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49) Explain the differences between short-run pricing decisions and long-run pricing decisions. 12.4   Explain how target pricing and cost-plus pricing help achieve long-term operating income profitability. 1) The "plus" relates to the percentage target return on investment in cost-plus pricing. 2) The target rate of return on investment is the target operating.
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21) Under which of the following methods of cost allocation is there no distinction between fixed and variable costs? A) fixed method B) dual-rate method C) homogeneous method D) standard cost method E) single-rate method 22) Which cost allocation method differentiates between variable and fixed costs? A) dual-rate method B) heterogeneous method C) single-rate method D) variable method E) fixed rate.
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  14.1   Apply relevance as a criterion to decide how to allocate non-manufacturing (period) costs. 1) The allocation of one particular cost must satisfy all four justifications of cost allocation. 2) Indirect costs typically constitute a large percentage of the costs assigned to cost objects. 3) For the economic decision purpose of cost allocation,.
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11) What is the operating income in Year 2? A) $1,804,500 B) $1,440,000 C) $4,620,000 D) $200,000 E) $188,000 12) What is the change in operating income from year 1 to year 2? A) $620,000 favourable B) $364,500 unfavourable C) $364,500 favourable D) $200,000 favourable E) $200,000 unfavourable 13) What is the revenue effect of growth component? A) $440,000 favourable B) $400,000 unfavourable C) $400,000.
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31) Germaine Company provided the following information. Budgeted input 9,750 litres Actual input 8,950 litres Budgeted production 10,000 units Actual production 9,500 units What is the partial productivity ratio? A) 0.97 unit per litre B) 1.02 units per litre C) 1.06 units per litre D) 1.12 units per litre E) 1.71 units per litre 32) Vinetta Ltd. provided the following information: Budgeted input 18,000.
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21) What is the direct manufacturing labour partial productivity, assuming 20,000 widgets were produced during the year and 80,000 direct manufacturing labour-hours were used? A) 0.25 unit per direct manufacturing labour-hour B) 0.50 unit per direct manufacturing labour-hour C) 0.75 unit per direct manufacturing labour-hour D) 4.00 unit per direct manufacturing labour-hour E) 1.25 unit.
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14.3   Analyze how the selection of the single or dual cost allocation rate affects the calculation of the efficiency variance. 1) The user department is responsible for any unfavourable cost variances during the budgeting period if budgeted prices and quantities are used for cost allocation. 2) User departments will be able to.
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11) Which of the following illustrates a purpose for allocating costs to cost objects? A) to provide information for economic decisions B) to reduce competition C) to determine employee benefit costs D) to defer income and reduce taxes payable E) to motivate employees 12) Deciding whether to make a component part or to purchase it, would.
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41) Define engineered and discretionary costs and give two examples of each. 42) Can a company identify unused capacity and, if so, how can unused capacity be managed? 43) Ranger Electronics Ltd. manufactures a variety of high quality electronic components. Data from the last three months are presented below: April May June Direct.
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21) What is the operating income in year 2? A) $378,600 B) $366,120 C) $1,242,000 D) $403,520 E) $210,000 22) What is the change in operating income from year 1 to year 2? A) $147,600 favourable B) $143,520 favourable C) $156,120 favourable D) $156,120 unfavourable E) $242,000 favourable 23) What is the revenue effect of growth component? A) $92,000 favourable B) $92,000 unfavourable C) $80,000.
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38) Ellingson Company has budgeted sales of $487,500 with the following budgeted costs: Direct materials$105,000 Direct labour82,500 Factory overhead: Variable$60,000 Fixed67,500 Selling and administrative expenses: Variable$45,000 Fixed62,500 Compute the target profit percentage for setting prices as a percentage of: a.Total manufacturing costs b.Total variable costs c.Total costs d.Variable manufacturing costs 39) Timothy Company has budgeted sales of $780,000 with the following budgeted costs: Direct.
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12.2   Evaluate existing information to decide on a competitive price for a special order. 1) Special orders increase income if the revenue from the order exceeds the incremental variable and fixed costs incurred to fill the order. 2) In deciding whether to accept a special sales order, any fixed costs that would.
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13.5   Analyze the results from specific productivity and capacity control strategies to achieve BSC expectations. 1) Engineered costs result specifically from a clear cause-and-effect relationship between output and the resources needed to produce that output. 2) Discretionary costs arise from periodic (usually yearly) decisions regarding the maximum amount to be incurred. 3) Uncertainty.
