to maximize the value of its pollution-related activities would follow a process improvement strategy.

Which of the following costs would be classified as an appraisal cost on a quality report?

The Changing Role of Managerial Accounting in a Dynamic Business Environment

Basic Cost Management Concepts and Accounting for Mass Customization Operations

Product Costing and Cost Accumulation in a Batch Production Environment

Process Costing and Hybrid Product-Costing Systems

Activity-Based Costing and Management

Activity Analysis,cost Behavior,and Cost Estimation

Appendix I: The Sarbanes-Oxley Act, Internal Controls, and Management Accounting

Cost-Volume-Profit Analysis

Absorption and Variable Costing

Profit Planning and Activity-Based Budgeting

Standard Costing,Operational Performance Measures,and the Balanced Scorecard

Flexible Budgeting and the Management of Overhead and Support Activity Costs

Investment Centers and Transfer Pricing

Decision Making: Relevant Costs and Benefits

Target Costing and Cost Analysis for Pricing Decisions

Capital Expenditure Decisions

Allocation of Support Activity Costs and Joint Costs

compound Interest and the Concept of Present Value

Inventory Management

Filters

Exam 12: Responsibility Accounting, Quality Control, and Environmental Cost Management

Quality of design refers to:

Which of the following measures would reflect the variable costs incurred by a business segment?

A responsibility center in which the manager is held accountable for the profitable use of assets and capital is commonly known as a(n):

An investment center manager:

If the head of a hotel's food and beverage operation is held accountable for revenues and costs,the food and beverage operation would be considered a(n):

Performance reports help managers:

The costs that follow appeared on Omar's quality cost report: The sum of Omar's appraisal and internal failure costs is:

Assuming use of a responsibility accounting system,which of the following amounts should be used to evaluate the performance of the Los Angeles division manager?

A cost center manager:

Which of the following is not a typical quality-cost classification?

Which of the following is not an example of a responsibility center?

Assume that management used the allocation base that is most influenced by advertising effort and consistent with sound managerial accounting practices.How much advertising would be allocated to the Irvine center?

A profit center manager:

The profit margin controllable by the Central Valley segment manager is:

Under the contemporary view of product quality,companies should strive to:

Bluegrass,Inc. ,which is headquartered in Atlanta,operates a chain of 225 clothing stores throughout the United States.Consider the costs that appear in the following table,many of which pertain to the company's sole operation in Jacksonville,Florida:

A company that strives to maximize the value of its pollution-related activities would follow a process improvement strategy.

Which of the following costs would be classified as an appraisal cost on a quality report?

The Changing Role of Managerial Accounting in a Dynamic Business Environment

Basic Cost Management Concepts and Accounting for Mass Customization Operations

Product Costing and Cost Accumulation in a Batch Production Environment

Process Costing and Hybrid Product-Costing Systems

Activity-Based Costing and Management

Activity Analysis,cost Behavior,and Cost Estimation

Appendix I: The Sarbanes-Oxley Act, Internal Controls, and Management Accounting

Cost-Volume-Profit Analysis

Absorption and Variable Costing

Profit Planning and Activity-Based Budgeting

Standard Costing,Operational Performance Measures,and the Balanced Scorecard

Flexible Budgeting and the Management of Overhead and Support Activity Costs

Investment Centers and Transfer Pricing

Decision Making: Relevant Costs and Benefits

Target Costing and Cost Analysis for Pricing Decisions

Capital Expenditure Decisions

Allocation of Support Activity Costs and Joint Costs

compound Interest and the Concept of Present Value

Inventory Management

Filters