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Learning Objective 6-5 1) In indirect cost pools, administrative costs are ________. A) direct costs B) batch-level costs C) output unit-level costs D) product-sustaining costs E) facility-sustaining costs 2) In indirect cost pools, design costs are ________. A) batch-level costs B) output unit-level costs C) product-sustaining costs D) direct costs E) facility-sustaining costs 3) In indirect cost pools, shipment setup costs are ________. A).
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Learning Objective 7-8 1) The practice of charging different customers different prices for the same product or service is: A) job costing. B) product costing. C) price discrimination. D) product life-cycle. E) customer life-cycle. 2) Insensitivity of demand to price changes is called: A) price discrimination. B) demand inelasticity. C) predatory pricing. D) peak-load pricing. E) collusive pricing. 3) The practice of charging.
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7) The costs that influence prices a company can charge for its products is: A) product life-cycle costing. B) life-cycle budgeting. C) customer life-cycle costs. D) life-cycle costing. E) price discrimination. 8) In life-cycle budgeting, managers estimate the revenues and business function costs across the entire value chain from a product's initial R&D to its final.
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Learning Objective 6-3 1) The costing system that refines a costing system by identifying individual activities as the fundamental cost object is ________. A) cost hierarchy B) cost-allocation base C) refined-costing system D) activity-based costing system E) manager-based costing system 2) Determining costs of activity pools requires assigning costs accumulated in various account classifications to each of.
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11) Companies operating in less competitive markets offer products or services that differ from each other. 12) The Nutcracker Company manufactures two types of bolts: Top Point, the premium bolt, and a less competitive bolt, Bottom Point. The managerial accountant uses activity-based costing system (ABC) to calculate the manufacturing cost of.
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13) The Stratford Elite Manufacturing Company cuts and sews insulated curtains. The facility has two workstations to permit managers to cut and finish the product. The manager reported that the cutting station must wait to receive fabric because they wait for the cut fabric from the workers at the cutting.
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Learning Objective 8-2 1) In a/an ________, the graph of total costs is not a straight line within the relevant range. A) cost object B) learning curve C) experience curve D) step cost function E) nonlinear cost function 2) A/an ________ is a function that measures how labor-hours per unit decline as units of production increase because.
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Learning Objective 7-5 1) Target annual operating income divided by invested capital is ________. A) target price B) locked in costs C) target cost per unit D) target operating income per unit E) target rate of return on investment 2) Amarillo Manufacturing uses a 13% markup on the full unit cost of Product X to compute the.
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Learning Objective 8-7 1) Managerial accountants believe that one component of an ideal database contains: A) incorrect cost classifications. B) misplaced decimal points in the data. C) fixed costs allocated as if they were variable costs. D) extreme values not used to calculate the cost functions. E) accurate measurements of independent variables and dependent variables. 2) Which.
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Learning Objective 9-5 1) Which of the following is not true about the theory of constraints? A) Defines the measure of investments. B) Useful in both bottleneck and nonbottleneck operations. C) Used to maximize operating income. D) Defines the throughput margin measurement. E) not used to define the measurement of operating costs. 2) Managers can identify the.
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Learning Objective 9-3 1) ________ is purchasing goods and services from outside vendors. A) Insourcing B) Outsourcing C) Incremental cost D) Full cost of product E) Business function cost 2) Producing the same goods or providing the same services within an organization is called ________. A) outsourcing B) insourcing C) incremental cost D) full cost of product E) business function costs 3) Decisions.
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Learning Objective 7-3 1) The estimated price for a product or service that customers are willing to pay is: A) target price. B) listing price. C) selling price. D) strategic price. E) consumer price. 2) Market-based pricing starts with: A) target price. B) listing price. C) selling price. D) strategic price. E) consumer price. 3) To earn the target return on capital, the.
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Learning Objective 9-7 1) The book value of an old machine that is no longer in use is: A) relevant because it is a current cost. B) irrelevant because it is a past, or sunk cost. C) the original cost plus accumulated depreciation. D) the original cost multiplied by accumulated depreciation. E) the original cost divided.
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Learning Objective 6-4 1) Which of the following is not a level in the cost hierarchy? A) Batch-level costs. B) Input-level unit costs. C) Output-unit level costs. D) Product-sustaining costs. E) Facility-sustaining costs. 2) Which of the following are costs of activities performed on each individual unit of a product or service? A) Batch-level costs. B) Input unit-level costs. C).
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Learning Objective 7-6 1) The reporting and assessment of revenues earned from customers and the costs incurred to earn those revenues is: A) price discount. B) whale curve. C) price markups. D) customer-cost hierarchy. E) customer-profitability analysis. 2) The reduction in selling price below list selling price to encourage customers to purchase more quantities is: A) price discount. B).
