Question 1

Which of the following is a FALSE statement about target costing?

Accepted Answer

A)  Target costing is a method of determining the cost of a product or service based on the price that customers are willing to pay. 
B)  The cost is calculated by subtracting the desired profit from the target price. 
C)  Target costing is an interactive process. 
D)  Target costing is cost driven. 
A)  Target costing is a method of determining the cost of a product or service based on the price that customers are willing to pay. 
B)  The cost is calculated by subtracting the desired profit from the target price. 
C)  Target costing is an interactive process. 
D)  Target costing is cost driven.

Question 2

Figure 18-1 The Bayview Corporation manufactures bottled water with an average manufacturing cost of $2 per case (a case contains 24 bottles).Bayview sold 1,000,000 cases last year to the following types of customers:
  The supermarket chains order electronically through EDI which costs $25,000 annually.Bayview is responsible for shipping costs, which totaled $0.50 a case and special labels costing $0.02 per bottle.
The drugstore chains have special handling costs of $0.20 a case and increased administrative assistance costing $45,000 per year.
The gas station chains require special marketing promotions that cost $50,000.Sales commissions of 10% are paid.
Local pharmacies have special handling costs of $0.10 per case and sales commissions are paid to agents costing $0.25 per case.Bad debt expense averages 10% of sales.
-
Refer to Figure 18-1.What customer type has the least total cost per case ?

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 3

Which of the following is true regarding expenses related to specific market structure types?

Accepted Answer

A)  Monopolistic competition and oligopolies are the only structures where costs of differentiation have an impact. 
B)  Both monopolies and monopolistic competition structures normally must expend legal and lobbying costs. 
C)  In perfect competition and monopolistic competition, differentiation costs have an impact. 
D)  In perfect competition and oligopolies, there are no special expenses related to the structure of the organization. 
A)  Monopolistic competition and oligopolies are the only structures where costs of differentiation have an impact. 
B)  Both monopolies and monopolistic competition structures normally must expend legal and lobbying costs. 
C)  In perfect competition and monopolistic competition, differentiation costs have an impact. 
D)  In perfect competition and oligopolies, there are no special expenses related to the structure of the organization.

Question 4

A disadvantage of absorption costing is

Accepted Answer

A)  that it is not a useful format for decision making. 
B)  that it might encourage inventory build up. 
C)  both a and b. 
D)  none of these. 
A)  that it is not a useful format for decision making. 
B)  that it might encourage inventory build up. 
C)  both a and b. 
D)  none of these.

Question 5

The following information pertains to Stark Corporation:   What is the value of ending inventory using the absorption costing method?

Accepted Answer

A)  $310,000 
B)  $250,000 
C)  $200,000 
D)  $390,000 
A)  $310,000 
B)  $250,000 
C)  $200,000 
D)  $390,000

Question 6

After the 2006 tornado in Oklahoma City, OK, businesses were trying to sell lumber for 50 percent above their regular prices.This is 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 7

Taylor Company's budgeted sales were 10,000 units at $200 per unit.Actual sales were 9,200 units at $210 per unit. Taylor's price volume variance is

Accepted Answer

A)  $68,000 (U). 
B)  $160,000 (U). 
C)  $8,000 (U). 
D)  $168,000 (U). 
A)  $68,000 (U). 
B)  $160,000 (U). 
C)  $8,000 (U). 
D)  $168,000 (U).

Question 8

The following information pertains to Stark Corporation:   What is the value of ending inventory using the variable costing method?

Accepted Answer

A)  $310,000 
B)  $250,000 
C)  $200,000 
D)  $390,000 
A)  $310,000 
B)  $250,000 
C)  $200,000 
D)  $390,000

Question 9

Nauman Company has the following information pertaining to its two divisions for 2011:   Common expenses are $24,000 for 2011.
-
What is the segment margin for Division Y?

