Question 1

After the tornado in Lethbridge,Alberta,businesses were trying to sell lumber for 50 percent above their regular prices.What is this an example of?

Accepted Answer

A) predatory prices 
B) price discrimination 
C) price gouging 
D) penetration pricing 
A) predatory prices 
B) price discrimination 
C) price gouging 
D) penetration pricing

Question 2

Compare and contrast the various pricing policies used by companies.

Accepted Answer

Cost is an important determinant of supp

Question 3

Barmore Company has the following information pertaining to its two divisions for the current year:
$\begin{array}{lrr}
&\text { Division } A&\text { Division } B\
\text { Variable selling and admin. expenses } & \$ 35,000 & \$ 45,000 \
\text { Direct fixed manufacturing expenses } & 17,500 & 50,000 \
\text { Sales } & 100,000 & 200,000 \
\text { Direct fixed selling and admin. expenses } & 15,000 & 35,000 \
\text { Variable manufacturing expenses } & 20,000 & 50,000
\end{array}$  Common expenses are $12,000 for the current year.
-Refer to the figure.What is the net income for Barmore Company?

Accepted Answer

A) $20,500 
B) $32,500 
C) $150,000 
D) $300,000 
A) $20,500 
B) $32,500 
C) $150,000 
D) $300,000

Question 4

Anderson Company manufactures a variety of toys and games. John Boone, president, is disappointed in the sales of a new board game. The game sold only 10,000 units in the current year when 30,000 were projected. Sales for the following year look no better. At $100 per game, it is not a hot seller. Direct costs of the board game are $56 variable cost and $100,000 fixed. John is considering several options. Option One: Cut the price to $70 and perhaps sell 15,000 units. Option Two: Cut the price to $60, reduce material costs by $10, and cut advertising by $60,000. Anticipated volume for this option is 10,000 units. Option Three: Cut the price to $80 and include a $10 mail-in rebate offer. It is anticipated that 15,000 units could be sold and only 30 percent of the rebate coupons would be redeemed. Option Four:  Cut the price to $60 per game and possibly sell 20,000 units.
-Refer to the figure.What is the profit or loss from Option Three?

Accepted Answer

A) ($60,000) 
B) $110,000 
C) $215,000 
D) $1,200,000 
A) ($60,000) 
B) $110,000 
C) $215,000 
D) $1,200,000

Question 5

Toshi Company incurred the following costs in manufacturing desk calculators: $\begin{array}{lr}
  \text {  Direct materials} &\$14\
 \text {Indirect materials (variable)  } &4\
 \text {Direct labour } &8\
 \text {Indirect labour (variable)} &6\
 \text { Other variable factory overhead } &10\
 \text {Fixed factory overhead} &28\
 \text {Variable selling expenses}&20\
 \text {Fixed selling expenses}&14 
\end{array}$
 During the period,the company produced and sold 1,000 units.
What is the inventory cost per unit using variable costing?

Accepted Answer

A) $42 
B) $52 
C) $62 
D) $70 
A) $42 
B) $52 
C) $62 
D) $70

Question 6

Eastwood Company has the following information for the current year:
$\begin{array}{llcc}
  \text { Selling price } &  \text { \$ 150 per unit } \
  \text {  Variable production costs} &  \text {  \$ 40 per unit producer } \ 
  \text {  Variable selling and admin. expenses} &  \text { \$ 16 per unit sold } \
  \text { Fixed production costs } &  \text {  \$ 200,000  } \
  \text { Fixed selling and admin. expenses } &  \text {\$ 140,000  } \ 
 \text {  Units produced} &  \text {  10,000 units} \
  \text {Units sold  } &  \text { 8.000 units } \
\end{array}$
  There were no beginning inventories.
-Refer to the figure.What is the net income for Eastwood using the variable costing method?

Accepted Answer

A) $412,000 
B) $480,000 
C) $600,000 
D) $1,200,000 
A) $412,000 
B) $480,000 
C) $600,000 
D) $1,200,000

Question 7

Taylor Company’s budgeted sales were 10,000 units at $200 per unit. Actual sales were 9,200 units at $210 per unit.
-Refer to the figure.What is Taylor's sales price variance?

Accepted Answer

A) $8,000 (U) 
B) $68,000 (U) 
C) $92,000 (F) 
D) $100,000 (U) 
A) $8,000 (U) 
B) $68,000 (U) 
C) $92,000 (F) 
D) $100,000 (U)

Question 8

Which of the following markets is characterized by the following: a single firm in the industry,a unique product,and difficult entry into the industry?

Accepted Answer

A) perfectly competitive market 
B) monopolistic competition 
C) monopoly 
D) oligopoly 
A) perfectly competitive market 
B) monopolistic competition 
C) monopoly 
D) oligopoly

Question 9

Which of the following is said to occur when firms with market power price products "too high"?

