ACC220 Managerial Accounting
Module 1 Discussion
DQ1 Service Costs
Please read Ch. and review the videos and website material. Financial accounting involves preparing financial statements from company information. Managerial accounting involves decision making within a business.
Though service companies do not produce a tangible product, they usually still have labor, materials, and overhead costs. These costs are not associated with manufacturing product, but with serving customers. Give an example of a service business and determine what would be labor costs, material costs ( if any) and overhead costs. Why did you categorized the costs in each category?
DQ2 Environmental Managerial Accounting
For this questions. please conduct some research beyond the textbook.
Throughout the last decade, environmental issues have become an increasingly important part of the business environment for most companies. Companies and managers must now consider the environmental impact of their business decisions in the same way that they would consider other operational issues
. Comment on one environmental issue you have researched and indicate how the decision was made by management.
ACC220 Managerial Accounting
Module 2 Discussion
DQ1 Contribution margin
An examination of the accounting records of Clowney Company disclosed a high contribution margin ratio and production at a level below maximum capacity.
Based on this information, suggest a likely means of improving operating income. Explain. and include references.
DQ2 Role playing
The break-even point is as relevant in a service company as it is in a manufacturing company. In the role of the managerial accountant, what step would you take in a break even analysis for a service industry?
Pick a service industry and identify the correct unit of analysis and activity for that unit. Show calculations for a break-even scenario for your chosen industry. Please include references for maximum number of points.
ACC220 Managerial Accounting
Module 3 Discussion
DQ1 Predetermined factory overhead
Factory overhead includes all manufacturing costs except direct materials and direct labor. Factory overhead costs come from a variety of sources, including indirect materials and indirect labor.
Discuss how the predetermined factory overhead rate can be used in job order cost accounting to assist management in pricing jobs. Why use a predetermined factory overhead rate ? Please support your response with references for the maximum number of points.
DQ2 3D Printing
The use of technology has exploded in recent memory. We see a lot of companies using 3D printing and other technology. 3D printing is a technology that creates a three-dimensional product from an “additive” process. “Additive” means the product is built from plastic, metal, or other material that is built layer by successive layer until the final object is complete
Explain how 3D printing could benefit a job shop environment. How would the technology be used? Please give an example. How would you classify the cost ( direct labor, direct material or factory overhead?)
ACC220 Managerial Accounting
Module 4 Discussion
DQ1 Real world manufacturing
The following categories represent typical process manufacturing industries:
Beverages
Chemicals
Food
Pharmaceuticals
Soap and cosmetics
Identify one company and determine the following:
a. Typical products manufactured by the selected company, including brand names
b. Typical raw materials used by the selected company
c. Types of processes used by the selected company Use annual reports, the Internet, or library resources in doing this activity. and include the reference data.
DQ2 Accounting for material costs
In papermaking operations for companies such as International Paper Company, wet pulp is fed into paper machines, which press and dry pulp into a continuous sheet of paper. The paper is formed at very high speeds (60 mph). Once the paper is formed, the paper is rolled onto a reel at the back end of the paper machine. One of the characteristics of papermaking is the creation of “broke” paper. Broke is paper that fails to satisfy quality standards and is therefore rejected for final shipment to customers. Broke is recycled back to the beginning of the process by combining the recycled paper with virgin (new) pulp material. The combination of virgin pulp and recycled broke is sent to the paper machine for papermaking. Broke is fed into this recycle process continuously from all over the facility. In this industry, it is typical to charge the papermaking operation with the cost of direct materials, which is a mixture of virgin materials and broke. Broke has a much lower cost than does virgin pulp. Therefore, the more broke in the mixture, the lower the average cost of direct materials to the department. Papermaking managers frequently comment on the importance of broke for keeping their direct materials costs down.
a. How do you react to this accounting procedure? b. What “hidden costs” are not considered when accounting for broke as described? Please include references to support your response.
