ACC 241 Exam 3 ASU Dallmus Questions and Answers.

ACC 241 Exam 3 ASU Dallmus Questions
and Answers
Question 1
How to analyze dropping a product line decision?
Correct Answer
A company should drop the product line only if avoidable cost savings are greater
than the contribution margin lost.



Question 2
Payback Period with EQUAL Annual Net Cash Inflows Forumla
Correct Answer
initial investment / expected annual net cash inflow



Question 3
Budgeted Income Statement
Correct Answer
Prepared by combining information from all operating budgets



Question 4
Sell as is or process further decisions
Correct Answer
For sell as is or process further decisions, if the incremental revenue from
processing further exceeds the incremental cost of processing further, then the
correct decision is to process further.




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, Question 5
cost plus
Correct Answer
A contract where payment is for material and labor, with a profit factor added.
COST + MARKUP ON THE COST



Question 6
profit center
Correct Answer
separate company unit responsible for its own costs and profits



Question 7
ROI Formula
Correct Answer
Operating Income / Total assets



Question 8
unavoidable costs
Correct Answer
a cost that exists under all decision alternatives
NEVER RELEVANT
ex: some fixed costs



Question 9
Benefits of Budgeting
Correct Answer
1. Forces managers to plan
2. Facilitates coordination and communication within the business
3. Helps motivate personnel throughout organization to meet planned objectives
4. Provides a standard for performance evaluation




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