Multiple Choice Answers

At the break-even point of 2,500 units, variable costs are $55,000, and fixed costs are $32,000. How much is the selling price per unit? A. $9.20. B. $34.80. C. $12.80. D. $22.00

At the break-even point of 2,000 units, variable costs are $55,000, and fixed costs are $32,000. How much is the selling price per unit? A. $11.50. B. $43.50. C. $16.00. D. Not enough information

A variable cost is a cost that A. occurs at various times during the year. B. varies per unit at every level of activity. C. varies in total in proportion to changes in the level of activity. D. may or may not be incurred, depending on management’s discretion.

The first step in activity-based costing is to A. assign manufacturing overhead costs for each activity cost pool to products. B. compute the activity-based overhead rate per cost driver. C. identify and classify the major activities involved in the manufacture of specific products. D. identify the cost driver that has a strong correlation to the activity cost pool.

A well-designed activity-based costing system starts with A. computing the activity-based overhead rate. B. identifying the activity-cost pools. C. assigning manufacturing overhead costs for each activity cost pool to products. D. analyzing the activities performed to manufacture a product.

There is no difference between variable-costing and absorption-costing income if there is no_____. A. ending inventory B. beginning inventory C. change in inventory level D. variable overhead cost

Differences between a job order cost system and a process cost system include all of the following except the A. unit cost computations.B. flow of costs. C. documents used to track costs. D. point at which costs are totaled.

The _____ is also called the statement of financial position. A. statement of retained earnings B. statement of cash flow C. income statement D. balance sheet

The theory of business social responsibility that holds that a business owes duties solely to produce the highest return for its shareholders is: A. The stakeholder interest theory. B. The corporate citizenship theory. C. The maximizing profits theory. D. The social audit theory. E. The moral minimum theory.

Which social responsibility theory has been advocated by Novel Prizewinning economist Milton Friedman? A. Stakeholder interest B. Maximizing profits C. Corporate citizenship D. Moral minimum E. Corporate social audit

The costs of delivering products in the _____ channel are much higher than delivering products in the _____ channel. A. digital, physical B. e-commerce, digital C. physical, financial D. digital, e-commerce E. physical, digital

_____ is the integration of economic, social, cultural, and ecological facets of life, enabled by information technologies. A. globalization B. nationalization C. business environment D. regionalization

Which of the following is NOT a function of functional area information systems? A. provides data from business events to the corporate database B. supports the managerial tasks of planning, organizing, and controlling operations C. provides analysis capabilities to middle level managers and staff D. provides information mainly in the form of reports E. provides information to managers in the functional areas

An experiment is a ________. A. Always greater than 1 B. Collection of outcomes C. The act of taking a measurement or the observation of some activity D. Collection of events

What role does a trade in allowance on old equipment play in a decision to retain or replace equipment?
It is relevant since it reduces the cost of the new equipment

SmartCard is considering eliminating one of its product lines. The fixed costs currently allocated to the product line will be allocated to other product lines upon discontinuance. What financial effects occur if the product line is discontinued?

It costs Fortune Company $12 of variable and $5 of fixed costs to produce one bathroom scale which normally sells for $35. A foreign wholesaler offers to purchase 1,000 scales at $16 each. Fortune would incur special shipping costs of $2 per scale if the order were accepted. Fortune has sufficient unused capacity to produce the 1,000 scales. If the special order is accepted, what will be the effect on net income?

Whisker Clean Company spent $4,000 to produce Product 89, which can be sold ‘as is’ for $5,000, or processed further incurring additional costs of $1,500 and then be sold for $7,000. Which amounts are relevant to the decision about Product 89?

A company decided to replace an old machine with a new machine. Which of the following is considered a relevant cost?