ACC220 Managerial Accounting
Module 5 Discussion
DQ1 Domino's Pizza budget
Domino’s Pizza LLC (DPZ) operates pizza delivery and carry-out restaurants. The annual report describes its business as follows: We offer a focused menu of high-quality, value-priced pizza with three types of crust (Hand-Tossed, Thin Crust, and Deep Dish), along with buffalo wings, bread sticks, cheesy bread, CinnaStix®, and Coca-Cola® products. Our hand-tossed pizza is made from fresh dough produced in our regional distribution centers. We prepare every pizza using real cheese, pizza sauce made from fresh tomatoes, and a choice of high-quality meat and vegetable toppings in generous portions. Our focused menu and use of premium ingredients enable us to consistently and efficiently produce the highest-quality pizza.
Over the 41 years since our founding, we have developed a simple, cost-efficient model. We offer a limited menu, our stores are designed for delivery and carry-out, and we do not generally offer dine-in service. As a result, our stores require relatively small, lower-rent locations and limited capital expenditures.
How would a master budget support planning, directing, and controlling for Domino’s? Please support your response with references.
DQ2 Variance
You started your own construction business and need to determine the cost of materials used to build one house, and how many materials you will need to do so.
Where would you begin to determine the standard price and quantity needs to build one house?
What would produce a difference between the standard cost to build a house and the actual cost? What would cause a favorable outcome? What would cause an unfavorable outcome?
What action might your company take if you had an unfavorable total direct materials cost variance?
Please support your responses with references.
ACC220 Managerial Accounting
Module 6 Discussion
DQ1 Support Department
The Customer Service Department of Door Industries Inc. asked the Publications Department to prepare a brochure for its training program. The Publications Department delivered the brochures and charged the Customer Service Department a rate that was 25% higher than could be obtained from an outside printing company. The policy of the company required the Customer Service Department to use the internal publications group for brochures. The Publications Department claimed that it had a drop in demand for its services during the fiscal year, so it had to charge higher prices in order to recover its payroll and fixed costs.
Recommend how the cost of the brochure should be transferred to the Customer Service Department. Please support your response with references.
DQ2 Organization
You have just been elected president of a brand-new service club on campus. The club is part of a national organization, but the organization charter gives the local organization a fair amount of flexibility in setting up the management of the club. As president, you can choose to make most of the decisions for the club and pass along your direction to the officers and members below you, or you can create specific committees, such as membership or academic, and allow each of the committees to make its own decisions and rules within the overall guidelines set out by the national charter.
Consider the need to manage and evaluate the club and describe which form of organization would you set up for your club and why. Please support your response with references.
ACC220 Managerial Accounting
Module 7 Discussion
DQ1 Foreign Currency Decisions
Global Electronics Inc. invested $1,000,000 to build a plant in a foreign country. The labor and materials used in production are purchased locally. The plant expansion was estimated to pro-duce an internal rate of return of 20% in U.S. dollar terms. Due to a currency crisis, the currency exchange rate between the local currency and the U.S. dollar doubled from two local units per U.S. dollar to four local units per U.S. dollar.
Write a brief memo to the chief financial officer, Tom Greene, explaining the impact that the currency exchange rate change would have on the project’s internal rate of return if (1) the plant produced and sold product in the local economy only, and (2) the plant produced all product locally and exported all product to the United States for sale. Please include references and calculations to support your response.
DQ2 Competitive Pricing Strategy
Aaron McKinney is a cost accountant for Majik Systems Inc. Martin Dodd, Vice President of Marketing, has asked Aaron to meet with representatives of Majik Systems’ major competitor to discuss product cost data. Martin indicates that the sharing of these data will enable Majik Sys-tems to determine a fair and equitable price for its products.
Would it be ethical for Aaron to attend the meeting and share the relevant cost data? Explain your answer.
ACC220 Managerial Accounting
Module 1 Assignment
End-of-chapter exercises
Please complete and submit the following end-of-chapter exercises " on page 775-776 Brief eercisesBE15-3. BE15-4, BE 15-5, BE 15-6 and Exercises 15-11 and 15-13 on page 779. The exercises will enhance your understanding of the material in chapter 15.
