1) At the break-even point, the contribution margin equals total
a. Variable costs
b. Sales revenues
c. Selling and administrative costs
d. Fixed costs
2) Customers are price sensitive with few special demands are:
A) high cost to serve and low margin.
B) low cost to serve and low margin.
C) high cost to serve and high margin.
D) low cost to serve and high margin.
3) Typical sales person’s compensation:
A) is paid in the form of salary.
B) encourages sales only to profitable customers.
C) is usually based on customer profit.
D) is usually based on sales revenue.
1) Staley company has 30 order operators with associated costs of $1,000,000 per year. Staley calculated that each operator worked about 2,000 hours per year. Allowing for time off, each operator provided about 1,600 or productive work per year. What is the rate per hour for each order entry employee?
2) Return on investment (ROI) can be increased by:
A) increasing sales.
B) decreasing operating assets.
C) decreasing operating income.
D) decreasing asset turnover .
3) Total-life-cycle costing is the name given to:
A) a method of cost planning to reduce manufacturing costs to targeted levels.
B) the process of examining each component of a product to determine whether its cost can be reduced.
C) the process of managing all costs along the value chain.
D) a system that focuses on reducing costs during the manufacturing cycle.
1) Deciding how to allocate resources over a product’s life cycle usually is:
A) decided once at the beginning of the product design phase.
B) not known until the beginning of the manufacturing cycle.
C) part of product development.
D) an iterative process over the life of the product.
2) An understanding of total-life-cycle costs can lead to:
A) additional costs during the manufacturing cycle.
B) less need for the evaluation of opportunity costs.
C) cost effective product designs that are easier to service.
D) mutually beneficial relationships between buyers and sellers.
3) The stage of the research development and engineering cycle in which the technical aspects of products and services are developed is the:
A) service phase.
B) market research stage.
C) product development stage.
D) product design stage.
1) Traditional costing begins with:
A) the research development and engineering cycle.
B) marketing research.
C) target costing.
D) product specification.
2) Relevant costs for target costing include:
A) variable manufacturing costs.
B) variable manufacturing and variable nonmanufacturing costs.
C) all fixed costs.
D) all future costs, both variable and fixed.
3) Which BEST describes the control function in a management accounting and control system? A) MACS seeks out areas that are out-of-control but not for corrective action.
B) MACS achieves cost reduction targets that are continually adjusted downward.
C) MACS guides and motivates employees to achieve organizational objectives.
D) MACS ensures performance standard goals are being met.
1) The five stages in the process of keeping an organization in control are:
A) planning, implementing, measuring, evaluating and correcting.
B) planning, executing, monitoring, evaluating and correcting.
C) budgeting, implementing, monitoring, evaluation and feedback.
D) budgeting, executing, measuring, feedback and evaluation.
2) The evaluation phase of the process of control in MACS focuses on:
A) comparing the planned level to current performance to identify discrepancies and consider corrective measures.
B) measuring the current level of performance.
C) returning the system to an in control state.
D) selecting measures to determine how well objectives are met.
3) Which BEST describes the purpose of a management accounting and control system (MACS)?
A) A MACS defines the value chain and identifies nonvalue-added activities for a business.
B) A MACS helps decision makers determine whether strategies and objectives are being met.
C) A MACS offers a system of controls to ensure employees are meeting predetermined standards.
D) A MACS provides a signal for management attention when areas are out-of-control.