Question 1

The partial productivity of overhead resources can be measured by considering the cost driver as ________.

Accepted Answer

A)  budgeted input 
B)  the denominator 
C)  the fixed input 
D)  the numerator 
A)  budgeted input 
B)  the denominator 
C)  the fixed input 
D)  the numerator D

Question 2

Engineered costs contain a higher level of uncertainty than discretionary costs.

Accepted Answer

A) True 
 B)False  False

Question 3

Ralph Company has been very aggressive in developing various types of financial and nonfinancial measurement schemes to help with the evaluation of its manufacturing processes.It appears that some of the managers are suboptimizing in that their decision processes are geared solely for their department's benefit,sometimes to the detriment of the organization as a whole.
Required:
What changes in the evaluation system could the company implement to help minimize the suboptimization of the managers' decision-making process?

Accepted Answer

The company could implement a total factor productivity concept.Its major advantage is that it measures the combined productivity of all inputs to produce outputs and,therefore,explicitly evaluates substitution among inputs.For example,if buying a cheap material makes the cost of materials look favorable but causes more labor-hours,therefore causing labor costs to be unfavorable,suboptimization may be occurring.The total factor productivity takes into account both the materials costs and the labor costs and if they offset each other,that is fine,but if they do not offset,then the variance will be so noted.

Question 4

The lower the inputs for a given set of outputs or the higher the outputs for a given set of inputs,the higher the level of ________.

Accepted Answer

A)  overallocation 
B)  expenditure 
C)  productivity 
D)  labor costs 
A)  overallocation 
B)  expenditure 
C)  productivity 
D)  labor costs

Question 5

Answer the following questions using the information below:
Following a strategy of product differentiation, Arseniq Company makes a high-end Appliance, XT15. Arseniq presents the following data for the years 2014 and 2015:
 $\begin{array}{lrr}&2014&2015\
\text { Units of XT15 produced and sold } & 50,000 & 52,500 \
\text { Selling price } & \$ 500 & \$ 550 \
\text { Direct materials (square feet) } & 150,000 & 153,750 \
\text { Direct materials costs per square foot } & \$ 50 & \$ 55 \
\text { Manufacturing capacity in units of XT15 } & 62,500 & 62,500\
\text { Total conversion costs } & \$ 6,250,000 & \$ 6,875,000 \
\text { Conversion costs per unit of capacity } & \$ 100 & \$ 110 \
\text { Selling and customer-service capacity (customers) } & 150 & 150 \
\text { Total selling and customer-service costs } & \$ 2,250,000 & \$ 2,343,750 \
\text { Selling and customer-service capacity cost per customer } & \$ 15,000 & \$ 15,625
\end{array}$ Arseniq produces no defective units but it wants to reduce direct materials usage per unit of XT15. Manufacturing conversion costs in each year depend on production capacity defined in terms of XT15 units that can be produced. Selling and customer-service costs depend on the number of customers that the customer and service functions are designed to support. Arseniq had 140 customers in 2014 and 145 customers in 2015.
-What is the revenue effect of the price-recovery component?

Accepted Answer

A)  $2,625,000 U 
B)  $1,250,000 U 
C)  $1,250,000 F 
D)  $2,625,000 F 
A)  $2,625,000 U 
B)  $1,250,000 U 
C)  $1,250,000 F 
D)  $2,625,000 F

Question 6

When analyzing the change in operating income,the strategy component of growth will increase when more units are sold.

Accepted Answer

A) True 
 B)False

Question 7

Discretionary costs arise from periodic (usually annual)decisions regarding the maximum amount to be incurred.

Accepted Answer

A) True 
 B)False

Question 8

The cost effect of productivity for variable costs is calculated by multiplying the difference in actual input units used to produce current year output and units of input required to produce current year output in previous year by the ________.

Accepted Answer

A)  price per input unit of previous year 
B)  price per unit of capacity in the previous year 
C)  price per unit of capacity in the current year 
D)  price per input unit of current year 
A)  price per input unit of previous year 
B)  price per unit of capacity in the previous year 
C)  price per unit of capacity in the current year 
D)  price per input unit of current year

Question 9

Direct material cost is an example of ________.

Accepted Answer

A)  conversion costs 
B)  discretionary costs 
C)  engineered costs 
D)  downsized costs 
A)  conversion costs 
B)  discretionary costs 
C)  engineered costs 
D)  downsized costs

Question 10

________ perspective of the balanced scorecard focuses on a company's own operations that create value for customers that,in turn,help achieve financial objectives.

Accepted Answer

A)  Financial 
B)  Customer 
C)  Internal-business-process 
D)  Learning-and-growth 
A)  Financial 
B)  Customer 
C)  Internal-business-process 
D)  Learning-and-growth

Question 11

When adequate capacity exists in the current year to produce next year's output,the cost effect of growth for capacity-related fixed costs will be zero.

Accepted Answer

A) True 
 B)False

Question 12

When analyzing the change in operating income,the strategy component of price-recovery ________.