ACC220 Managerial Accounting
Module 2 Assignment
End -of-chapter exercises
Please read Ch. 20 and review all videos and other material before you start the assignment. Please complete and submit the following: on page 1029-1030 Brief exercises 20-1, 20-3, 20-5 and 20-6. Also on pages 1032-1033 Exercises 20-7, 20-9 and 20-11
ACC220 Managerial Accounting
Module 3 Assignment
End -of-chapter exercises
Ch .16 End-of-chapter exercises
Please read Ch.16, review information on PowerPoint slides for Ch. 16 and the videos and websites before you complete and submit the following:
On page 819 Brief exercises 16-4 and 16-5. Also, on pages 820-825 Exercises 16-2, 16-7, 16-8, 16-9, and 16-16
ACC220 Managerial Accounting
Module 4 Assignment
Please read Ch. 17, review the PowerPoint slides, video and additional material before you complete and submit the following: page 874 Brief exercises 17-3 and 17-4. Also Exercises 17-4, 17-5, 17-6 and 17-10 on pages 875-876
ACC220 Managerial Accounting
Module 5 Assignment
Ch. 22 & Ch23 End-of -chapter exercises
Please read Ch. 22 & Ch.23., review PowerPoint slides for both chapters, view videos and access websites before you start the assignment. Please show calculation for each exercise for the maximum points.
Please complete and submit on pages 1129-1130 Exercises 22-2, 22-6, and 22-7 In Ch. 23 pages 1188-1191, please complete and submit Exercises 23-2. 23-4, 23-8, and 23-15
ACC220 Managerial Accounting
Module 6 Assignment
End-of-chapter exercises
Please read Ch. 24, review the PowerPoint slides, view the videos and websites before you answer the exercises. Please show all computation to receive the maximum points.
Please complete and upload the following: page 1236 Brief exercises 24-1, 24-2, 24-4, 24-5, and 24-6. Also om page 1238 Exercise 24-5.
ACC220 Managerial Accounting
Module 7 Assignment
End-of-chapter exercises
Please read Ch.25 & Ch.26, view three PowerPoint slides for both chapters and review the videos and additional resources posted for this module before you attempt the assignment. Please show complete calculations for the maximum points.
In Ch. 25 please complete Brief Exercises 25-3, 25-5, 25-6, 25-7, and 25-8 on page 1288 and in Ch. 26 , please complete Brief Exercises26-3, 26-4 on page 1338 and Exercises 26-2, 26-5, and 26-7 on page 1339
ACC220 Managerial Accounting
Module 1 Assignment
PowerPoint Presentation Ch. 15
Please review the Ch 15 PowerPoint Presentation FinMan15e_Student PPT_Ch15-1.pptx Download FinMan15e_Student PPT_Ch15-1.pptx
http://somup.com/crjjDMYmfP ( (Links to an external site.)this is the audio version of the PowerPoint presentation) and answer the following questions:
1. Explain the difference between financial and managerial accounting.
2. What are the 5 steps in management process?
ACC220 Managerial Accounting
Module 2 Assignment
Ch. 20 PowerPoint Presentation
Please review the information of the Ch. 20 PowerPoint slides and answer the following questions:
1. What is the relationship between cost- volume and profit?
2. How do you calculate break even?
ACC220 Managerial Accounting
Module 3 Assignment
Ch.16 PowerPoint Presentation
The material presented in the Ch.16 PowerPoint slides will enhance your understanding of the topics presented in the chapter. Please take the time to review the slides before you answer the questions.
Please answer the following questions:
1. What are the two cost accounting systems and what is the difference between the two systems?
2. How can factory overhead be allocated?
ACC220 Managerial Accounting
Module 4 Assignment
Ch. 17 PowerPoint Presentation
Please review the PowerPoint slides for Ch. 17 and submit the answers to the following questions:
1. What information is presented on the Cost of Production report?
2. How do you compute equivalent units of production?
ACC220 Managerial Accounting
Module 5 Assignment
Ch. 22 PowerPoint Presentation and Ch. 23 PowerPoint Presentation
Please review the information presented on the Ch. 22 PowerPoint slides
Answer the following question:
- What is the nature and objective of budgets?
