ACG 3341 Final (FAU Mark Kohlbeck) Questions With
Complete Solutions
________ is the level of capacity based on producing at full
efficiency all the time. Correct Answers Theoretical capacity
A company decided to replace an old machine with a new
machine. Which of the following is considered a relevant cost?
Correct Answers the setup cost of the new equipment
A company would use multiple cost−allocation bases ________.
Correct Answers if managers believed the benefits exceeded the
additional costs of that costing system
A cost system determines the cost of a cost object by ________.
Correct Answers accumulating and then assigning costs
A decision tree is simply a set of cascading ________. Correct
Answers questions
A favorable price variance for direct manufacturing labor might
indicate that ________. Correct Answers underskilled
employees are being hired
A favorable variance indicates that ________. Correct Answers
actual revenues exceed budgeted revenues
A learning curve is a function ________. Correct Answers that
measures the decline in labor−hours per unit due to workers
becoming better at a job
, A limitation of using past performance as a basis for judging
actual results is that ________. Correct Answers future
conditions can be different from past conditions
A single indirect−cost rate distorts product costs because
________. Correct Answers there is an assumption that all
support activities affect all products in a uniform way
All else being equal, an increase in advertising expenditures will
________. Correct Answers reduce operating income
An unfavorable flexible-budget variance for variable costs may
be the result of ________. Correct Answers using more input
quantities than were budgeted
An unfavorable production-volume variance ________. Correct
Answers measures the amount of extra fixed costs planned for
but not used
As a discounted cash flow method does not report good
operating income results in the project's early years, managers
are tempted to not use discounted cash flow methods even
though the decisions based on them would be in the best
interests of the company as a whole over the long run. Correct
Answers True
At a plant where a union agreement sets annual salaries and
conditions, annual labor costs usually Correct Answers are
considered a fixed cost
Complete Solutions
________ is the level of capacity based on producing at full
efficiency all the time. Correct Answers Theoretical capacity
A company decided to replace an old machine with a new
machine. Which of the following is considered a relevant cost?
Correct Answers the setup cost of the new equipment
A company would use multiple cost−allocation bases ________.
Correct Answers if managers believed the benefits exceeded the
additional costs of that costing system
A cost system determines the cost of a cost object by ________.
Correct Answers accumulating and then assigning costs
A decision tree is simply a set of cascading ________. Correct
Answers questions
A favorable price variance for direct manufacturing labor might
indicate that ________. Correct Answers underskilled
employees are being hired
A favorable variance indicates that ________. Correct Answers
actual revenues exceed budgeted revenues
A learning curve is a function ________. Correct Answers that
measures the decline in labor−hours per unit due to workers
becoming better at a job
, A limitation of using past performance as a basis for judging
actual results is that ________. Correct Answers future
conditions can be different from past conditions
A single indirect−cost rate distorts product costs because
________. Correct Answers there is an assumption that all
support activities affect all products in a uniform way
All else being equal, an increase in advertising expenditures will
________. Correct Answers reduce operating income
An unfavorable flexible-budget variance for variable costs may
be the result of ________. Correct Answers using more input
quantities than were budgeted
An unfavorable production-volume variance ________. Correct
Answers measures the amount of extra fixed costs planned for
but not used
As a discounted cash flow method does not report good
operating income results in the project's early years, managers
are tempted to not use discounted cash flow methods even
though the decisions based on them would be in the best
interests of the company as a whole over the long run. Correct
Answers True
At a plant where a union agreement sets annual salaries and
conditions, annual labor costs usually Correct Answers are
considered a fixed cost