Accepted Answer

A)  calculations are similar to the efficiency-variance calculations 
B)  compares the change in output price with the changes in input prices 
C)  will report a large positive amount when a company has successfully pursued the cost leadership strategy 
D)  isolates the change attributed solely to an increase in production efficiencies 
A)  calculations are similar to the efficiency-variance calculations 
B)  compares the change in output price with the changes in input prices 
C)  will report a large positive amount when a company has successfully pursued the cost leadership strategy 
D)  isolates the change attributed solely to an increase in production efficiencies

Question 13

The time taken to fulfill clients' requests is an example of the ________ measure of a balanced-scorecard.

Accepted Answer

A)  internal business process perspective 
B)  customer perspective 
C)  learning and growth perspective 
D)  financial perspective 
A)  internal business process perspective 
B)  customer perspective 
C)  learning and growth perspective 
D)  financial perspective

Question 14

Grader Company manufactures road graders.Because its managers all have engineering backgrounds,they prefer nonfinancial information for their decision-making models.Therefore,they require the accountants gather data to assist in the examination of nonfinancial results of operations.The following information relates to the manufacture of a paver:
 $\begin{array}{lrr}&2011&2012\
\text { Units produced and sold } & 6,800 & 5,600 \
\text { Direct manufacture labor-hours } & 136,000 & 115,200 \
\text { Direct materials used (tons) } & 29,000 & 24,400 \
\text { Direct manufacture cost per hour } & \$ 21 & \$ 22 \
\text { Direct materials cost per ton } & \$ 431 & \$ 443
\end{array}$ Required:
a.What is the partial productivity for direct materials for each year?
b.What is the partial productivity for direct manufacturing labor for each year?
c.What is the total factor productivity for each year?

Accepted Answer

The answer of Grader Company manufactures road graders.Because its managers...

Question 15

Answer the following questions using the information below:
Crynton Company makes a household appliance with model number L800. The goal for 2015 is to reduce direct materials usage per unit. No defective units are currently produced. Manufacturing conversion costs depend on production capacity defined in terms of L800 units that can be produced. The industry market size for appliances increased 5% from 2014 to 2015. The following additional data are available for 2014 and 2015:
 $\begin{array}{lrr}&2014&2015\
\text { Units of L800 produced and sold } & 30,000 & 31,500 \
\text { Selling price } & \$ 300 & \$ 285 \
\text { Direct materials (square feet) } & 90,000 & 87,000 \
\text { Direct material costs per square foot } & \$ 30 & \$ 33\\text { Manufacturing capacity for L800 (units) } & 37,500 & 36,000 \
\text { Total conversion costs } & \$ 750,000 & \$ 720,000 \
\text { Conversion costs per unit of capacity } & \$ 60 & \$ 60
\end{array}$
-What is the cost effect of the growth component for direct materials?

Accepted Answer

A)  $135,000 U 
B)  $450,000 F 
C)  $450,000 U 
D)  $135,000 F 
A)  $135,000 U 
B)  $450,000 F 
C)  $450,000 U 
D)  $135,000 F

Question 16

Downsizing never involves eliminating jobs as it adversely affects employee morale.

Accepted Answer

A) True 
 B)False

Question 17

Answer the following questions using the information below:
Following a strategy of product differentiation, Arseniq Company makes a high-end Appliance, XT15. Arseniq presents the following data for the years 2014 and 2015:
 $\begin{array}{lrr}&2014&2015\
\text { Units of XT15 produced and sold } & 50,000 & 52,500 \
\text { Selling price } & \$ 500 & \$ 550 \
\text { Direct materials (square feet) } & 150,000 & 153,750 \
\text { Direct materials costs per square foot } & \$ 50 & \$ 55 \
\text { Manufacturing capacity in units of XT15 } & 62,500 & 62,500\
\text { Total conversion costs } & \$ 6,250,000 & \$ 6,875,000 \
\text { Conversion costs per unit of capacity } & \$ 100 & \$ 110 \
\text { Selling and customer-service capacity (customers) } & 150 & 150 \
\text { Total selling and customer-service costs } & \$ 2,250,000 & \$ 2,343,750 \
\text { Selling and customer-service capacity cost per customer } & \$ 15,000 & \$ 15,625
\end{array}$ Arseniq produces no defective units but it wants to reduce direct materials usage per unit of XT15. Manufacturing conversion costs in each year depend on production capacity defined in terms of XT15 units that can be produced. Selling and customer-service costs depend on the number of customers that the customer and service functions are designed to support. Arseniq had 140 customers in 2014 and 145 customers in 2015.
-What is the net effect on operating income as a result of the productivity component?

Accepted Answer

A)  $875,000 U 
B)  $206,250 F 
C)  $875,000 F 
D)  $206,250 U 
A)  $875,000 U 
B)  $206,250 F 
C)  $875,000 F 
D)  $206,250 U

Question 18

Engineered costs ________.

Accepted Answer

A)  have a no repetitive relationship with output 
B)  have no measurable cause-and-effect relationship between output and resources used 
C)  include research and development and human resource costs 
D)  include a high level of certainty 
A)  have a no repetitive relationship with output 
B)  have no measurable cause-and-effect relationship between output and resources used 
C)  include research and development and human resource costs 
D)  include a high level of certainty

Question 19

The balanced scorecard uses financial and nonfinancial performance measures to evaluate short-run and long-run performance in a single report.

