ACCT 434 Week 7 Quiz

                             ACCT 434 Advanced Cost Management -DeVry

ACCT 434 Week 7 Quiz Set 1
1. Question : (TCO 9) To guide cost allocation decisions, the benefits-received criterion
2. Question : (TCO 9) A challenge to using cost-benefit criteria for allocating costs is that
3. Question : (TCO 9) The MOST likely reason for NOT allocating corporate costs to divisions include that
4. Question : (TCO 9) Identifying homogeneous cost pools
5. Question : (TCO 9) The Hassan Corporation has an electric mixer division and an electric lamp division. Of a $20,000,000 bond issuance, the electric mixer division used $14,000,000 and the electric lamp division used $6,000,000 for expansion. Interest costs on the bond totaled $1,500,000 for the year. What amount of interest costs should be allocated to the electric lamp division?
6. Question : (TCO 10) All of the following are methods that aid management in analyzing the expected results of capital budgeting decisions EXCEPT the
7. Question : (TCO 10) Assume your goal in life is to retire with $1.5 million. How much would you need to save at the end of each year if interest rates average 5% and you have a 25-year work life?
8. Question : (TCO 10) The definition of an annuity is
9. Question : (TCO 10) A "what-if" technique that examines how a result will change if the original predicted data are not achieved or if an underlying assumption changes is called

10. Question : (TCO 10) Shirt Company wants to purchase a new cutting machine for its sewing plant. The investment is expected to generate annual cash inflows of $300,000. The required rate of return is 12% and the current machine is expected to last for four years. What is the maximum dollar amount Shirt Company would be willing to spend for the machine, assuming its life is also four years? Income taxes are not considered.

ACCT 434 Week 7 Quiz Set 2

1. Question : (TCO 11) The four cost categories in a cost of quality program are
2. Question : (TCO 11) ________ is a formal means of distinguishing between random and nonrandom variation in an operating process.
3. Question : (TCO 11) Delays in customer-response time occur because of
4. Question : (TCO 11) Scrap is an example of
5. Question : (TCO 11) Regal Products has a budget of $900,000 in 20X6 for prevention costs. If it decides to automate a portion of its prevention activities, it will save $60,000 in variable costs. The new method will require $18,000 in training costs and $120,000 in annual equipment costs. Management is willing to adjust the budget for an amount up to the cost of the new equipment. The budgeted production level is 150,000 units. Appraisal costs for the year are budgeted at $600,000. The new prevention procedures will save appraisal costs of $30,000. Internal failure costs average $15 per failed unit of finished goods. The internal failure rate is expected to be 3% of all completed items..……………………?
6. Question : (TCO 12) Which of the following categories of costs are important when managing inventories of goods for sale, according to the authors of the text?
7. Question : (TCO 12) Quality costs include
8. Question : (TCO 12) Which of the following is an assumption of the economic-order-quantity decision model?
9. Question : (TCO 12) Increases in the carrying cost and decreases in the ordering cost per purchase order result in

10. Question : (TCO 12) Liberty Celebrations, Inc., manufactures a line of flags. The annual demand for its flag display is estimated to be 100,000 units. The annual cost of carrying one unit in inventory is $1.60, and the cost to initiate a production run is $50. There are no flag displays on hand but Liberty had scheduled 60 equal production runs of the display sets for the coming year, the first of which is to be run immediately. Liberty Celebrations has 250 business days per year. Assume that sales occur uniformly throughout the year and that production is instantaneous. The estimated total setup cost for the flag displays for the coming year is