MAS Post Test 01

33問 • 2年前

問題一覧

Sure Freight, Inc. is planning to purchase equipment to make its operations more efficient. This equipment has an estimated life of 6 years. As part of this acquisition, a P75,000 investment in working capital is anticipated. In a discounted cash flow analysis, the investment in working capital

Should be treated as an immediate cash outflow recovered at the end of 6 years.

In equipment replacement decisions, which one of the following does not affect the decision-making process?

Original fair value of the old equipment.

If an investment project has a profitability index of 1.15, the

Net present value of the project is positive.

if income tax considerations are ignored, how is depreciation handled by the following capital budgeting techniques?

IRR : Excluded ARR: Included PB: Excluded

What is the payback period?

4.7 years

Various budgets are included in the master budget cycle. One of these budgets is the production budget. Which one of the following best describes the production budget?

It is calculated from the desired ending inventory and the sales forecast.

Which one of the following statements regarding the difference between a flexible budget and a static budget is true?

A flexible budget provides cost allowances for different levels of activity, whereas a static budget provides costs for one level of activity.

The use of standard costs in the budgeting process signifies that an organization has most likely implemented a

Flexible budget

A difference between standard costs used for cost control and budgeted costs

Can exist because standard costs represent what costs should be, whereas budgeted costs represent expected actual costs.

The breakeven point in units increases when unit costs

Increase and sales price remains unchanged.

In preparing a cost-volume-profit analysis for his candle manufacturing business, Joe Stark is considering raising his prices P1.00 per candle. Stark is worried about the impact the increase will have on his revenues from craft fairs. Stark is concerned about the

Elasticity of demand.

A cost-volume profit model developed in a dynamic environment determined that the estimated parameters used may vary between limits. Subsequent testing of the model with respect to all possible values of the estimated parameters is termed

A sensitivity analysis.

In calculating the break-even point for a multi-product company, which of the following assumptions are commonly made when variable costing is used? 1. Sales volume equals production volume. 2. Variable costs are constant per unit. 3. A given revenue (sales) mix is maintained for all volume changes.

1,2,and 3

Marlon Enterprises sells three chemicals: petron, septon, and tridon. Petron is the company's most profitable product; tridon is the least profitable. Which one of the following events will definitely decrease the firm's overall breakeven point for the upcoming accounting period?

An increase in anticipated sales of petron relative to sales of septon and tridon.

The amount of variable cost per unit and total fixed cost within a relevant range behave this way in relation to production level:

Production increases, unit variable cost remains constant, total fixed cost remain the same.

Which of the following formulas is used to determine the break-even point when using the contribution margin method?

Unit contribution margin times the break-even number of units equals fixed costs.

Relevant or differential cost analysis

Considers all variable and fixed costs as they change with each decision alternatives.

What is the opportunity cost of making a component part in a factory given no alternative use of the capacity?

Zero.

When considering a special order that will enable a company to make use of currently idle capacity, which of the following costs is irrelevant?

Depreciation.

The least complex segment or are of responsibility for which costs are allocated is an)

Cost center.

A successful responsibility accounting reporting system is dependent upon

The proper delegation of responsibility and authority.

Costs are accumulated by a responsibility center for control purposes when using

Job Order Costing: Yes Process Costing: Yes

A firm earning a profit can increase its return on investment by

Increasing sales revenues and operating expenses by the same percentage.

When evaluating projects, breakeven time is best described as

The point at which discounted cumulative cash inflows on a project equal discounted total cash outflows.

Which one of the following will not occur in an organization that gives managers throughout the organization maximum freedom to make decisions?

Delays in securing approval for the introduction of new products.

The most fundamental responsibility center affected by the use of market-based transfer prices is a(n)

Profit center.

Which one of the following is true concerning standard costs?

If properly used, standards can help motivate employees.

When standard costs are used in a process costing system, how, if at all, are equivalent units of production (EUP) involved or used in the cost report at standard?

The actual equivalent units are multiplied by the standard cost per unit.

If the total materials variance (actual cost of materials used compared with the standard cost of the standard amount of materials required) for a given operation is favorable, why must this variance be further evaluated as to price and usage?

Determining price and usage variances allows management to evaluate the efficiency of the purchasing and production functions.

How should a usage variance that is significant in amount be treated at the end of an accounting period?

Allocated among work-in-process inventory, finished goods inventory, and cost of goods sold.

Under a standard cost system, the materials price variances are usually the responsibility of the

Purchasing manager.

Price variances and efficiency variances can be key to the performance measurement within a company. In evaluating the performance within a company, a materials efficiency variance can be caused by all of the following except the

Sales volume of the product.

For a company that produces more than one product, the sales volume variance can be divided into which two of the following additional variances?

Sales quantity variance and sales mix variance.

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