ACC220 Managerial Accounting
Module 6 Assignment
Ch. 24 PowerPoint Questions
Please review the information on the PowerPoint slides for Ch. 24
Answer the questions from material on the PowerPoint slides in a business-like manner.
Please answer the following questions:
1. What are the advantages of decentralization?
2. How do you calculate return on investment (ROI)?
ACC220 Managerial Accounting
Module 7 Assignment
Ch. 25 & Ch. 26PowerPoint questions
Please review the information on the PowerPoint presentation for Ch. 25 and Ch. 26. Using the information from the slides, please answer the following questions:
From Ch. 11
1. What relevant information would you need to make a decision to accept business at a special price?
From Ch. 12
2. What is the definition for internal rate of return(IRR) ?
ACC220 Managerial Accounting
Module 1 Quiz
Question 1 What is the primary criterion for the preparation of managerial accounting reports?
a. relevance of the reports
b. manager needs
c. timing of the reports
d. cost of the reports
Question 2 Which of the following is most associated with financial accounting?
a. can have both objective and subjective information
b. can be prepared periodically, or as needed
c. prepared in accordance with GAAP
d. can be prepared for the entity or segment
Question 3 In most business organizations, the chief management accountant is called the
a. chief accounting officer
b. controller
c. chairman of the board
d. chief executive officer
Question 4 Which of the following are basic phases of the management process?
a. supervising and directing
b. decision making and supervising
c. organizing and directing
d. planning and controlling
Question 5 What term is used to describe the process of monitoring operating results and comparing actual results with the expected results?
a. improving
b. controlling
c. directing
d. planning
Question 6 Accounting designed to meet the needs of decision makers inside the business is
a. general accounting
b. financial accounting
c. managerial accounting
d. external accounting
Question 7 What term is used to describe the process of developing the organization’s objectives and translating those into courses of action?
a. supervising
b. planning
c. improving
d. decision making
Question 8Compute conversion costs given the following data: direct materials, $347,500; direct labor, $196,300; factory overhead, $187,900; and selling expenses, $45,290.
a. $543,800
b. $187,900
c. $731,700
d. $384,200
Question 9 Which of the following is an example of direct materials cost for an automobile manufacturer?
a. cost of oil lubricants for factory machinery
b. cost of wages of assembly worker
c. salary of production supervisor
d. cost of interior upholstery
Question 10 Costs other than direct materials cost and direct labor cost incurred in the manufacturing process are classified as
a. factory overhead cost
b. miscellaneous expense
c. product costs
d. period cost
ACC220 Managerial Accounting
Module 2 Quiz
Question 1. Cost behavior refers to the manner in which
a. a cost changes as the related activity changes
b. a cost is allocated to products
c. a cost is used in setting selling prices
d. a cost is estimated
Question 2Costs that remain constant in total dollar amount as the level of activity changes are called
a. fixed costs
b. mixed costs
c. product costs
d. variable costs
uestion 3. Which of the following costs is an example of a cost that remains the same in total as the number of units produced changes?
a. direct labor
b. salary of a factory supervisor
c. units-of-production depreciation on factory equipment
d. direct materials
Question 4Which of the following activity bases would be the most appropriate for gasoline costs of a delivery service?
a. number of truck drivers
b. total of miles driven
c. how many trucks are in service
d. number of packages picked up
Question 5Which of the following describes the behavior of a variable cost per unit?
a. varies in increasing proportion with changes in the activity level
b. varies in decreasing proportion with changes in the activity level
c. remains constant with changes in the activity level
d. varies in direct proportion with the activity level
Question 6Which of the following costs is a mixed cost?
a. salary of a factory supervisor
b. electricity costs of $3 per kilowatt-hour
c. rental costs of $10,000 per month plus $0.30 per machine hour of use
d. straight-line depreciation on factory equipment
Question 7Strait Co. manufactures office furniture. During the most productive month of the year, 3,000 desks were manufactured at a total cost of $59,000. In the month of lowest production the company made 1,125 desks at a cost of $38,000. Using the high-low method of cost estimation, total fixed costs are
a. $21,000
b. $25,400
c. $42,000
d.$13,000
Question 8. Which of the following statements is true regarding fixed and variable costs?
a. Both costs are constant when considered on a per-unit basis.
b. Both costs are constant when considered on a total basis.
c. Fixed costs are constant in total, and variable costs are constant per unit.
d. Variable costs are constant in total, and fixed costs vary in total.
