This exam is a study exam. While the exam you take will be similar in format
and could have some similar questions, you can expect to see different
questions and topics covered in different ways at different levels of difficulty.
Quiz #1 Sample
Winter Term 2011
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This exam is a study exam. While the exam you take will be similar in format, you can expect different questions and topics covered in different ways at different levels of difficulty.
PROBLEM I. MULTIPLE CHOICE (120 points total; 3 points each) Use
Variable cost analysis
The cost of a resource that is obtained in large chunks and that increases and decreases only in
response to fairly wide changes in activity
The level of sales at which profit is zero.
Target profit analysis
Estimating what sales volume is needed to achieve a specific target profit
Variable expense ratio
A ratio computed by dividing variable expenses by dollar sales
What is residual income (conceptually)?
Residual income is the net oper
What components make up throughput time?
How do we calculate manufacturing cycle efficiency (MCE)?
Process time MCE = throughput time
What is delivery cycle time?
How is this different from throughput time?
Delivery cycle tim
Margin= Net operating income/ sales
Turnover = Sales/average operating assetsnote: ROI can also be used to calculate an entire
divisions average ROI.
What is the difference between net income and net operating income?
Net operating income is income before
Cost and revenue analysis
The way in which a cost reacts to changes in the level of activity.
Anything for which cost data are desired.
Examples of cost objects are products, customers, jobs, and parts of the organization such
Materials requisition form
A document that specifies the type and quantity of materials to be drawn from the
storeroom identifies the job that will be charged for the cost of those materials.
Multiple predetermined overhead rates
A costing system with mul
An increase in cost between two alternatives. Also see Differential cost.
A cost that cannot be easily and conveniently traced to a specified cost object.
The labor costs of janitors,supervsors, materials hand
Data P2Part II-1:
Morrisey & Brown is a merchandising company that is the sole distributor of a product
that is increasing in popularity among consumers. The company's income statements
for the three most recent months follow:
MORRISEY & BROWN, LTD.
The range of activity within which assumptions about variable and fixed cost behavior
Schedule of cost of goods manufactured
A schedule showing the direct materials, direct labor, and manufacturing overhead costs
A variable that rcsponds to some causal factor; total cost is the depender variable, as represented
by the lctter Y, in the equation Y = a + bX.
Discretionary fixed costs
Those fixed costs that arise from annual decisions by management
A method for analyzing cost behavior in which an account is classified as either variable or
fixed, based on the analyst's prior knowledge of how the cost in the account behaves.
A measure of whatever causes the incurrence o
Chapter 13: Relevant Costs for Decision Making
Choosing between two or more alternative courses of action:
Can be bothnot just variable. This is an important
point to make as we have been focusing all term on the
fact that fixed costs are incurred no matt
Chapter 12: Segment Reporting and Decentralization
What does decentralization look like?
Think of it like companies within companies
What does decentralization mean for the firm?
Think of examplesi.e.
divisions within large
Chapter 11: Standard Costs and
Operating Performance Measures
What are standards?
Quantity expected to be used given a specific planned or actual production
Amount (DM & DL) expected
Costs expected to be incurred
to be used at what cost
Why or when
Chapter 9: Profit Planning
What is budgeting?
Detailed quantitative plan for acquiring and using financial and other
resources to assist management in its planning and control responsibilities.
The focus of Cha