Quiz
Question 1. Dougherty Company employs 20 individuals. Eight employees are paid $12 per hour and the rest are salaried employees paid $3,000 a month. How would total costs of personnel be classified?
Fixed cost within relevant range
Variable
Mixed
Variable cost within relevant range
Question 2. For January, the cost components of a picture frame include $0.35 for the glass, $0.65 for the wooden frame, and $0.80 for assembly. The assembly desk and tools cost $400. A total of 1,000 frames is expected to be produced in the coming year. What cost function best represents these costs?
y = 1.80 + 400X
y = 400 + 1.80X
y = 2.20 + 1,000X
y = 1.00 + 400X
Question 3. Which cost estimation method may use time-and-motion studies to analyze the relationship between inputs and outputs in physical terms?
Quantitative analysis
Account analysis
Conference
Industrial engineering
Question 4. Penny's TV and Appliance Store is a small company that has hired you to perform some management advisory services. The following information pertains to 20X2 operations. Sales (2,000 televisions) $900,000; Cost of goods sold $400,000; Store manager's salary per year $70,000; Operating costs per year $157,000; Advertising and promotion per year $15,000; Commissions (4% of sales) $36,000. What was the variable cost per unit sold for 20X2?
Var cost = 400,000 + 36,000
So pu Var cost = 436,000 / 2000 = 218
$200
$339
$218
$18
Question 5. Feedback regarding previous actions may affect
implementation of the decision.
future predictions.
the decision model.
All of the above
Question 6. For decision making, a listing of the relevant costs
will help the decision maker concentrate on the pertinent data.
will only include future costs.
will only include costs that differ among alternatives.
All of the above
Question 7. A computer system installed last year is an example of a(n)
avoidable cost.
differential cost.
relevant cost.
sunk cost.
Question 8. Northwoods Incorporated manufactures rustic furniture. The cost accounting system estimates manufacturing costs to be $90 per table, consisting of 80% variable costs and 20% fixed costs. The company has surplus capacity available. It is Northwoods' policy to add a 50% markup to full costs. Northwoods is invited to bid on a one-time-only special order to supply 100 rustic tables. What is the lowest price Northwoods should bid on this special order?
Lowest bid = 80%*$90*100 = $7200
$6,300
$13,500
$9,000
$7,200
Question 9. In the theory of constraints, the only direct costs are
direct material, direct labor, and variable overhead costs.
investment costs.
direct material.
direct material and direct labor.
Question 10. Producing more non bottleneck output
allows for the maximization of overall contribution.
creates less pressure for the bottleneck workstations.
creates more inventory and increases throughput contribution.
creates more inventory, but does not increase throughput contribution.