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Learning Objective 8-6 1) The method that relies on analyzing physical relationships between cost drivers and costs is ________. A) conference B) quantitative C) account analysis D) regression analysis E) industrial engineering 2) The methods that use subjective assessments to choose a cost driver and to estimate the fixed and variable components of the cost function are: A).
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13) The managers at Wicker Basket Manufacturing Mart need to determine the contribution margin per machine-hour and the contribution margin per machine-hour to determine the product that maximizes the total contribution margin, and to determine which product to produce and sell. Standard BasketDeluxe Basket Contribution margin per unit$270$260 Machine-hours required to produce one.
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Learning Objective 8-3 1) Which of the following is not a representation of a cause-and-effect relationship? A) A physical relationship between the level of activity and costs. B) Units of production are used as the activity that affects direct material costs. C) A contractual agreement. D) Knowledge of operations. E) A contract that fails to specify.
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Learning Objective 7-1 1) Which of the following is not true about pricing decisions? A) Customers are an influence on demand and supply. B) Competitors are an influence on demand and supply. C) Costs are an influence on demand and supply. D) Managers price products based on supply and demand. E) Customers never have an influence.
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10) The manager at Elegant Rugs used regression analysis and reported the following cost function to predict future indirect manufacturing labor costs: y = $300.98 + ($10.31 per machine hour × 25 machine hours) What is the cost driver? 11) Why do managers prefer to collect data related to costs and cost drivers.
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Learning Objective 9-1 1) A formal method of making a choice that might involve both quantitative and qualitative analysis is ________. A) sunk costs B) stockout costs C) carrying costs D) decision model E) economic order 2) Decision models include: A) only high-low analysis. B) only regression analysis. C) only qualitative analysis. D) only quantitative analysis. E) quantitative and qualitative analysis. 3) In.
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Learning Objective 9-2 1) Relevant costs are ________. A) past costs only B) expected future costs C) qualitative factors only D) quantitative factors only E) one-time-only costs 2) We define relevant revenues as ________. A) sunk costs B) theory of constraints C) product-mix decisions D) expected future revenues E) past costs in decisions making 3) Past costs are historical costs, and ________. A) constraints.
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11) What should a managerial accountant consider if all or most of the indirect costs are identified as output unit-level costs? 12) When comparing the strategic and operational benefits of activity-based costing systems, what should managers understand about information technology? 13) What are some important considerations to managers that consider adopting the.
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Learning Objective 6-6 1) Which of the following is not a sign of when an activity-based costing system would likely provide the manager with the most benefits? A) Significant amounts of indirect costs are allocated using only one or two cost pools. B) All or most indirect costs are identified as output unit-level.
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11) The Ready Corporation reported the following information: Compute the budgeted indirect cost rate for each activity. A) $4,001; $45.10; $308; $5 B) $4,010; $50.25; $310; $6 C) $4,110; $51.50; $325; $7 D) $4,250; $52.50; $350; $8 E) $4,375; $58.50; $400; $9 12) The auditor at the Yarn Shoppe needs to determine whether it is beneficial to.
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11) Why do managers use decision models? 12) The manager at the Screen Saver Manufacturing manufactures screen savers. The manager continues to find ways to reduce manufacturing costs and the manager received a proposal from Entrepreneurial Consultants to rearrange the production in the upcoming year. The managerial accountant provided the following.
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Learning Objective 8-1 1) The horizontal axis is called the ________. A) a-axis B) b-axis C) x-axis D) y-axis E) z-axis 2) The vertical axis is called the ________. A) a-axis B) b-axis C) x-axis D) y-axis E) z-axis 3) The Parker Cellular Company is charged a total cost that changes in proportion to the number of minutes used. The number of minutes.
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12) What are the first three categories of the customer-cost hierarchy? Why do managers want to analyze customer-level indirect costs? 13) Customer-Profitability Analysis for Consumer Banking Clients Retail Customer Code Customer-Level Operating Income Customer Revenue Customer- Level Operating Income Divided by Revenue Cumulative Customer-Level Operating Income   (1) (2) (3) (4) A $5,000,000 $25,000,000 ? $5,000,000 D 3,795,000 28,000,000 ? 7,500,000 C 2,250,000 15,000,000 ? 8,250,000 B 2,650,000 7,200,000 ? 9,100,000   13,695,000 75,200,000 ? 29,850,000 Required: Compute the Customer-Level Operating Income. .
