ACCOUNTING 2 FINAL UPDATED ACTUAL
QUESTIONS AND CORRECT ANSWERS
Question:
1. Which of the following is the second concept used in
business decision making?
Answer:
Distinguish between relevant and irrelevant costs and benefits.
Question:
2. Costs that have been incurred and cannot be eliminated
regardless of the alternative chosen are ________.
Answer:
sunk costs
Question:
3. High Roller Inc. is trying to decide whether to buy a
private jet or to lease one. The finder's fee is incurred
only if the private jet is bought. The finder's fee is what
type of cost for this decision?
Answer:
relevant cost
Question:
4. When analyzing two alternatives which is NOT true?
Answer:
Isolating relevant costs gives a different answer than using all costs.
Question:
5. The involvement by a company in more than one of the
activities in the entire value chain from development
through production, distribution, sales, and after-sales
service is called ________.
Answer:
vertical integration
Question:
6. The potential benefit that is given up when one
alternative is selected over another is called ________
Answer:
opportunity cost
, Question:
7. Which of the following types of decisions involves
deciding whether to accept or reject an order that is
outside the scope of normal sales?
Answer:
special order
Question:
8. Prairie, Inc. produces a single product. It has an annual
capacity of 10,000 units, but currently uses only 80% of it.
Each unit is sold for $50 and requires direct material
worth $30 and direct labor worth $5. Manufacturing
overhead cost is $10 per unit of which 70% is variable.
What is Prairie's total incremental cost incurred to
produce each unit?
Answer:
$42
Question:
9. When a company does not have enough capacity to
produce all of the products and sales volume demanded
by their customers, this leads to ________.
Answer:
volume tradeoff decisions
Question:
10. how do you find the contribution margin per unit of a
constrained resource?
Answer:
contribution per unit / labor needed to produce one unit
Question:
11. Which of the following does NOT describe a manager
increasing the capacity of the bottleneck?
Answer:
tightening the constraint
Question:
12. All of the following are relevant to the sell or process
further decision except __
Answer:
joint costs incurred before the split off point
QUESTIONS AND CORRECT ANSWERS
Question:
1. Which of the following is the second concept used in
business decision making?
Answer:
Distinguish between relevant and irrelevant costs and benefits.
Question:
2. Costs that have been incurred and cannot be eliminated
regardless of the alternative chosen are ________.
Answer:
sunk costs
Question:
3. High Roller Inc. is trying to decide whether to buy a
private jet or to lease one. The finder's fee is incurred
only if the private jet is bought. The finder's fee is what
type of cost for this decision?
Answer:
relevant cost
Question:
4. When analyzing two alternatives which is NOT true?
Answer:
Isolating relevant costs gives a different answer than using all costs.
Question:
5. The involvement by a company in more than one of the
activities in the entire value chain from development
through production, distribution, sales, and after-sales
service is called ________.
Answer:
vertical integration
Question:
6. The potential benefit that is given up when one
alternative is selected over another is called ________
Answer:
opportunity cost
, Question:
7. Which of the following types of decisions involves
deciding whether to accept or reject an order that is
outside the scope of normal sales?
Answer:
special order
Question:
8. Prairie, Inc. produces a single product. It has an annual
capacity of 10,000 units, but currently uses only 80% of it.
Each unit is sold for $50 and requires direct material
worth $30 and direct labor worth $5. Manufacturing
overhead cost is $10 per unit of which 70% is variable.
What is Prairie's total incremental cost incurred to
produce each unit?
Answer:
$42
Question:
9. When a company does not have enough capacity to
produce all of the products and sales volume demanded
by their customers, this leads to ________.
Answer:
volume tradeoff decisions
Question:
10. how do you find the contribution margin per unit of a
constrained resource?
Answer:
contribution per unit / labor needed to produce one unit
Question:
11. Which of the following does NOT describe a manager
increasing the capacity of the bottleneck?
Answer:
tightening the constraint
Question:
12. All of the following are relevant to the sell or process
further decision except __
Answer:
joint costs incurred before the split off point