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44) Central Dental Company manufactures dental chairs. Its most popular model, Deluxe, sells for $2,500. It has variable costs totaling $1,400 and fixed costs of $500 per unit based on an average production run of 5,000 units. It normally has four production runs a year with $200,000 setup costs each.
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32) Learning-4-Fun provides materials that let people teach themselves how to snow ski. It has six different skill-level programs. Each one includes visual and audio learning aids along with a workbook that can be submitted to the company for grading and evaluation purposes, if the person so desires. The accounting system.
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21) What is Acorn's target cost if the company wants to maintain its same income level, and marketing is correct? A) $280.00 B) $270.00 C) $252.00 D) $236.27 E) $227.27 Answer the following question(s) using the information below. After conducting a market research study, Schultz Manufacturing decided to produce a new interior door to complement its exterior.
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7) Developing life-cycle reports for each product requires tracking both costs and revenues on a product-by-product basis over a number of accounting periods. 8) Customer life-cycle costs focus on the total costs to a customer of acquiring and using a product or service until it is replaced. 9) Life-cycle costing, from an.
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11) Using the single-rate method transforms the fixed costs per hour into a variable cost to users of that facility. 12) The single-rate cost-allocation method provides better information for decision making than the dual-rate method. 13) An advantage of the single-rate method is that it is easier and always the.
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19) The cost of operating the quality control department of Ames Manufacturing includes $608,000 of fixed costs and $400,000 of variable costs. The department normally budgets 21,000 inspection hours a year. Two departments receive quality control checks, fabrication and assembly. Fabrication is budgeted at 1,000 hours a month, while assembly.
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  Use the information below to answer the following question(s). Following a strategy of product differentiation, Despotovich Corporation makes a high-end Computer Monitor, CM12. Despotovich Corporation presents the following data for the years 1 and 2: Year 1Year 2 Units of CM12 produced and sold5,0005,500 Selling price$400$440 Direct materials (pounds)15,00015,375 Direct materials costs per kilogram $40$44 Manufacturing capacity.
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21) Measures of the balanced scorecard's internal-business-process perspective include all of the following EXCEPT A) operating capabilities. B) number of new products. C) employee turnover rates. D) defect rates. E) production cycle time. 22) Which of the following is NOT true of a good balanced scorecard? A) It tells the story of a company's strategy by.
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11) Pricing for one-time-only special orders is, typically, A) a pricing decision using the time horizon. B) a short-run decision. C) a long-run decision. D) higher in variable costs than usual. E) based on fixed costs alone. 12) For long-run pricing decisions, using stable prices has the advantage of A) helping build buyer-seller relationships. B) reducing the need.
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  Use the information below to answer the following question(s).   Following a strategy of product differentiation, Instruments Inc. makes a hand held calculator, II400. Instruments Inc. presents the following data for the years 1 and 2 Year 1Year 2 Units of II400 produced and sold50,00052,500 Selling price$40$44 Direct materials (kilograms)150,000153,375 Direct materials costs per kilogram $4.00$4.40 Manufacturing capacity.
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49) Required: Present the following, a.The change in operating income from cost leadership. b.The change in operating income due to industry wide effects. c.The effect of product differentiation on operating income and a summarization of the change in operating income between Year 1 to Year 2. 50) Describe three key balanced scorecard components in doing.
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39) Total factor productivity (TFP) is easy to compute for a single-product company. When dealing with a multiproduct company, one of two adjustments must be made. What are these potential adjustments? 40) Fairytale Weddings manufactures wedding dresses. The following information relates to the manufacture of gowns in its Perth plant: Year 1Year.
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11) One way to eliminate unused capacity is to downsize. 12) Downsizing often means eliminating jobs, which can have an adverse effect on employee morale. 13) Which of the following best describes the effect of uncertainty? A) The higher the level of uncertainty about the relationship between resources used and outputs,.
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21) Scarborough Sales, a real estate company specializing in apartment rentals and home sales, is having difficulty in gathering appropriate cost information for evaluating its operations. It owns several large apartment complexes and sells homes owned by builders or existing homeowners. As the company's new accountant you define cost by.
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  Use the information below to answer the following question(s). Following a strategy of product differentiation, Ernsting Ltd. makes high quality electronic components. Ernsting Ltd. presents the following data for the past two years relating to its XJ649 product. Year 1Year 2 Units of XJ649 produced and sold4,0004,320 Selling price$800$850 Direct materials (kilograms)10,40012,360 Direct materials costs per.
