Question 1

A manufacturer's raw-material purchasing department would likely be classified as a:

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 2

Which of the following fail to be captured and reported by a company's accounting system as an environmental cost?

Accepted Answer

A) Monitoring costs. 
B) Abatement costs. 
C) Hidden costs. 
D) On-site remediation costs. 
E) Off-site remediation costs. 
A) Monitoring costs. 
B) Abatement costs. 
C) Hidden costs. 
D) On-site remediation costs. 
E) Off-site remediation costs.

Question 3

Which of the following would be the best measure on which to base a segment manager's performance evaluation for purposes of granting a bonus?

Accepted Answer

A) Segment sales revenue. 
B) Segment contribution margin. 
C) Profit margin controllable by the segment manager. 
D) Segment profit margin. 
E) Segment net incomE. 
A) Segment sales revenue. 
B) Segment contribution margin. 
C) Profit margin controllable by the segment manager. 
D) Segment profit margin. 
E) Segment net incomE.

Question 4

A cost center manager does not have the ability to produce revenue.

Accepted Answer

A) True 
 B)False

Question 5

Baker Enterprises implemented a total quality management (TQM)program at the beginning of 20x1,closely monitoring amounts spent on prevention cost,appraisal cost,internal failure cost,and external failure cost.By the end of 20x3,Baker noted a significant improvement in the quality of its finished-goods production,with management sensing that the firm was close to "optimum results from both a quality and expenditure perspective." The quality improvement,coupled with favorable ratings in Consumer Reports,has led to a sizable boost in sales volume.
Required:
A.Present two examples of prevention costs,appraisal costs,internal failure costs,and external failure costs.
A.Prevention: Quality training,reliability engineering,pilot studies,machine maintenance,purchase of top quality materials
Appraisal: Inspection,reliability testing
Internal failure: Scrap,repair,rework,downtime
External failure: Warranty costs,customer complaints,lawsuits,transportation costs to customer sites to fix problems,product returns,price allowances
B.1.Decrease: the company is close to the optimum point from an expenditure perspective.
2.Decrease: increased sales from quality improvements and favorable ratings likely translate into fewer lost sales and a better reputation.
3.Increase: more money spent upfront on prevention and appraisal costs will drive down failure costs,resulting in decreased total quality costs for the firm.
4.Decrease: highly effective prevention programs often result in a reduced need for inspection.
B.Baker's TQM program is functioning as expected from an operational perspective.In view of this situation,what has likely happened (increase,decrease,or no effect)to:
1.The amount spent on total quality costs from 20x1 through 20x3.
2.The amount of hidden costs incurred by the company from 20x1 through 20x3.
3.The percentage of quality expenditures on prevention and appraisal costs relative to the sum of internal and external failure costs.
4.The amount of effort expended on appraisal efforts if the company has gone somewhat overboard in its prevention programs.

Accepted Answer

A.Prevention:Quality training,reliabilit

Question 6

Which of the following is an appropriate base to distribute the cost of building depreciation to responsibility centers?

Accepted Answer

A) Number of employees in the responsibility centers. 
B) Budgeted sales dollars of the responsibility centers. 
C) Square feet occupied by the responsibility centers. 
D) Budgeted net income of the responsibility centers. 
E) Total budgeted direct operating costs of the responsibility centers. 
A) Number of employees in the responsibility centers. 
B) Budgeted sales dollars of the responsibility centers. 
C) Square feet occupied by the responsibility centers. 
D) Budgeted net income of the responsibility centers. 
E) Total budgeted direct operating costs of the responsibility centers.

Question 7

A company that strives to maximize the value of its pollution-related activities would follow a(n):

Accepted Answer

A) process improvement strategy. 
B) prevention strategy. 
C) end-of-pipe strategy. 
D) visible cost strategy. 
E) matrix strategy. 
A) process improvement strategy. 
B) prevention strategy. 
C) end-of-pipe strategy. 
D) visible cost strategy. 
E) matrix strategy.

Question 8

Guernsey Retail has three stores in Wisconsin.Which of the following costs would likely be excluded when computing the profit margin controllable by store no.3's manager?