Accepted Answer

A)  $310,000 
B)  $210,000 
C)  $240,000 
D)  $40,000 
A)  $310,000 
B)  $210,000 
C)  $240,000 
D)  $40,000

Question 10

_______________ is where a higher price is charged at the beginning of a product's life cycle.

Accepted Answer

A)  Penetration pricing 
B)  Predatory pricing 
C)  Price skimming 
D)  Target costing 
A)  Penetration pricing 
B)  Predatory pricing 
C)  Price skimming 
D)  Target costing

Question 11

Redding Company has two divisions with the following segment margins for the current year: Northern, $200,000; Southern, $400,000.Common expenses of the company are $50,000.What is Redding Company's net income?

Accepted Answer

A)  $150,000 
B)  $550,000 
C)  $600,000 
D)  $650,000 
A)  $150,000 
B)  $550,000 
C)  $600,000 
D)  $650,000

Question 12

When production is less than sales volume, net income under absorption costing will be _______________ profits using variable costing procedures.

Accepted Answer

A)  greater than 
B)  less than 
C)  equal to 
D)  randomly different than 
A)  greater than 
B)  less than 
C)  equal to 
D)  randomly different than

Question 13

Which of the following is NOT an example of a market structure?

Accepted Answer

A)  oligopoly 
B)  monopoly 
C)  barrier market 
D)  perfectly competitive 
A)  oligopoly 
B)  monopoly 
C)  barrier market 
D)  perfectly competitive

Question 14

The following information pertains to three different products being sold by Leone Company:
   Required:

Accepted Answer

The answer of The following information pertains to three different...

Question 15

Common segment costs, when contrasted with direct segment costs, are

Accepted Answer

A)  costs of all segments such as direct labor. 
B)  costs related to more than one segment and not directly traceable to a particular segment. 
C)  incurred at one level for the benefit of two or more segments. 
D)  both b and c. 
A)  costs of all segments such as direct labor. 
B)  costs related to more than one segment and not directly traceable to a particular segment. 
C)  incurred at one level for the benefit of two or more segments. 
D)  both b and c.

Question 16

Which of the following markets is characterized by the following: many buyers and sellers, a homogeneous product, easy entry into and exit from the industry, and all firms are price takers?

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

Assume the following information for a product line:   
-What is the segment margin of the product line?

Accepted Answer

A)  $400,000 
B)  $325,000 
C)  $350,000 
D)  $215,000 
A)  $400,000 
B)  $325,000 
C)  $350,000 
D)  $215,000

Question 18

Eastwood Company has the following information for 2011:   There were no beginning inventories.
-
What is the net income for Eastwood using the variable costing method?

Accepted Answer

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

Question 19

The following information pertains to Stark Corporation:   Absorption costing net income would be _______________ the variable costing net income.

Accepted Answer

A)  $50,000 greater than 
B)  $70,000 greater than 
C)  $70,000 less than 
D)  $50,000 less than 
A)  $50,000 greater than 
B)  $70,000 greater than 
C)  $70,000 less than 
D)  $50,000 less than

Question 20

_______________ on the international market is called dumping.

Accepted Answer

A)  Price discrimination 
B)  Predatory pricing 
C)  Price skimming 
D)  Penetration pricing 
A)  Price discrimination 
B)  Predatory pricing 
C)  Price skimming 
D)  Penetration pricing

Which of the following is a FALSE statement about target costing?

Which of the following is true regarding expenses related to specific market structure types?

A disadvantage of absorption costing is

The following information pertains to Stark Corporation: What is the value of ending inventory using the absorption costing method?

After the 2006 tornado in Oklahoma City, OK, businesses were trying to sell lumber for 50 percent above their regular prices.This is an example of

Taylor Company's budgeted sales were 10,000 units at $200 per unit.Actual sales were 9,200 units at $210 per unit. Taylor's price volume variance is

The following information pertains to Stark Corporation: What is the value of ending inventory using the variable costing method?

Nauman Company has the following information pertaining to its two divisions for 2011: Common expenses are $24,000 for 2011. - What is the segment margin for Division Y?

