MBA-560 Module 7 Test 7 M/C



& Managerial Accting MBA-560

7 – Test 7: M/C

1.Select the correct statement regarding relevant costs and revenues. (Points : 2)

2.All of the following statements describe qualities of the relevance of information except: (Points : 2)

3.All of the following are factors that could be considered in a decision to outsource a component that is currently being produced in house. Which of the following is not likely to be relevant? (Points : 2)

4.Dwight Corporation provides two kinds of services. During the most recent accounting period, the two service lines produced the following operating results:

Service A Service B
Service revenue $80,000 $20,000
Unit-level costs ($50,000) ($ 15,000)
Product-level costs ($10,000) ($ 2,000)
Company-wide (facility-level) costs ($ 5,000) ($ 5,000)
Net income (loss) $15,000 ($ 2,000)

If the company stops providing Service B, the company’s income will: (Points : 2)

5.Andy is trying to decide which one of two job offers he will accept. Several items are presented below:

Job Criterion Job Offer A Job Offer B
(1) Base salary $50,000 $50,000
(2) Overtime compensation Comp. time Hourly rate
(3) Moving allowance $ 3,000 $ 3,000
(4) Signing bonus $ 2,000 $ 0
(5) Job search costs already incurred $ 300 $ 500

Select the job criterion that are relevant to Andy’s decision. (Points : 2)

6.Alicia brought her lunch today but now a coworker has asked her to go to the deli across the street. Select the correct statement from the following. (Points : 2)

7.Dalton Company is trying to decide between the following two alternatives:

Alternative A Alternative B
Projected revenue $50,000 $60,000
Direct material 6,000 12,000
Assembly labor 9,000 9,000
Production supervisor’s salary 10,000 10,000
Facility-related costs 10,000 15,000
Profit $15,000 $14,000

Which of the following conclusions can be drawn from this example? (Points : 2)

8.Colson-Howard Company operates a store in downtown Savannah that has five departments including a sporting goods department. If the sporting goods department is closed, the store manager will not be affected, but if the entire store is closed, the manager will be terminated. Which of the following lessons should be learned from this example? (Points : 2)

9.Which of the following costs generally is an example of a batch-level cost? (Points : 2)

10.Brandon Company plans to add a new item to its product line. Two possible products are under consideration. Each unit of Product A costs $12 to produce and sells for $20, while each unit of Product B costs $18 and sells for $28. What is the differential revenue for this decision? (Points : 2)

11.Planning concerned with long-range decisions such as defining the scope of the business is referred to as: (Points : 2)

12.Expressing plans for a business in financial terms is commonly called: (Points : 2)

13.A company’s numerous specific budgets (sales and inventory purchases, for example) together are referred to as the: (Points : 2)

14.With regards to financial statements, “pro forma” means: (Points : 2)

15.Select the correct statement regarding the selling and administrative (S&A) expense budget. (Points : 2)

16.The master budget normally covers: (Points : 2)

17.Select the incorrect statement about budget committees. (Points : 2)

18.Select the incorrectstatement regarding the human factor in the budgeting process. (Points : 2)

19.Wakefield Company wants an ending inventory each month equal to 30% of that month’s cost of goods sold. Cost of goods sold for February is projected at $90,000. Ending inventory at the end of January was $24,000. Based on this information, purchases for February will be: (Points : 2)

20.Select the incorrectstatement about the planning process. (Points : 2)


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