Accepted Answer

A) True 
 B)False

Question 20

When analyzing the change in operating income,the strategy component of growth ________.

Accepted Answer

A)  calculations are similar to the selling-price variance calculations 
B)  isolates the change attributed solely to an increase in market share 
C)  isolates the change attributed solely to an increase in industry growth 
D)  isolates the change attributed solely to an increase in the quantity of units sold 
A)  calculations are similar to the selling-price variance calculations 
B)  isolates the change attributed solely to an increase in market share 
C)  isolates the change attributed solely to an increase in industry growth 
D)  isolates the change attributed solely to an increase in the quantity of units sold

The partial productivity of overhead resources can be measured by considering the cost driver as ________.

Engineered costs contain a higher level of uncertainty than discretionary costs.

The lower the inputs for a given set of outputs or the higher the outputs for a given set of inputs,the higher the level of ________.

When analyzing the change in operating income,the strategy component of growth will increase when more units are sold.

Discretionary costs arise from periodic (usually annual)decisions regarding the maximum amount to be incurred.

The cost effect of productivity for variable costs is calculated by multiplying the difference in actual input units used to produce current year output and units of input required to produce current year output in previous year by the ________.

Direct material cost is an example of ________.

________ perspective of the balanced scorecard focuses on a company's own operations that create value for customers that,in turn,help achieve financial objectives.

When adequate capacity exists in the current year to produce next year's output,the cost effect of growth for capacity-related fixed costs will be zero.

When analyzing the change in operating income,the strategy component of price-recovery ________.

The time taken to fulfill clients' requests is an example of the ________ measure of a balanced-scorecard.

Downsizing never involves eliminating jobs as it adversely affects employee morale.

Engineered costs ________.

The balanced scorecard uses financial and nonfinancial performance measures to evaluate short-run and long-run performance in a single report.

When analyzing the change in operating income,the strategy component of growth ________.

The Manager and Management Accounting

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Activity-Based Management

Master Budget and Responsibility Accounting

Flexible Budgets, direct-Cost Variances, and Management Control

Flexible Budgets, overhead Cost Variances, and Management Control

Inventory Costing and Capacity Analysis

Determining How Costs Behave

Decision Making and Relevant Information

Pricing Decisions and Cost Management

Cost Allocation, customer-Profitability Analysis, and Sales-Variance Analysis

Allocation of Support-Department Costs, common Costs, and Revenues

Cost Allocation: Joint Products and Byproducts

Process Costing

Spoilage, rework, and Scrap

Balanced Scorecard: Quality and Time

Inventory Management, just-In-Time, and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, transfer Pricing, and Multinational Considerations

Performance Measurement, compensation, and Multinational Considerations

Filters

Exam 12: Strategy, balanced Scorecard, and Strategic Profitability Analysis

The partial productivity of overhead resources can be measured by considering the cost driver as ________.

Engineered costs contain a higher level of uncertainty than discretionary costs.

The lower the inputs for a given set of outputs or the higher the outputs for a given set of inputs,the higher the level of ________.

When analyzing the change in operating income,the strategy component of growth will increase when more units are sold.

Discretionary costs arise from periodic (usually annual)decisions regarding the maximum amount to be incurred.

The cost effect of productivity for variable costs is calculated by multiplying the difference in actual input units used to produce current year output and units of input required to produce current year output in previous year by the ________.

Direct material cost is an example of ________.

________ perspective of the balanced scorecard focuses on a company's own operations that create value for customers that,in turn,help achieve financial objectives.

When adequate capacity exists in the current year to produce next year's output,the cost effect of growth for capacity-related fixed costs will be zero.

When analyzing the change in operating income,the strategy component of price-recovery ________.

The time taken to fulfill clients' requests is an example of the ________ measure of a balanced-scorecard.

Downsizing never involves eliminating jobs as it adversely affects employee morale.

Engineered costs ________.

The balanced scorecard uses financial and nonfinancial performance measures to evaluate short-run and long-run performance in a single report.

When analyzing the change in operating income,the strategy component of growth ________.

The Manager and Management Accounting

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Activity-Based Management

Master Budget and Responsibility Accounting

Flexible Budgets, direct-Cost Variances, and Management Control

Flexible Budgets, overhead Cost Variances, and Management Control

Inventory Costing and Capacity Analysis

Determining How Costs Behave

Decision Making and Relevant Information

Pricing Decisions and Cost Management

Cost Allocation, customer-Profitability Analysis, and Sales-Variance Analysis

Allocation of Support-Department Costs, common Costs, and Revenues

Cost Allocation: Joint Products and Byproducts

Process Costing

Spoilage, rework, and Scrap

Balanced Scorecard: Quality and Time

Inventory Management, just-In-Time, and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, transfer Pricing, and Multinational Considerations

Performance Measurement, compensation, and Multinational Considerations

Filters