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42) The Alex Miller Corporation operates one central plant that has two divisions, the Flashlight Division and the Lamp Division. The following data apply to the coming budget year: Budgeted costs of the operating the plant for 10,000 to 20,000 hours: Fixed operating costs per year$240,000 Variable operating costs$10per hour Practical capacity20,000hours per year Budgeted long-run.
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36) Grader Company manufactures road graders. Because its managers all have engineering backgrounds, it prefers nonfinancial information for its decision-making models. Therefore, it requires that the accountants gather data to assist in the examination of nonfinancial results of operations. The following information relates to the manufacture of a mobile paver. Year.
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14.2   Evaluate and select between a single- and dual-rate cost method to apply period costs of IT services. 1) There are multiple cost objects in most costing systems. 2) A cost pool is a grouping of individual cost items. 3) The cost pool is homogeneous if all included activities have the same or.
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17) What are the Satellite Inc. life cycle budgeted costs? A) $424,000 B) $1,272,000 C) $639,000 D) $1,392,000 E) $298,000 18) What is the Satellite Inc. life cycle operating income? A) $408,000 B) $76,000 C) $388,000 D) $348,000 E) $288,000 Use the information below to answer the following question(s).   N-C Associates is in the process of evaluating its new client services for the.
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13.4   Evaluate strategic success at implementing a cost leadership strategy using balanced scorecard measures. 1) The growth component measures the increase in revenues minus the increase in costs from selling more units of a product. 2) The productivity component measures the reduction in costs attributable to a reduction in the quantity of.
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11) Which of the following is a measure of the customer perspective? A) return on investment B) market share in the high-end appliance market C) development of new products or services D) production cycle time E) revenue growth 12) Which of the following is a measure of the internal business perspective? A) return on investment B) market share.
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25) Buck Corporation plans to grow by offering a computer monitor, the CM3000 that is superior and unique from the competition. Buck believes that putting additional resources into R&D and staying ahead of the competition with technological innovations are critical to implementing its strategy. Required: a.Is Buck's strategy one of product differentiation.
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17) Taylor Stadium is evaluating ticket prices for its baseball games. Studies have shown that Monday and Tuesday ball games average less than half the fans of games on other days. The following information pertains to the stadium's normal operations per season. Average fans per game 5,000 fans Average fans per Monday/Tuesday game 2,000.
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11) Both fixed and variable costs are allocated according to capacity used. The fixed and variable costs allocated to the Barbell Department are A) $30,000 and $50,000, respectively. B) $30,000 and $60,000, respectively. C) $30,000 and $75,000 respectively. D) $40,000 and $60,000, respectively. E) $60,000 and $40,000, respectively. 12) Both fixed and variable costs are allocated.
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11) Which of the following best describes the cost-plus pricing approach? A) Cost base + Markup component = Prospective selling price B) Prospective selling price + Cost base = Markup component C) Cost base + Gross margin = Prospective selling price D) Variable cost + Fixed cost + Contribution margin = Prospective selling price E).
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31) If a dual-rate cost-allocation method is used, what amount of copying facility costs will be budgeted for the Operations Department? A) $28,500 B) $28,200 C) $30,245 D) $29,945 E) $24,600 32) If a dual-rate cost-allocation method is used, what amount of copying facility costs will be allocated to the Operations.
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12.3   Apply two of three pricing methods: target pricing to set target costs and cost-plus pricing. 1) Including unit fixed costs for pricing is often used because of its simplicity. 2) Target pricing includes: (1) developing a needed product, (2) choosing a target price, (3) deriving a target cost per unit, and.
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40) AAA Fence Company manufactures wireless and aluminum fences in a common manufacturing facility. The company has become aware of unusual discrepancies in the costs of its products which management cannot explain. It seems that the sales and related production of wireless fences are in a very consistent growth market.
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31) ________ measures the changes in operating income attributed solely to an increase in the quantity of output between years one and two. A) The growth component B) The price-recovery component C) The productivity component D) The cost leadership component E) The strategy component 32) ________ measures the change in operating income attributable solely to changes.
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  13.1   Explain how the relative strength of five competitive forces help managers identify two types of strategy. 1) Strategies have been classified in many different ways, but what is common is to set the business within its external environment. 2) Cost leadership is an organization's ability to offer products or services that.
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11) If Mr. Gladstone wanted a long-term commitment for supplying this product, what price would most likely be quoted to him? A) $1,000 B) $1,200 C) $1,290 D) $1,400 E) $1,075 Answer the following question(s) using the information below. Welch Manufacturing is approached by a European customer to fulfill a one-time-only special order for a.
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