1. Which of the following is NOT a step in the decision making process?

1. Which of the following is NOT a step in the decision making process?

1. Which of the following is NOT a step in the decision making process?a)Explore workable alternativesb)Determine relevant cost and revenue datac)Consider appropriate non-financial factorsd)Make decision2. Which of the following is NOT a consideration when determining whether to continue making a part or to buy that part?a)Timing of the cash receipts and expendituresb)Opportunity costc)Impact on employeesd)Sunk cost3. Contribution margin is calculated by deducting:a)variable costs from revenueb)variable costs and controllable fixed costs from revenuec)variable costs and common costs from revenued)fixed costs from revenue4. A segment of a business probably should be discontinued if:a)its common costs exceed its contribution marginb)its contribution margin exceeds its controllable fixed costs and its common costsc)if cannot produce a contribution margind)it has a net loss5. When direct costing is used, cost of goods sold reflects:a)both variable and fixed manufacturing costsb)variable manufacturing costs and variable selling and administrative expensesc)variable manufacturing costs onlyd)fixed manufacturing costs only6. On an income statement prepared with a direct costing approach, the excess of sales over the cost of goods sold, based on variable costs only, is referred to as the:a) marginal gross profit on salesb) manufacturing margin c) marginal income on salesd) contribution margin7. Fixed manufacturing costs are written off as current expenses of the period in which they occurred when usingcosts.a)directb)standardc)absorptiond)differential8. Which inventory costing system is NOT acceptable for financial reporting purposes?a)Absorption costingb)Direct costingc)Standard costingd)Variable costing9. Which of the following would NOT be relevant to a decision about whether to continue making a part or whether to buy it from an outside supplier?a)Alternative uses for the plant where the part was produced if the part is purchasedb)A fee previously spent for design of the partc)The variable costs of making the partd)The number of additional employees needed to make the part10. A company has sales of $100,000, ending finished goods inventory of $9,000, variable manufacturing costs of $50,000, and fixed manufacturing costs of $28,000 for the year. Assuming the company uses direct costing, the manufacturing margin for the year is:a)$22,000b)$31,000c)$59,000 d)$13,00011. A segment of a business reported a contribution margin of $36,000 and controllable fixed costs of $12,000. If the segment had been eliminated, the company-wide net income would have been:a)$12,000 higherb)$24,000 lowerc)$36,000 lower d)$24,000 higher12. If a decision must be made to close a warehouse, non-refundable prepaid rent on the warehouse is a(n)cost.a)opportunityb)commonc)sunkd)variable13. When the balance in ending finished goods inventory increases, net income under absorption costing is:a)lower than under direct costingb)higher than under direct costingc)the same under direct costingd)unaffected by the increase14. Which of the following is the first step in the decision-making process?a)Evaluate the cost and revenue datab)Identify workable alternativesc)Define the problemd)Consider appropriate nonfinancial factors15. Which of the following is NOT a consideration regarding a special order?a)If the company has sufficient capacityb)If the special order jeopardized sales to existing customersc)Federal laws regarding the priced)whether employee morale would be affected16.Which of the following cost amounts can be found in a firms accounting records?a)Opportunity costsb)Differential costsc)Incremental costsd)Sunk costs17. Costs that are not directly traceable to a specific segment of a business are calledcosts.a)sunkb)commonc)fixedd)incremental18. Which of the following is NOT true of the direct costing procedure?a)Variable and fixed costs are considered as part of the cost of goods manufacturedb)The cost of goods sold, based solely on variable costs, is subtracted from net sales to arrive at the manufacturing margin.c)Variable selling expenses are deducted from manufacturing margind)Variable administrative expenses are deducted from the manufacturing margin19. Data for a firms first year of operation is given below. The firm uses absorption costing.Units produced (no work in process) 6,000 Units sold 5,000Units in ending inventory of finished goods 1,000Sales price for each unit $75Variable manufacturing costs for each unit mnfctrd $30Variable selling and admin. Exp. For ea unit sold $16Fixed manufacturing costs for the year $90,000Fixed selling and admin. Exp. For the year $65,000The cost of the good sold for the year is:a)$270,000b)$225,000 c)$150,000d)$45,00020. Data for a firms first year of operation is given below. The firm uses direct costing.Units produced (no work in process) 6,000 Units sold 5,000Units in ending inventory of finished goods 1,000Sales price for each unit $75Variable manufacturing costs for each unit mnfctrd $30Variable selling and admin. Exp. For ea unit sold $16Fixed manfctg costs for the year $90,000Fixed selling and admin. Exp. For the year $65,000The cost of the good sold for the year is:a)$270,000b)$225,000c)$150,000 d)$45,000


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