ACC 241 EXAM 3 ASU DALLMUS EXAMS
WITH CORRECT ANSWERS /GRADED A+
1. relevant costs - ANSWER-Relevant costs are costs that differ
between alternatives.When making the decision, the company
should consider relevant costs.
Relevant costs are also called differential costs, incremental
costs, or avoidable costs.
2. Analyzing special orders - ANSWER--Whether excess capacity
exists
-Whether the special order will affect regular sales in the long
run
-Whether the special price will be high enough to cover
incremental costs of filling the order
3. product pricing - ANSWER-When an item first comes on the
market it is generally higher than when it's been on the
market for a while
(cost plus, target costing)
4. How to analyze dropping a product line decision? - ANSWER-A
company should drop the product line only if avoidable cost
savings are greater than the contribution margin lost.
5. Make versus Buy decisions - ANSWER-Decisions involve
deciding whether to perform a particular function in-house
versus buying it from and outside supplier
- If the incremental costs of making exceed the
incremental costs of buying, then the company should
buy it.
, 6. Sell as is or process further decisions - 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.
7. master budget - ANSWER-A comprehensive financial plan
consisting of various individual budgets; done at the
beginning of a period
8. Benefits of Budgeting - 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
9. Types of responsibility centers - ANSWER-cost center, revenue
center, profit center, investment center
10. cost center - ANSWER-a business segment whose
manager has control over cost but has no control over
revenue or investments in operating assets
11. revenue center - ANSWER-a responsibility center in
which managers are responsible for generating revenue
12. profit center - ANSWER-separate company unit
responsible for its own costs and profits
13. investment center - ANSWER-a division that generates
revenues, incurs costs, and controls the investment of
available funds.
WITH CORRECT ANSWERS /GRADED A+
1. relevant costs - ANSWER-Relevant costs are costs that differ
between alternatives.When making the decision, the company
should consider relevant costs.
Relevant costs are also called differential costs, incremental
costs, or avoidable costs.
2. Analyzing special orders - ANSWER--Whether excess capacity
exists
-Whether the special order will affect regular sales in the long
run
-Whether the special price will be high enough to cover
incremental costs of filling the order
3. product pricing - ANSWER-When an item first comes on the
market it is generally higher than when it's been on the
market for a while
(cost plus, target costing)
4. How to analyze dropping a product line decision? - ANSWER-A
company should drop the product line only if avoidable cost
savings are greater than the contribution margin lost.
5. Make versus Buy decisions - ANSWER-Decisions involve
deciding whether to perform a particular function in-house
versus buying it from and outside supplier
- If the incremental costs of making exceed the
incremental costs of buying, then the company should
buy it.
, 6. Sell as is or process further decisions - 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.
7. master budget - ANSWER-A comprehensive financial plan
consisting of various individual budgets; done at the
beginning of a period
8. Benefits of Budgeting - 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
9. Types of responsibility centers - ANSWER-cost center, revenue
center, profit center, investment center
10. cost center - ANSWER-a business segment whose
manager has control over cost but has no control over
revenue or investments in operating assets
11. revenue center - ANSWER-a responsibility center in
which managers are responsible for generating revenue
12. profit center - ANSWER-separate company unit
responsible for its own costs and profits
13. investment center - ANSWER-a division that generates
revenues, incurs costs, and controls the investment of
available funds.
