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Unformatted text preview: UCFBusiness-PMBA ACCOUNTING 6425 MIDTERM EXAM REVIEW FALL 2011 Indicate the best answer to each of the following questions (each question is worth 4 points – 100 point total): Questions 1. and 2. are based on the following information: Alpha Manufacturing sells specialized shipping containers. The following data represents normal sales for the company: Selling Price $75 Full Cost 50 Variable Costs 35 1. Alpha is operating near capacity and has been approached by a new customer who wants to order 1,000 units at $65 per unit. Alpha will have to give up sales of 600 units to its current customers to accept this order. How will Alpha’s profits change if the order is accepted? ANSWER: Increase by $6,000 2. Now suppose only $50 per unit were offered for the special order. How would Alpha’s profits be affected by accepting this order? ANSWER: Decrease by $9,000 3. Direct Costs: A. May be engineered or discretionary. B. Are constant across all levels of output. C. Can be traced to a specific product. D. Are never considered in ABC analysis. E. NONE OF THE ABOVE . ANSWER: A 4. The use of a Balanced Scorecard system: A. Guarantees increased productivity. B. Guarantees increased profitability. C. Is a more comprehensive system of evaluation that traditional financial measures. D. Uses only nonfinancial measures. E. NONE OF THE ABOVE. ANSWER: C 5. The use of departmental versus a uniform overhead allocation rate across all units: A. Simplifies the management accounting process. B. Treats some units more fairly than others. C. Allows for more accurate product costing decisions D. Treats all overhead costs equally. E. ALL OF THE ABOVE. ANSWER: C 6. Period costs: A. Consist only of variable costs. B. Consist only of direct costs. C. Include all costs that can be traced to a product. D. Include all costs that cannot be traced to a product....
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- Spring '11