Accepted Answer

A) predatory prices 
B) price discrimination 
C) price gouging 
D) penetration pricing 
A) predatory prices 
B) price discrimination 
C) price gouging 
D) penetration pricing

Question 10

Anderson Company manufactures a variety of toys and games. John Boone, president, is disappointed in the sales of a new board game. The game sold only 10,000 units in the current year when 30,000 were projected. Sales for the following year look no better. At $100 per game, it is not a hot seller. Direct costs of the board game are $56 variable cost and $100,000 fixed. John is considering several options. Option One: Cut the price to $70 and perhaps sell 15,000 units. Option Two: Cut the price to $60, reduce material costs by $10, and cut advertising by $60,000. Anticipated volume for this option is 10,000 units. Option Three: Cut the price to $80 and include a $10 mail-in rebate offer. It is anticipated that 15,000 units could be sold and only 30 percent of the rebate coupons would be redeemed. Option Four:  Cut the price to $60 per game and possibly sell 20,000 units.
-Refer to the figure.What customer type is the most profitable?

Accepted Answer

A) local pharmacies 
B) drugstore chains 
C) supermarket chains 
D) gas station chains 
A) local pharmacies 
B) drugstore chains 
C) supermarket chains 
D) gas station chains

Question 11

When production is less than sales volume,how will net income under absorption costing compare to profits using variable costing procedures?

Accepted Answer

A) Net income under absorption costing will be greater than profits using variable costing procedures. 
B) Net income under absorption costing will be less than profits using variable costing procedures. 
C) Net income under absorption costing will be equal to profits using variable costing procedures. 
D) Net income under absorption costing will be randomly different than profits using variable costing procedures. 
A) Net income under absorption costing will be greater than profits using variable costing procedures. 
B) Net income under absorption costing will be less than profits using variable costing procedures. 
C) Net income under absorption costing will be equal to profits using variable costing procedures. 
D) Net income under absorption costing will be randomly different than profits using variable costing procedures.

Question 12

Price skimming occurs in which of the following life-cycle stages?

Accepted Answer

A) introduction 
B) growth 
C) maturity 
D) decline 
A) introduction 
B) growth 
C) maturity 
D) decline

Question 13

The following information pertains to Mayberry Corporation: $\begin{array}{lr}
  \text {  Beginning inventory} &1,000 \text { units }\
 \text {  Ending inventory} &6,000 \text { units }\
 \text { Direct labour per unit } &\$40\
 \text {  Direct materials per unit} &20\
 \text {Variable overhead per unit  } &10\
 \text {Fixed overhead per unit  } &30\
 \text { Variable selling and admin. costs per unit } &6\
 \text {Fixed selling and admin costs ner unit.  } &14\
\end{array}$

What is the value of the ending inventory using the variable costing method?

Accepted Answer

A) $240,000 
B) $350,000 
C) $360,000 
D) $420,000 
A) $240,000 
B) $350,000 
C) $360,000 
D) $420,000

Question 14

Baker Company produced 30,000 units and sold 28,000 units in the current year.Beginning inventory was zero.During the period,the following costs were incurred:
 $\begin{array}{llr}
  \text { Indirect labour } &\$60,000\
 \text {  Indirect materials} &30,000\
 \text { Other (variable overhead) } &90,000\
 \text { Fixed manufacturing overhead } &180,000\
 \text { Fixed administrative expenses } &150,000\
 \text { Fixed selling expenses } &120,000\
 \text {Variable selling expenses, per unit  } &40\
 \text { Direct labour, per unit } &80\
 \text { Direct materials, per unit } &20\
\end{array}$
 Compute the dollar amount of ending inventory using: 
a.Absorption costing
b.Variable costing

Accepted Answer

None

Question 15

Which of the following product life-cycle stages involves revenues for the entire industry decreasing?

Accepted Answer

A) introduction 
B) growth 
C) maturity 
D) decline 
A) introduction 
B) growth 
C) maturity 
D) decline

Question 16

Which of the following markets is characterized by the following: many firms in the industry,a somewhat unique product,fairly easy entry into the industry,and spending for differentiation of the product?

Accepted Answer

A) perfectly competitive market 
B) monopolistic competition 
C) monopoly 
D) oligopoly 
A) perfectly competitive market 
B) monopolistic competition 
C) monopoly 
D) oligopoly

Question 17

Which of the following correctly describes the slope of the demand and supply curves?

$\begin{array}{llcc}
&\underline{  \text { Demand Curve } }&& \underline{ \text {
Supply Curve  }} \
\end{array}$
A)$\begin{array}{llcc}
  \text { upward sloping } &&  \text {  downward sloping} \
\end{array}$
B)$\begin{array}{llcc}
  \text {  no slope} &&&&&&  \text {upward sloping  } \
\end{array}$
C)$\begin{array}{llcc}
  \text {  downward sloping } &&  \text {no slope  } \
\end{array}$
D)$\begin{array}{llcc}
  \text { downward sloping } &&  \text { upward sloping } \
\end{array}$

Accepted Answer

The answer of Which of the following correctly describes the...