Question 9The systematic examination of the relationships among selling prices, volume of sales and production, costs, and profits is termed
a. contribution margin analysis
b. cost-volume-profit analysis
c. budgetary analysis
d. gross profit analysis
Question 10If sales are $820,000, variable costs are 55% of sales, and operating income is $260,000, what is the contribution margin ratio?
a. 45%
b. 55%
c. 62%
d. 32%
ACC220 Managerial Accounting
Module 3 Quiz
Question 1Which of the following are the two main types of cost accounting systems for manufacturing operations?
a. process cost and general accounting systems
b. job order cost and process cost systems
c. job order and general accounting systems
d. process cost and replacement cost systems
Question 2Which of the following would most likely use a job order costing system?
a. a paper mill
b. a swimming pool installer
c. a company that manufactures chlorine for swimming pools
d. an oil refinery
Question 3Job order costing and process costing are
a. pricing systems
b. cost accounting systems
c. cost flow systems
d. inventory tracking systems
Question 4Which of the following would record the labor costs to an individual job?
a. clock cards
b. in-and-out cards
c. time tickets
d. a payroll register
Question 5The Thomlin Company forecasts that total overhead for the current year will be $15,500,000 with 250,000 total machine hours. Year to date, the actual overhead is $16,000,000 and the actual machine hours are 330,000 hours. The predetermined overhead rate based on machine hours is
a. $48 per machine hour
b. $62 per machine hour
c. $45 per machine hour
d. $50 per machine hour
Question 6. At the end of the year, overhead applied was $42,000,000. Actual overhead was $40,300,000. Closing over/underapplied overhead into Cost of Goods Sold would cause net income to
a. increase by $1,700,000
b. decrease by $1,700,000
c. increase by $3,400,000
d. decrease by $3,400,000
Question 7The source document for the data for debiting Work in Process for direct materials is a
a. purchase order
b. purchase requisition
c. materials requisition
d. receiving report
Question 8A summary of the materials requisitions completed during a period serves as the basis for transferring the cost of the materials from the controlling account in the general ledger to the controlling accounts for
a. Work in Process and Cost of Goods Sold
b. Work in Process and Factory Overhead
c. Finished Goods and Cost of Goods Sold
d. Work in Process and Finished Goods
Question 9Each document in the cost ledger is called a
a. finished goods sheet
b. stock record
c. materials requisition
d. job cost sheet
Question 10The recording of the factory labor incurred for general factory use would include a debit to
a. Factory Overhead
b. Wages Payable
c. Wages Payable
d. Cost of Goods Sold
ACC220 Managerial Accounting
Module 4 Quiz
Question 1The cost system best suited to industries that manufacture a large number of identical units of commodities on a continuous basis is
a. process
b. departmental
c. first-in, first-out
d. job order
Question 2In a process cost system, the amount of work in process inventory is valued by
a. finding the sum of all open job costs
b. allocating departmental costs between completed and partially completed units
c. multiplying units in ending inventory by the direct materials cost per unit
d. finding the sum of all completed jobs
Question 3The two categories of cost comprising conversion costs are
a. direct labor and indirect labor
b. direct labor and factory overhead
c. factory overhead and direct materials
d. direct labor and direct materials
Question 4The three categories of manufacturing costs comprising the total cost of work in process are direct labor, direct materials, and
a. selling expenses
b. direct expenses
c. accounting salaries expense
d. factory overhead
Question 5Which of the following would use a process costing system?
