UNIT 5 QUIZ\t1. Question : When a firm determines the desired cost for a product or service,\tgiven a competitive market price, in order to earn a desired profit,\tthe firm is exercising:\tStudent Answer: Target costing.\tLife cycle costing.\tVariable costing.\tAbsorption costing.\tCompetitive costing.\t\u00a0\t\u00a0\tQuestion 2. Question : The theory of constraints (TOC) emphasizes which of the\tfollowing?\tStudent Answer:\tDeveloping competitive constraints.\tFinding and eliminating design constraints.\tRemoving bottlenecks from the production process.\tImproving overall production efficiency.\t\u00a0\t\u00a0\tQuestion 3. Question : Generally, firms will price a product more competitively at which\tstages of the product’s sales life cycle?\tStudent Answer:\tProduct introduction and Growth.\tMaturity and Decline.\tThroughout the cycle.\tAt the end of the life cycle.\tUNIT 5 QUIZ\tQuestion 4. Question : Throughput margin is defined as sales less:\tStudent Answer:\tDirect labor costs.\tDirect material costs.\tDirect labor and material costs.\tProcessing costs.\tManufacturing costs.\t\u00a0\t\u00a0\tQuestion 5. Question : Traditional financial control systems have recently been criticized\tbecause:\tStudent Answer:\tThey use flexible, not static, budgets.\tThey generally lead to goal-congruent behavior on the part of\tmanagers.\tThey focus more in improving basic business processes than\tshort-term financial results.\tThey fail to incorporate nonfinancial performance indicators\tinto the evaluation process.\tThey provide performance data on a real-time basis.\t\u00a0\t\u00a0\tQuestion 6. Question : Which one of the following is the difference between the actual\thourly wage rate and the standard hourly wage rate, multiplied by\tthe actual direct labor hours worked during a period?\tStudent Answer:\tTotal direct labor standard cost variance.\tDirect labor efficiency variance.\tDirect labor usage variance.\tDirect labor flexible-budget variance.\tDirect labor rate variance.\t\u00a0\t\u00a0\tUNIT 5 QUIZ\tQuestion 7. Question : A “standard cost” is a predetermined amount (e.g., cost) that:\tStudent Answer:\tShould be incurred under relatively efficient operating\tconditions.\tWill be incurred for an operation or a specific objective.\tMust occur for an operation or a specific objective.\tCannot be changed once it is established by management.\tIs useful for planning and control but not inventory valuation\tpurposes.\t\u00a0\t\u00a0\tQuestion 8. Question : The difference between the total actual sales revenue of a period\tand the total flexible-budget sales revenue for the units sold during\tthe period is the:\tStudent Answer:\tTotal flexible-budget variance.\tSales volume variance.\tSelling price variance.\tOperating income flexible-budget variance.\tOperating income variance.\t\u00a0\t\u00a0\tQuestion 9. Question : Which of the following is not a plausible cause of a systematic\tvariance?\tStudent Answer:\tPrediction error.\tModeling error.\tImplementation error.\tMeasurement error.\tRandom error\t\u00a0\t\u00a0\tUNIT 5 QUIZ\tQuestion 10. Question : Which one of the following journal entries in a standard cost\tsystem would be used to apply factory overhead costs to\tproduction?\tStudent Answer:\tA debit to the factory overhead account, at standard cost.\tA credit to the factory overhead account, at standard cost.\tA debit to WIP inventory, at actual cost.\tA credit to Finished Goods Inventory, at standard cost.\t\u00a0\t\u00a0\tQuestion 11. Question : Which of the following factors is not usually important when\tdeciding whether to investigate a variance?\tStudent Answer:\tMagnitude of the variance.\tTrend of the variance over time.\tWhether the variance is favorable or unfavorable.\tCost of investigating the variance.\tLikelihood that the variance will recur in the future.\t\u00a0\t\u00a0\tQuestion 12. Question : The difference between total variable overhead cost incurred and\tthe standard variable overhead cost based on the actual quantity of\tthe cost driver used to apply variable overhead is the:\tStudent Answer:\tTotal variable overhead variance.\tVariable overhead spending variance.\tVariable overhead rate variance.\tVariable overhead efficiency variance.\t\u00a0\tUNIT 5 QUIZ\tQuestion 13. Question : Electronic Component Company (ECC) is a producer of high-end\tvideo and music equipment. ECC currently sells its top of the line\t“ECC” DVD player for a price of $250. It costs ECC $210 to\tmake the player. ECC’s main competitor is coming to market with\ta new DVD player that will sell for a price of $220. ECC feels that\tit must reduce its price to $220 in order to compete. The sales and\tmarketing department of ECC believes the reduced price will\tcause sales to increase by 15%. ECC currently sells 200,000 DVD\tplayers per year.\tAssuming sales and marketing are not correct in their estimation\tand the volume of sales is not changed and ECC meets the\tcompetitive price, what is the target cost if ECC wants to maintain\tits same income level?\tStudent Answer:\t$210.\t$200.\t$190.\t$180.\t\u00a0\t\u00a0\tQuestion 14. Question : Lucky Company’s direct labor information for the month of\tFebruary is as follows:\tActual DL Hours Word (AQ) = 61,500\tStandard DL Hours Allowed (SQ) = 63,000\tTotal Payroll for DL = $774,900\tDL Efficiency Variance = $18,000\tThe standard direct labor rate per hour is:\tStudent Answer:\t$12.00.\t$12.30.\t$12.60.\t$13.20.\t$13.50.\tUNIT 5 QUIZ\t\u00a0\tQuestion 15. Question : Lucky Company’s direct labor information for the month of\tFebruary is as follows:\tActual DL Hours Word (AQ) = 61,500\tStandard DL Hours Allowed (SQ) = 63,000\tTotal Payroll for DL = $774,900\tDL Efficiency Variance = $18,000\tThe actual direct labor rate per hour (AP) is:\tStudent Answer:\t$12.00.\t$12.30.\t$12.60.\t$13.20.\t$13.50.<\/p>\n","protected":false},"excerpt":{"rendered":"
UNIT 5 QUIZ 1. Question : When a firm determines the desired cost for a product or service, given a competitive market price, in order to earn a desired profit, the firm is exercising: Student Answer: Target costing. Life cycle Read More …<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-217256","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/217256","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/comments?post=217256"}],"version-history":[{"count":0,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/217256\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/media?parent=217256"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/categories?post=217256"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/tags?post=217256"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}