Questions -
1. The theory of constraints:
A. emphasizes long-term optimization.
B. maintains that carefully managing production bottlenecks will increase operating income.
C. helps managers make special one-time decisions.
D. suggests that some component parts should be outsourced.
2. Constraints from the theory of constraints may include:
A. the availability of direct materials in manufacturing.
B. linear square feet of display space for a retailer.
C. direct labor in the service industry.
D. All of the above are correct.
3. The contribution margin ratio always increases when the
A. Variable costs as a percentage of net sales increase
B. Variable costs as a percentage of net sales decrease
C. Break-even point decreases
D. Break-even point increases
4. At the break-even point, the contribution margin equals total
A. Variable costs
B. Sales revenues
C. Selling and administrative costs
D. Fixed costs
5. Customers who 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.
6. 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.
7. 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?
A. $20.83
B. $28.83
C. $500.00
D. $625.00
8. Return on investment (ROI) can be increased by:
A. increasing sales.
B. decreasing operating assets.
C. decreasing operating income.
D. decreasing asset turnover.
9. 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.
10. 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.
11. 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.
12. 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.
13. Traditional costing begins with:
A. the research development and engineering cycle.
B. marketing research.
C. target costing.
D. product specification.
14. 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.
15. 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.
16. 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.
17. 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.
18. 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.
19. Behavioral considerations of a well-designed management accounting and control system include all of the following except:
A. short-term qualitative and quantitative measures.
B. incentive compensation.
C. information accuracy.
D. the organization's ethical code of conduct.
20. The two major categories of technical considerations for a management accounting and control system are:
A. design and accuracy of information.
B. relevance of information and scope of system.
C. service and timely information.
D. development and flexibility.
21. When implementing a new management accounting and control system, it is BEST:
A. to allow management to implement their ideas.
B. for management to involve employees in the implementation.
C. to involve consultants and implement their experienced ideas.
D. to engage in benchmarking.
22. In a management accounting and control system design, behavioral expectations are BEST incorporated by:
A. using a mix of short-term and quantitative performance measures.
B. developing a task-related control system.
C. including the organization's code of conduct.
D. monitoring behavior with time and motion studies.
23. Assumptions of the human resources model of motivation include all of the following EXCEPT:
A. employees prefer to follow highly-detailed, prescribed procedures.
B. individuals are motivated by both financial and nonfinancial awards.
C. employees are knowledgeable about their jobs.
D. individuals are highly creative, ethical, and responsible.
24. The contemporary management view of motivation, the ________ is based on initiatives to improve the quality of working life.
A. balanced scorecard
B. human resources model of motivation
C. scientific management school
D. results control system
25. To promote ethical decision making:
A. consequences of unethical behavior should be left undefined to allow for flexibility.
B. a statement of the organization's code of ethics should be communicated to each employee.
C. violators of the code of ethics should be allowed several warnings before severe consequences are imposed.
D. management should be excused from adhering to the organization's ethical code of conduct when it conflicts with personal values.
26. The elements of an effective ethical control system include all of the following EXCEPT:
A. a statement of the employee's ethical responsibilities.
B. an ongoing internal audit of the efficiency of the organization's ethical control system.
C. a statement of the organization's values and code of ethics.
D. a reward system for turning in those who violate the organization's ethical code.
27. Which of the following is NOT a role of budgeting in organizations?
A. performance evaluation.
B. historical financial statements.
C. allocation of resources.
D. motivation of employees.
28. Budgeting does NOT require:
A. knowledge of the organization's activities.
B. specialized expertise in financial management and control.
C. knowledge about how activities affect costs.
D. the ability to see how the organization's different activities fit together.
29. All of the following are true statements about the role of budgets and budgeting EXCEPT that:
A. a budget is a quantitative summary of the expected allocations and financial consequences of the organization's short-term operating activities.
B. budgeting includes the process of estimating money inflows and outflows to determine a financial plan that will meet an organization's objectives.
C. the difference between actual results and the budget plan are called variances.
D. budgeting solves most business challenges because it coordinates activities and communicates the organization's short-term goals to its members.
30. Operating budgets include the:
A. projected balance sheet.
B. projected income statement.
C. capital spending plan.
D. expected cash flow statement.
31. Financial budgets are prepared:
A. to specify expectations for selling, purchasing, and production.
B. to evaluate the financial results of the proposed decisions.
C. so that financial statements can be prepared for shareholders.
D. to plan for production capacity.
The management accountant for the Martino Organics has prepared the following segmented income statement for the most current year.
|
Produce
|
Fish & Meat
|
Sundries
|
Total
|
|
Sales
|
$80,000
|
$120,000
|
$60,000
|
$220,000
|
|
Variable expenses
|
36,000
|
65,000
|
20,000
|
121,000
|
|
Contribution margin
|
44,000
|
55,000
|
40,000
|
99,000
|
|
Other costs
|
18,000
|
21,000
|
8,000
|
47,000
|
|
Segment margin
|
26,000
|
34,000
|
32,000
|
52,000
|
|
Allocated avoidable costs
|
2,000
|
3,000
|
3,000
|
8,000
|
|
Segment income
|
24,000
|
31,000
|
29,000
|
44,000
|
|
Allocated corporate costs
|
7,000
|
7,000
|
7,000
|
21,000
|
|
Corporate profit
|
$17,000
|
$ 24,000
|
$ 22,000
|
$ 23,000
|
32. If the Produce department had been eliminated prior to this year, the company would have reported:
A. greater corporate profits.
B. the same amount of corporate profits.
C. less corporate profits.
D. resulting profits cannot be determined.
33) To receive the last four points on this exam, please mark "yes."
A)Yes
B) No
C) Maybe
D) I don't know