_______________ is where a higher price is charged at the beginning of a product's life cycle.

Redding Company has two divisions with the following segment margins for the current year: Northern, $200,000; Southern, $400,000.Common expenses of the company are $50,000.What is Redding Company's net income?

When production is less than sales volume, net income under absorption costing will be _______________ profits using variable costing procedures.

Which of the following is NOT an example of a market structure?

The following information pertains to three different products being sold by Leone Company: Required:

Common segment costs, when contrasted with direct segment costs, are

Which of the following markets is characterized by the following: many buyers and sellers, a homogeneous product, easy entry into and exit from the industry, and all firms are price takers?

Assume the following information for a product line: -What is the segment margin of the product line?

Eastwood Company has the following information for 2011: There were no beginning inventories. - What is the net income for Eastwood using the variable costing method?

The following information pertains to Stark Corporation: Absorption costing net income would be _______________ the variable costing net income.

_______________ on the international market is called dumping.

Introduction to Cost Management

Basic Cost Management Concepts

Cost Behavior

Activity-Based Costing

Product and Service Costing: Job-Order System

Process Costing

Allocating Costs of Support Departments and Joint Products

Budgeting for Planning and Control

Standard Costing: a Functional-Based Control Approach

Decentralization: Responsibility Accounting, Performance Evaluation, and Transfer Pricing

Strategic Cost Management

Activity-Based Management

The Balanced Scorecard: Strategic-Based Control

Quality and Environmental Cost Management

Lean Accounting and Productivity Measurement

Cost-Volume-Profit Analysis

Activity Resource Usage Model and Tactical Decision Making

Capital Investment

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

Filters

Exam 18: Pricing and Profitability Analysis

Which of the following is a FALSE statement about target costing?

Which of the following is true regarding expenses related to specific market structure types?

A disadvantage of absorption costing is

The following information pertains to Stark Corporation: What is the value of ending inventory using the absorption costing method?

After the 2006 tornado in Oklahoma City, OK, businesses were trying to sell lumber for 50 percent above their regular prices.This is an example of

Taylor Company's budgeted sales were 10,000 units at $200 per unit.Actual sales were 9,200 units at $210 per unit. Taylor's price volume variance is

The following information pertains to Stark Corporation: What is the value of ending inventory using the variable costing method?

Nauman Company has the following information pertaining to its two divisions for 2011: Common expenses are $24,000 for 2011. - What is the segment margin for Division Y?

_______________ is where a higher price is charged at the beginning of a product's life cycle.

Redding Company has two divisions with the following segment margins for the current year: Northern, $200,000; Southern, $400,000.Common expenses of the company are $50,000.What is Redding Company's net income?

When production is less than sales volume, net income under absorption costing will be _______________ profits using variable costing procedures.

Which of the following is NOT an example of a market structure?

The following information pertains to three different products being sold by Leone Company: Required:

Common segment costs, when contrasted with direct segment costs, are

Which of the following markets is characterized by the following: many buyers and sellers, a homogeneous product, easy entry into and exit from the industry, and all firms are price takers?

Assume the following information for a product line: -What is the segment margin of the product line?

Eastwood Company has the following information for 2011: There were no beginning inventories. - What is the net income for Eastwood using the variable costing method?

The following information pertains to Stark Corporation: Absorption costing net income would be _______________ the variable costing net income.

_______________ on the international market is called dumping.

Introduction to Cost Management

Basic Cost Management Concepts

Cost Behavior

Activity-Based Costing

Product and Service Costing: Job-Order System

Process Costing

Allocating Costs of Support Departments and Joint Products

Budgeting for Planning and Control

Standard Costing: a Functional-Based Control Approach

Decentralization: Responsibility Accounting, Performance Evaluation, and Transfer Pricing

Strategic Cost Management

Activity-Based Management

The Balanced Scorecard: Strategic-Based Control

Quality and Environmental Cost Management

Lean Accounting and Productivity Measurement

Cost-Volume-Profit Analysis

Activity Resource Usage Model and Tactical Decision Making

Capital Investment

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

Filters