a. custom home builder
b. custom helicopter manufacturer
c. graduation photographer
d. lumber mill
Question 6In the manufacture of 10,000 units of a product, direct materials cost incurred was $165,000, direct labor cost incurred was $105,000, and applied factory overhead was $53,000. What is the total conversion cost?
a. $218,000
b. $158,000
c. $323,000
d. $53,000
Question 7Department M had 600 units 60% completed in process at the beginning of June, 6,000 units completed during June, and 700 units 30% completed at the end of June. Using the first-in, first-out method of inventory costing, what was the number of equivalent units of production for conversion costs for the period?
a. 7,300 units
b. 5,640 units
c. 6,700 units
d. 5,850 units
Question 8The debits to Work in Process—Assembly Department for May, together with data concerning production, are as follows:
May 1, work in process:
Materials cost, 3,000 units $ 8,000
Conversion costs, 3,000 units, 66.7% completed 6,000
Materials added during May, 10,000 units 30,000
Conversion costs during May 31,000
Goods finished during May, 11,500 units 0
May 31 work in process, 1,500 units, 50% completed 0
?All direct materials are placed in process at the beginning of the process and the first-in, first-out method is used to cost inventories. The materials cost per equivalent unit for May is
a. $3.00
b. $3.80
c. $2.92
d. $2.31
Question 9Which of the following costs incurred by a tool manufacturer would not be included in conversion costs?
a. factory supervisor's salary
b. machine operator's wages
c. raw steel
d. factory maintenance personnel supplies
Question 10The four steps necessary to complete a cost of production report in a process cost system are
1.allocate costs to transferred and partially completed units
2.determine the units to be assigned costs
3.determine the cost per equivalent unit
4.calculate equivalent units of production
ACC220 Managerial Accounting
Module 5 Quiz
Question 1Standards that represent levels of operation that can be attained with reasonable effort are called
a. theoretical standards
b. ideal standards
c. variable standards
d. normal standards
Question 2The principle of exceptions allows managers to focus on correcting variances between
a. standard costs and actual costs
b. variable costs and actual costs
c. competitor’s costs and actual costs
d. competitor’s costs and standard costs
Question 3A favorable cost variance occurs when
a. actual costs are more than standard costs
b. standard costs are more than actual costs
c. standard costs are less than actual costs
d. actual costs are the same as standard costs
Question 4Jaxson Corporation has the following data related to direct labor costs for September: actual costs are 10,200 hours at $15.75 per hour and standard costs are 10,800 hours at $15.50 per hour.
What is the direct labor time variance?
a. ?$9,300 favorable
b. ??$9,300 unfavorable
c. ?$9,450 favorable
d. ??$9,450 unfavorable
Question 5 If the actual quantity of direct materials used in producing a commodity differs from the standard quantity, the variance is a
a. controllable variance
b. price variance
c. quantity variance
d. rate variance
Question 6The budgeting process does not involve which of the following activities?
a. Specific goals are established.
b. Periodic comparison of actual results to goals.
c. Execution of plans to achieve goals.
d. Increase in sales by increasing marketing efforts.
Question 7A variant of fiscal-year budgeting whereby a twelve-month projection into the future is maintained at all times is termed
a. flexible budgeting
b. continuous budgeting
c. zero-based budgeting
d. master budgeting
Question 8The primary difference between a static budget and a flexible budget is that a static budget
a. is suitable in volatile demand situation while flexible budget is suitable in a stable demand situation
b. is concerned only with future acquisitions of fixed assets, whereas a flexible budget is concerned with expenses that vary with sales
c. includes only fixed costs, whereas a flexible budget includes only variable costs
d. is a plan for a single level of production, whereas a flexible budget can be converted to any level of production
Question 9The production budgets are used to prepare which of the following budgets?
a. operating expenses
b. direct materials purchases, direct labor cost, and factory overhead cost
c. sales in dollars
d. sales in units
Question 10Motorcycle Manufacturers, Inc. projected sales of 78,000 machines for the year. The estimated January 1 inventory is 6,500 units, and the desired December 31 inventory is 6,000 units. What is the budgeted production (in units) for the year?