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Learning Objective 7-2 1) The strategic decision designed to build long-run relationships with customers based on stable and predictable prices is ________. A) mid-run pricing B) cost-run pricing C) some-run pricing D) short-run pricing E) long-run pricing 2) To set long-run prices, managers calculate the ________ -cost of producing and selling a product. A) full B) small C) partial D) initial E).
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15) Motorcycle Production Services produces miniature motorcycles. The company has two departments, the painting department and the sanding department. The painting department is constrained by the speed of the employees that operate the sanding machines. The employees that work in painting always receive late work from the employees in the.
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Learning Objective 7-7 1) ________ spans the time from initial R&D on a product to when customer service and support is no longer offered for that product. A) Product life cycle B) Life-cycle budgeting C) Life-cycle costing D) Customer life-cycle costs E) Price discrimination 2) ________ tracks and accumulates business function costs across the entire value chain.
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Learning Objective 9-4 1) The decisions managers make about which products to sell and in what quantities are: A) qualitative factors. B) contribution margins. C) product-mix decisions. D) contribution margin per unit. E) computer-related operating costs. 2) Which of the following is not true about product-mix decisions? A) Decisions have long-run focus. B) Decisions have short-run focus. C) Managers maximize.
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Learning Objective 7-4 1) The cost that, if eliminated, would reduce actual or perceived value or utility customers experience from using the product or service is ________. A) value-added cost B) locked-in cost C) designed-in cost D) conversion costs E) non-value added costs 2) Costs that have not yet been incurred but will be incurred in the.
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Learning Objective 9-6 1) Rent, general administration, and corporate-office costs are ________ costs that will not change if a manager drops an account. A) past B) future C) current D) relevant E) reliability 2) Overhead costs allocated to a sales office and individual customers are always ________. A) past B) future C) current D) relevant E) irrelevant 3) There is no opportunity cost.
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Learning Objective 6-2 1) The costing system that reduces the use of broad averages for assigning the cost of resources to cost objects is the ________. A) job-costing system B) process-costing system C) product-costing system D) market-costing system E) refined-costing system 2) The growing demand for customized products, which has led managers to ________ the variety of.
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11) How do managers determine the most profitable production schedule and the most profitable product mix? 12) The managers at the Wicker Basket Manufacturing Mart assemble two baskets, a standard wicker basket and a deluxe wicker basket, at a plant in Virginia Beach, Virginia. Only 200 machine hours are available daily.
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Learning Objective 8-4 1) Which of the following estimation methods estimates cost functions by analyzing the relationship between inputs and outputs in physical terms? A) Industrial Engineering Method. B) Conference Method. C) Account Analysis Method. D) Quantitative Analysis Method. E) Mixed Approach Method. 2) Which of the following estimation methods is used by managers to estimate cost.
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Learning Objective 8-5 1) In which step of estimating a cost function using quantitative analysis would a manager determine the dependent variable to use in a cost relationship? A) Step 1: Choose the Dependent Variable. B) Step 2: Identify the Independent Variable, or Cost Driver. C) Step 3: Collect Data on the Dependent Variable.
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Learning Objective 6-7 1) The method of management decision making that uses activity-based costing information to improve customer satisfaction and profitability is ________. A) job-cost management B) action-cost management C) project-cost management D) product-cost management E) activity-based management 2) Which of the following is not a decision that managerial accountants seek when they use activity-based management? A) Decisions.
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11) The Lawn Corporation produces a part that is used in the manufacture of one of its products. The costs associated with the production of 10,000 units of this part are as follows: Direct materials$80,000 Direct labor120,000 Variable factory overhead50,000 Fixed factory overhead140,000 Total costs$390,000 The managerial accountant reported that $50,000 of the fixed factory overhead.
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11) Which of the following is the statistical method used by managers to measure the average amount of change in the dependent variable associated with a unit change in one or more independent variables? A) Cost function. B) Relevant range. C) Account analysis. D) High-low method. E) Regression analysis. 12) Which of the following is the.
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11) Zell Company produces a special hammer for carpenters. The budgeted total cost in the indirect-cost pool is $75,000. The budgeted total quantity of cost allocation base is 30,000. What is the budgeted indirect cost rate? A) $10.00 B) $15.00 C) $20.00 D) $25.00 E) $30.00 12) The Monroe Company manufactures a special saddle. The budgeted.
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20) Rachel and Joey went to dinner and incurred the following costs: Joey's total dinner cost:$30.00 Rachel's total dinner cost:$21.00 Required: Compute the average cost of dinner. If they each pay the average cost of dinner, calculate the amount of Rachel's cross-subsidization to Joey. 21) What should managerial accountants understand when prices of their products.
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