Question 1. Which of the following statements about the cost-benefit approach is TRUE?
a. Resources should be spent if the costs of a decision outweigh the benefits of the decision.
b. A cost-benefit approach would not be appropriate for a decision to install a budget system or not.
c. Resources should be spent if they are expected to better attain company goals in relation to the expected costs of these resources.
d. In a cost-benefit analysis, both costs and benefits are easy to obtain.
Question 2. Cost accounting:
a. provides information on the cost of servicing commercial customers
b. provides information on the performance of an operating division
c. provides information on the efficiency of factory labor
d. All of these answers are correct.
Question 3. Which of the following is NOT one of the questions management accountants might attempt to help answer in the formulation of strategy?
a. Does the strategy comply with GAAP (Generally Accepted Accounting Principles)?
b. Who are our most important customers?
c. What substitute products exist in the marketplace?
d. Will adequate cash be available to implement the strategy?
Question 4. The process of preparing a budget:
a. increases accounting efficiencies
b. reduces overcapacity
c. promotes production automation
d. forces coordination and communication across business functions