a. 78,500
b. 70,000
c. 77,500
d. 70,500
ACC220 Managerial Accounting
Module 6 Quiz
Question 1Which is the best example of a decentralized operation?
a. one owner who prepares plans and makes decisions for the entire company
b. each unit is responsible for their own operations and decision making
c. in a major company, operating decisions are made by top management
d. none of these, all are examples of a centralized operation
Question 2Which of the following is not one of the common types of responsibility centers?
a. cost center
b. profit center
c. investment center
d. revenue center
Question 3A manager is responsible for costs only in a(n)
a. profit center
b. investment center
c. volume center
d. cost center
Question 4For higher levels of management, responsibility accounting reports
a. are more detailed than for lower levels of management
b. are more summarized than for lower levels of management
c. contain about the same level of detail as reports for lower levels of management
d. are rarely provided or reviewed
Question 5Which of the following is a measure of a cost center manager’s performance?
a. budget performance report
b. rate of return and residual income measures
c. divisional income statements
d. balance sheet
Question 6In a profit center, the manager has responsibility and authority for making decisions that affect
a. long-term liabilities
b. assets
c. investments
d. costs
Question 7The costs of services charged to a profit center on the basis of its use of those services are
a. operating expenses
b. noncontrollable charges
c. service department charges
d. activity charges
Question 8To calculate income from operations, total service department charges are
a. added to income from operations before service department charges
b. subtracted from operating expenses
c. subtracted from income from operations before service department charges
d. subtracted from gross profit margin
Question 9The term used to describe expenses that are incurred by a specific department is
a. indirect expenses
b. margin expenses
c. departmental expenses
d. direct expenses
Question 10Blaser Corporation had $275,000 in invested assets, sales of $330,000, income from operations amounting to $33,000 and a desired minimum rate of return of 7.5%. The rate of return on investment for Blaser Corporation is
a. 8.3%
b. 10%
c. 12%
d. 7.5%
ACC220 Managerial Accounting
Module 7 Quiz
Question 1The amount of increase or decrease in revenue that is expected from a particular course of action as compared with an alternative is
a. manufacturing margin
b. contribution margin
c. differential cost
d. differential revenue
Question 2 A cost that will not be affected by later decisions is termed a(n)
sunk cost
period cost
differential cost
replacement cost
Question 3The amount of income that would result from an alternative use of cash is called:
opportunity cost
differential income
sunk cost
differential revenue
Question 4Yasmin Co. can further process Product B to produce Product C. Product B is currently selling for $30 per pound and costs $28 per pound to produce. Product C would sell for $55 per pound and would require an additional cost of $31 per pound to produce. What is the differential cost of producing Product C?
$31 per pound
$30 per pound
$28 per pound
$55 per pound
Question 5A practical approach that is frequently used by managers when setting normal long-run prices is the
cost-plus approach
economic theory approach
price graph approach
price skimming
Question 6Decisions to install new equipment, replace old equipment, and purchase or construct a new building are examples of
capital investment analysis
sales mix analysis
variable cost analysis
variable cost analysis
Question 7Which of the following are two methods of analyzing capital investment proposals that both ignore present value?
average rate of return and cash payback method
internal rate of return and average rate of return
net present value and average rate of return
internal rate of return and net present value
Question 8The primary advantages of the average rate of return method are its ease of computation and the fact that
it is especially useful to managers whose primary concern is liquidity
it emphasizes the amount of income earned over the life of the proposal
it is especially useful to managers whose primary concern is liquidity
there is less possibility of loss from changes in economic conditions and obsolescence when the commitment is short-term
rankings of proposals are necessary
Question 9The expected average rate of return for a proposed investment of $6,000,000 in a fixed asset, using straight-line depreciation, with a useful life of 20 years, no residual value, and an expected total net income of $12,000,000 over the 20 years is
20%
10%
40%
5%
Question 10Which method of evaluating capital investment proposals uses present value concepts to compute the rate of return from the net cash flows?
internal rate of return method
cash payback method
net present value method
average rate of return method