Accepted Answer

A) Hourly labor costs incurred by personnel at store no.3. 
B) Property taxes attributable to store no.3. 
C) The salary of Guernsey's president. 
D) The salary of store no.3's manager. 
E) Items "B," "C," and "D" abovE. 
A) Hourly labor costs incurred by personnel at store no.3. 
B) Property taxes attributable to store no.3. 
C) The salary of Guernsey's president. 
D) The salary of store no.3's manager. 
E) Items "B," "C," and "D" abovE.

Question 9

The concepts and tools used to measure the performance of people and departments are known as:

Accepted Answer

A) goal congruence. 
B) planning and control. 
C) responsibility accounting. 
D) delegation of decision making. 
E) strategic control. 
A) goal congruence. 
B) planning and control. 
C) responsibility accounting. 
D) delegation of decision making. 
E) strategic control.

Question 10

A cost object is:

Accepted Answer

A) a collection of costs to be assigned. 
B) a responsibility center,product,or service to which cost is to be assigned. 
C) the tool used to charge cost dollars to user departments. 
D) the primary function of a responsibility accounting system. 
E) a common cost. 
A) a collection of costs to be assigned. 
B) a responsibility center,product,or service to which cost is to be assigned. 
C) the tool used to charge cost dollars to user departments. 
D) the primary function of a responsibility accounting system. 
E) a common cost.

Question 11

The following data relate to Department no.2 of Eva Corporation:  
On the basis of this information,fixed costs traceable to Department no.2 but controllable by others are:

Accepted Answer

A) $160,000. 
B) $220,000. 
C) $260,000. 
D) $480,000. 
E) not determinablE. 
A) $160,000. 
B) $220,000. 
C) $260,000. 
D) $480,000. 
E) not determinablE.

Question 12

Controllable costs,as used in a responsibility accounting system,consist of:

Accepted Answer

A) only fixed costs. 
B) only direct materials and direct labor. 
C) those costs that a manager can influence in the time period under review. 
D) those costs about which a manager has some knowledge. 
E) those costs that are influenced by parties external to the organization. 
A) only fixed costs. 
B) only direct materials and direct labor. 
C) those costs that a manager can influence in the time period under review. 
D) those costs about which a manager has some knowledge. 
E) those costs that are influenced by parties external to the organization.

Question 13

Bay Area's segment profit margin is:

Accepted Answer

A) $14,000. 
B) $18,000. 
C) $20,000. 
D) $40,000. 
E) $115,000. 
A) $14,000. 
B) $18,000. 
C) $20,000. 
D) $40,000. 
E) $115,000.

Question 14

The following data relate to Department no.3 of Tsing Corporation:  
On the basis of this information,Department no.3's variable operating expenses are:

Accepted Answer

A) $80,000. 
B) $160,000. 
C) $230,000. 
D) $390,000. 
E) not determinablE. 
A) $80,000. 
B) $160,000. 
C) $230,000. 
D) $390,000. 
E) not determinablE.

Question 15

Which of the following would have a low likelihood of being organized as a profit center?

Accepted Answer

A) A movie theater of a company that operates a chain of theaters. 
B) A maintenance department that charges users for its services. 
C) The billing department of an Internet Services Provider (ISP). 
D) The mayor's office in a large city. 
E) Both "C" and "D" abovE. 
A) A movie theater of a company that operates a chain of theaters. 
B) A maintenance department that charges users for its services. 
C) The billing department of an Internet Services Provider (ISP). 
D) The mayor's office in a large city. 
E) Both "C" and "D" abovE.

Question 16

If advertising expense were allocated to centers based on actual center profitability,the amount of advertising expense allocated to the Irvine center would be closest to:

Accepted Answer

A) $19,800. 
B) $21,000. 
C) $30,000. 
D) $40,543. 
E) Some other amount. 
A) $19,800. 
B) $21,000. 
C) $30,000. 
D) $40,543. 
E) Some other amount.

Question 17

For a company that uses responsibility accounting,which of the following costs is least likely to appear on a performance report of an assembly-line supervisor?

Accepted Answer

A) Direct materials used. 
B) Departmental supplies. 
C) Assembly-line labor. 
D) Repairs and maintenance. 
E) Assembly-line facilities depreciation. 
A) Direct materials used. 
B) Departmental supplies. 
C) Assembly-line labor. 
D) Repairs and maintenance. 
E) Assembly-line facilities depreciation.

