Accounting 201 Exam Questions
with 100% Solved Answers
To evaluate the financial performance of an investment center, a business needs key
performance indicators that measure ____________. - Answer-operating income and
the use of the center's assets
Which of the following is an expanded form of calculating return on investment? -
Answer-Profit margin ratio x Asset turnover ratio
Residual income indicates how ____________. - Answer-much extra operating income
a division generates above the minimum acceptable level
Opportunity cost is the benefit ____________. - Answer-given up by choosing an
alternate course of action
Which of the following costs are irrelevant to business decisions? - Answer-Sunk cost
In deciding whether to drop its electronics product line, Smith Company should consider
- Answer-The costs it could save by dropping the product line.
How dropping the electronics product line would affect sales of its other products
The revenues it would lose form dropping the product line
In deciding which product lines to emphasize when a production constraint exists, the
company should focus on the product line that has the highest - Answer-contribution
margin per unit of the constriaint
When making outsourcing decisions, which of the following is true? - Answer-The
variable cost of producing the product in-house is relevant
The company is a price-taker when __________. - Answer-it operates in a highly
competitive market
The opportunity cost is ____________. - Answer-the benefit given up by choosing an
alternative course of action
with 100% Solved Answers
To evaluate the financial performance of an investment center, a business needs key
performance indicators that measure ____________. - Answer-operating income and
the use of the center's assets
Which of the following is an expanded form of calculating return on investment? -
Answer-Profit margin ratio x Asset turnover ratio
Residual income indicates how ____________. - Answer-much extra operating income
a division generates above the minimum acceptable level
Opportunity cost is the benefit ____________. - Answer-given up by choosing an
alternate course of action
Which of the following costs are irrelevant to business decisions? - Answer-Sunk cost
In deciding whether to drop its electronics product line, Smith Company should consider
- Answer-The costs it could save by dropping the product line.
How dropping the electronics product line would affect sales of its other products
The revenues it would lose form dropping the product line
In deciding which product lines to emphasize when a production constraint exists, the
company should focus on the product line that has the highest - Answer-contribution
margin per unit of the constriaint
When making outsourcing decisions, which of the following is true? - Answer-The
variable cost of producing the product in-house is relevant
The company is a price-taker when __________. - Answer-it operates in a highly
competitive market
The opportunity cost is ____________. - Answer-the benefit given up by choosing an
alternative course of action
