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Exam 2 Managerial

Managerial/cost accounting

QuestionAnswer
Which of the following terms is used to describe a cost that changes in response to alternative courses of action? Differential Cost
Which of the following terms is used to describe a cost that has been incurred that CANNOT be changed by present or future decisions? Sunk Cost
Which of the following describes an important qualitative factor to consider regarding a special order? The effect of the sale of special-order units will have on the sale of regularly priced units.
Which of the following statements regarding life-cycle product costing and pricing is NOT correct? The product life-cycle covers the time from initial research and development to the time at which the product is first sold to customers.
Which of the following statements regarding target pricing is NOT correct? Target cost equals the target price plus the desired profit margin.
Which of the following statements is NOT correct? Dumping is the practice of setting the selling price of a product at a low price with the intent of driving competitors out of the market or creating a barrier to entry for new competitors.
Differential costs are: (CMA adapted) the difference in total costs that result from selecting one choice instead of another.
Which of the following statements regarding differential costs is false? The full-cost fallacy occurs when a decision maker fails to include fixed manufacturing overhead in the product's cost.
Which of the following costs are NOT considered in a differential analysis for a make-or-buy decision? Fixed overhead that will continue if the item is purchased
The practice of setting the selling price below cost with the intent to drive competitors out of business is: predatory pricing.
For the past five years, company has produced electronics to chemistry labs throughout the US. A strong competitor entered the market, Major is considering whether to continue electronics. Items relevant to the decision to sale of the electronics? The space now used to produce the magnets would be used to eliminate the need to rent warehouse space. AND Sales volume (units) is estimated to drop by 50% once the competitor becomes fully operational.
The theory of constraints focuses on minimizing all of the following except: selling expenses per unit sold
In the cost equation TC = F + VX, which term refers to the volume of activity? X
The engineering method of estimating costs: All are correct: does not require data from prior activities, can detail each step required to perform an operation, can be expensive to use, and is often based on optimal conditions
Y = $300 + $2X, where X = the number of direct labor hours incurred. Assuming that the company expects 1,350 direct labor hours to be incurred during July, what maintenance cost would it expect? 300+2(1350) 300+2700 3000
The coefficient of determination or R-squared (R2) is interpreted as: the proportion of the variation in the dependent variable explained by the independent variable.
What percentage of the changes in machine maintenance cost is explained by the independent variable? R2= 0.733 A: 73.33%
Which of the following statements regarding the common problems with the use of regression estimates is not correct? Some of the more common problems with using regression estimates include failing to include outliers.
Which of the following statements regarding the implementation of regression analysis is not correct? The learning phenomenon means that variable costs tend to increase per unit as the volume of activity increases.
Which of the following statements regarding the advantages and disadvantages of alternative cost estimation methods is not correct? Companies using precious metals or relying on labor in developing countries have found that past cost data are very helpful in predicting future costs.
Created by: ande1472
 

 



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