Question 18

Common costs:

Accepted Answer

A) are not easily related to a segment's activities. 
B) are easily related to a segment's activities. 
C) are charged to a company's operating segments when preparing a segmented income statement. 
D) are not charged to a company's operating segments when preparing a segmented income statement. 
E) are best described by characteristics "A" and "D" abovE. 
A) are not easily related to a segment's activities. 
B) are easily related to a segment's activities. 
C) are charged to a company's operating segments when preparing a segmented income statement. 
D) are not charged to a company's operating segments when preparing a segmented income statement. 
E) are best described by characteristics "A" and "D" abovE.

Question 19

Which of the following costs is often considered the hardest to measure?

Accepted Answer

A) Prevention costs. 
B) Appraisal costs. 
C) Internal failure costs. 
D) External failure costs. 
E) The cost of lost sales. 
A) Prevention costs. 
B) Appraisal costs. 
C) Internal failure costs. 
D) External failure costs. 
E) The cost of lost sales.

Question 20

Which of the following amounts should be used to evaluate whether Restin,Inc. ,should continue to invest company resources in the Los Angeles division?

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.

A manufacturer's raw-material purchasing department would likely be classified as a:

Which of the following fail to be captured and reported by a company's accounting system as an environmental cost?

Which of the following would be the best measure on which to base a segment manager's performance evaluation for purposes of granting a bonus?

A cost center manager does not have the ability to produce revenue.

Which of the following is an appropriate base to distribute the cost of building depreciation to responsibility centers?

A company that strives to maximize the value of its pollution-related activities would follow a(n):

Guernsey Retail has three stores in Wisconsin.Which of the following costs would likely be excluded when computing the profit margin controllable by store no.3's manager?

The concepts and tools used to measure the performance of people and departments are known as:

A cost object is:

The following data relate to Department no.2 of Eva Corporation: On the basis of this information,fixed costs traceable to Department no.2 but controllable by others are:

Controllable costs,as used in a responsibility accounting system,consist of:

Bay Area's segment profit margin is:

The following data relate to Department no.3 of Tsing Corporation: On the basis of this information,Department no.3's variable operating expenses are:

Which of the following would have a low likelihood of being organized as a profit center?

If advertising expense were allocated to centers based on actual center profitability,the amount of advertising expense allocated to the Irvine center would be closest to:

For a company that uses responsibility accounting,which of the following costs is least likely to appear on a performance report of an assembly-line supervisor?

Common costs:

Which of the following costs is often considered the hardest to measure?

Which of the following amounts should be used to evaluate whether Restin,Inc. ,should continue to invest company resources in the Los Angeles division?

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

A manufacturer's raw-material purchasing department would likely be classified as a:

Which of the following fail to be captured and reported by a company's accounting system as an environmental cost?

Which of the following would be the best measure on which to base a segment manager's performance evaluation for purposes of granting a bonus?

A cost center manager does not have the ability to produce revenue.

Which of the following is an appropriate base to distribute the cost of building depreciation to responsibility centers?

A company that strives to maximize the value of its pollution-related activities would follow a(n):

Guernsey Retail has three stores in Wisconsin.Which of the following costs would likely be excluded when computing the profit margin controllable by store no.3's manager?

The concepts and tools used to measure the performance of people and departments are known as:

A cost object is:

The following data relate to Department no.2 of Eva Corporation: On the basis of this information,fixed costs traceable to Department no.2 but controllable by others are:

Controllable costs,as used in a responsibility accounting system,consist of:

Bay Area's segment profit margin is:

The following data relate to Department no.3 of Tsing Corporation: On the basis of this information,Department no.3's variable operating expenses are:

Which of the following would have a low likelihood of being organized as a profit center?

If advertising expense were allocated to centers based on actual center profitability,the amount of advertising expense allocated to the Irvine center would be closest to:

For a company that uses responsibility accounting,which of the following costs is least likely to appear on a performance report of an assembly-line supervisor?

Common costs:

Which of the following costs is often considered the hardest to measure?

Which of the following amounts should be used to evaluate whether Restin,Inc. ,should continue to invest company resources in the Los Angeles division?

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