Acct300 Business Accounting: Week 6 Quiz (Winter 2015)

Acct300 Business AccountingWeek 6 Quiz (Winter 2015)
Question 1.1.(TCO 9) To guide cost allocation decisions, the cause-and-effect criterion(Points : 3)may allocate corporate salaries to divisions based on profitsis used less frequently than the other criteriais the primary criterion used in activity-based costingis a difficult criterion on which to obtain agreement
Question 2.2.(TCO 9) Which cost-allocation criterion is superior when making an economic decision?(Points : 3)Fairness-or-equity criterionAbility-to-bear criterionCause-and-effect criterionAll of the above
Question 3.3.(TCO 9) The MOST likely reason for NOT allocating corporate costs to divisions include that(Points : 3)divisions receive no benefits from corporate coststhese costs are not controllable by division managersthese costs are incurred to support division activities, not corporate activitiesdivision resources are already used to attain corporate goals
Question 4.4.(TCO 9)Identifying homogeneous cost pools(Points : 3)requires judgment and should be reevaluated on a regular basisshould include the input of managementshould include a cost-benefit analysisAll of the above
Question 5.5.(TCO 9) The Hassan Corporation has an electric mixer division and an electric lamp division. Of a $20,000,000 bond issuance, the electric mixer division used $14,000,000 and the electric lamp division used $6,000,000for expansion. Interest costs on the bond totaled $1,500,000 for the year. Which corporate costs should be allocated to divisions?(Points : 3)Variable costsFixed costsNeither fixed nor variable costsBoth fixed and variable costs
Question 6.6.(TCO 10) The stage of the capital budgeting process in which a firm obtains funding for the project is the(Points : 3obtain-information stage.implement the decision, evaluate performance, and learn stage.make-decisions-by-choosing-among-alternatives stage.make-predictions stage.
Question 7.7.(TCO 10) Assume your goal in life is to retire with $1 million. How much would you need to save at the end of each year if investment rates average 9% and you have a 15-year work life? (Points : 3)$41,286$37,853$25,554$34,059
Question 8.8.(TCO 10) If the net present value for a project is zero or positive, this means that the (Points : 3)project should be acceptedproject should not be acceptedexpected rate of return is below the required rate of returnBoth 1 and 3 are correct
Question 9.9.(TCO 10) An important advantage of the net-present-value method of capital budgeting over the internal rate-of-return method is(Points : 3)the net present value method is expressed as a percentagethe net present values of individual projects can be added to determine the effects of accepting a combination of projectsthere is no advantageBoth 1and 2 are correct
Question 10.10.(TCO 10) Upper Darby Park Department is considering a new capital investment. The following information is available on the investment. The cost of the machine will be $150,000. The annual cost savings if the new machine is acquired will be $40,000. The machine will have a five-year life, at which time the terminal disposal value is expected to be $20,000. Upper Darby Park Department is assuming no tax consequences. If Upper Darby Park Department has a required rate of return of 10%, which of the following is closest to the present value of the project?(Points : 3)$1,632$150,000$14,060$12,418
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