Question 18

Which of the following product life-cycle stages comes first?

Accepted Answer

A) introduction 
B) growth 
C) development 
D) decline 
A) introduction 
B) growth 
C) development 
D) decline

Question 19

Toshi Company incurred the following costs in manufacturing desk calculators: $\begin{array}{llr}
  \text {  Direct materials} &\$14\
 \text {  Indirect materials (variable)} &4\
 \text { Direct labour } &8\
 \text {Indirect labour (variable)  } &6\
 \text { Other variable factory overhead } &10\
 \text {  Fixed factory overhead} &28\
 \text {  Variable selling expenses} &20\
 \text { Fixed selling expenses } &14\
\end{array}$
 During the period,the company produced and sold 1,000 units.
What is the inventory cost per unit using absorption costing?

Accepted Answer

A) $32 
B) $70 
C) $84 
D) $104 
A) $32 
B) $70 
C) $84 
D) $104

Question 20

Which of the following product life-cycle stages is characterized by rapid increases in sales and production?

Accepted Answer

A) introduction 
B) growth 
C) maturity 
D) decline 
A) introduction 
B) growth 
C) maturity 
D) decline

After the tornado in Lethbridge,Alberta,businesses were trying to sell lumber for 50 percent above their regular prices.What is this an example of?

Compare and contrast the various pricing policies used by companies.

Taylor Company’s budgeted sales were 10,000 units at $200 per unit. Actual sales were 9,200 units at $210 per unit. -Refer to the figure.What is Taylor's sales price variance?

Which of the following markets is characterized by the following: a single firm in the industry,a unique product,and difficult entry into the industry?

Which of the following is said to occur when firms with market power price products "too high"?

When production is less than sales volume,how will net income under absorption costing compare to profits using variable costing procedures?

Price skimming occurs in which of the following life-cycle stages?

Which of the following product life-cycle stages involves revenues for the entire industry decreasing?

Which of the following markets is characterized by the following: many firms in the industry,a somewhat unique product,fairly easy entry into the industry,and spending for differentiation of the product?

Which of the following correctly describes the slope of the demand and supply curves? A) upward sloping downward sloping B) no slope upward sloping C) downward sloping no slope D) downward sloping upward sloping

Which of the following product life-cycle stages comes first?

Which of the following product life-cycle stages is characterized by rapid increases in sales and production?

A: Basic Cost Management Concepts

B: Basic Cost Management Concepts

Cost Behaviour

Cost-Volume-Profit Analysis

Job-Order Costing Systems

Process Costing

Activity-Based Costing

Allocating Costs of Support Departments and Joint Products

Budgeting for Planning and Control

Standard Costing: a Functional-Based Control Approach

Responsibility Accounting,performance Evaluation,and Transfer Pricing

Tactical Decision Making

Strategic Cost Management

Activity-Based Management

The Balanced Scorecard: Strategic-Based Control

Quality and Environmental Cost Management

Lean Accounting and Productivity Measurement

Inventory Management: Economic Order Quantity,jit,and the Theory of Constraints

Filters

Exam 12: Pricing and Profitability Analysis

After the tornado in Lethbridge,Alberta,businesses were trying to sell lumber for 50 percent above their regular prices.What is this an example of?

Compare and contrast the various pricing policies used by companies.

Taylor Company’s budgeted sales were 10,000 units at $200 per unit. Actual sales were 9,200 units at $210 per unit. -Refer to the figure.What is Taylor's sales price variance?

Which of the following markets is characterized by the following: a single firm in the industry,a unique product,and difficult entry into the industry?

Which of the following is said to occur when firms with market power price products "too high"?

When production is less than sales volume,how will net income under absorption costing compare to profits using variable costing procedures?

Price skimming occurs in which of the following life-cycle stages?

Which of the following product life-cycle stages involves revenues for the entire industry decreasing?

Which of the following markets is characterized by the following: many firms in the industry,a somewhat unique product,fairly easy entry into the industry,and spending for differentiation of the product?

Which of the following correctly describes the slope of the demand and supply curves? A) upward sloping downward sloping B) no slope upward sloping C) downward sloping no slope D) downward sloping upward sloping

Which of the following product life-cycle stages comes first?

Which of the following product life-cycle stages is characterized by rapid increases in sales and production?

A: Basic Cost Management Concepts

B: Basic Cost Management Concepts

Cost Behaviour

Cost-Volume-Profit Analysis

Job-Order Costing Systems

Process Costing

Activity-Based Costing

Allocating Costs of Support Departments and Joint Products

Budgeting for Planning and Control

Standard Costing: a Functional-Based Control Approach

Responsibility Accounting,performance Evaluation,and Transfer Pricing

Tactical Decision Making

Strategic Cost Management

Activity-Based Management

The Balanced Scorecard: Strategic-Based Control

Quality and Environmental Cost Management

Lean Accounting and Productivity Measurement

Inventory Management: Economic Order Quantity,jit,and the Theory of Constraints

Filters