Acct434 Advanced Cost Management: Week 3 Cost Behavior Decision Making Quality (Version 2)

Reminder: There are several versions of this week’s questions, please make sure you have reviewed and compared our questions with your questions.

Acct434 Advanced Cost Management
Week 3 Cost Behavior Decision Making Quality (Version 2)

1. (TCO 3) McDevitt Company employs six individuals. They are each paid $30,000 salary per year. How would total costs of personnel be classified? (Points : 3)
Fixed cost within relevant range
Variable cost within relevant range

2. (TCO 3) The cost function y = 1,000 + 5X (Points : 3)
represents a fixed cost.
is a straight line.
has an intercept of five.
has a slope coefficient of 1,000.

3. (TCO 3) Which cost estimation method uses a formal mathematical method to develop cost functions based on past data? (Points : 3)
Quantitative analysis
Industrial engineering
Account analysis

4. (TCO 3) Penny's TV and Appliance Store is a small company that has hired you to perform some management advisory services. The following information pertains to 20X2 operations: Sales (2,000 televisions) $900,000; Cost of goods sold $400,000; Store manager's salary per year $70,000; Operating costs per year $157,000; Advertising and promotion per year $15,000; Commissions (4% of sales) $36,000.
What are the estimated total costs if Penny's expects to sell 3,000 units next year? (Points : 3)

5. (TCO 4) A decision model involves (Points : 3)
a manager's instinct.
only qualitative analyses.
only quantitative analyses.
both quantitative and qualitative analyses.

6. (TCO 4) When using the five-step decision process, which one of the following steps should be done last? (Points : 3)
Implementing the decision
Evaluation and feedback
Choose an alternative
Obtain information

7. (TCO 4) Sunk costs (Points : 3)
have future implications.
are ignored when evaluating alternatives.
are differential.
are relevant.

8. (TCO 4) Northwoods Incorporated manufactures rustic furniture. The cost accounting system estimates manufacturing costs to be $90 per table, consisting of 80% variable costs and 20% fixed costs. The company has surplus capacity available. It is Northwoods' policy to add a 50% markup to full costs. Northwoods is invited to bid on a one-time-only special order to supply 100 rustic tables. What is the lowest price Northwoods should bid on this special order? (Points : 3)

9. (TCO 5) In the theory of constraints, the only direct costs are (Points : 3)
direct material, direct labor, and variable overhead costs.
investment costs.
direct material.
direct material and direct labor.

10. (TCO 5) A machine has been identified as a bottleneck and the source of the constraint for a manufacturing company that has multiple products and multiple machines. One way the company can overcome the bottleneck is (Points : 3)
eliminating idle time at the bottleneck operation. Extra staffing at the bottleneck would be a possibility, particularly if numerous manual type tasks were involved.
concentrate on processing those parts or products that increase throughput contribution, not parts or products that remain in finished goods or spare parts inventories.
solicit the opinions of the factory workers for ideas as to how the design of the manufacturing process can be simplified.
All of the above
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