Question 1

Calvert Company has made the following information available for the month of March:
  Assume that Calvert Company hires part-time employees for production of these units.
Compute the price and efficiency variances.

Accepted Answer

The answer of Calvert Company has made the following information...

Question 2

When can a discretionary fixed cost be subjected to control methods that are used for engineered costs?

Accepted Answer

When a discretionary cost is repetitive ...

Question 3

If an actual discretionary cost is exactly equal to the budgeted level of that cost,which of the following statements is true?

Accepted Answer

A)  Funds were appropriately spent.
B)  The discretionary activity was efficient.
C)  The discretionary activity was effective.
D)  None of the above.E) All of the above
F) A) and B)

Question 4

Engineered costs may be either variable or fixed.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following strategies is used to deal with uncertainty related to price risk?

Accepted Answer

A)  Statistical analysis
B)  Cost restructuring
C)  Hedging
D)  InsuranceE) B) and C)
F) All of the above

Question 6

A coefficient of determination has a value between 0 and +1.

Accepted Answer

A) True 
 B)False

Question 7

The benefits of discretionary costs are usually measurable in monetary terms.

Accepted Answer

A) True 
 B)False

Question 8

A ratio of outputs to inputs is a(n)

Accepted Answer

A)  effectiveness measure.
B)  efficiency measure.
C)  qualitative measure.
D)  cost reduction measure.E) B) and C)
F) All of the above

Question 9

A committed fixed cost can

Accepted Answer

A)  never be eliminated.
B)  be eliminated in the short term and in the long term.
C)  be eliminated in the long term but not in the short term.
D)  be eliminated in the short term but not in the long term.E) All of the above
F) C) and D)

Question 10

Discretionary activities in an organization are determined based on

Accepted Answer

A)  organizational policies and managerial preferences.
B)  the budgeted amount from the prior period.
C)  the level of long-term investment.
D)  an organization's internal control.E) A) and D)
F) A) and C)

Question 11

A reasonable measure of efficiency relies on

Accepted Answer

A)  qualitative measures of inputs and outputs.
B)  a match of inputs in one period with outputs in subsequent periods.
C)  a causal relationship between inputs and outputs.
D)  a ratio of planned output to actual output.E) C) and D)
F) B) and C)

Question 12

What are the five steps involved in implementing a cost control system?

Accepted Answer

The five steps are as follows: 1.Underst...

Question 13

Lowering existing costs of producing a good or service is referred to as ___________________.

Accepted Answer

The answer of Lowering existing costs of producing a good...

Question 14

A cost that must be reviewed periodically to determine if it is still appropriate and necessary is referred to as a __________________________________________.

Accepted Answer

The answer of A cost that must be reviewed periodically...

Question 15

Arnold Company has provided the following information for the month of November:
  Assume that Arnold Company hires full-time employees who are paid a total of $6,500 per month.
Compute the spending and volume variances.

Accepted Answer

The answer of Arnold Company has provided the following information...

Question 16

Supply chain management can reduce the processing time for an organization to obtain raw materials.

Accepted Answer

A) True 
 B)False

Question 17

Most discretionary costs relate to

Accepted Answer

A)  plant and equipment acquisitions.
B)  long-term investments.
C)  basic personnel costs.
D)  service activities.E) None of the above
F) A) and D)

Question 18

An organization's bond rating may cause the organization to hold larger levels of cash than are necessary for operations.

Accepted Answer

A) True 
 B)False

Question 19

As the economy becomes more and more depressed,a company's management decides to slash spending on research and development.What is the likely effect of this action on net income? Net income will be

Accepted Answer

A)  higher this period and lower in future periods.
B)  higher this period and higher in future periods.
C)  lower this period and higher in future periods.
D)  lower this period and lower in future periods.E) B) and D)
F) A) and D)

Question 20

The term "committed costs" refers to costs that

Accepted Answer

A)  management decides to incur in the current period to enable the company to achieve objectives other than the filling of orders placed by customers.
B)  are likely to respond to the amount of attention devoted to them by a specified manager.
C)  are governed mainly by past decisions that established the present levels of operating and organizational capacity and that only change slowly in response to small changes in capacity.
D)  fluctuate in total in response to small changes in the rate of utilization of capacity.E) A) and B)
F) All of the above

Exam 16: Managing Costs and Uncertainty

A cost that must be reviewed periodically to determine if it is still appropriate and necessary is referred to as a __________________________________________.

Correct AnswerverifiedShow Answer

Supply chain management can reduce the processing time for an organization to obtain raw materials.

Correct AnswerverifiedShow Answer

A coefficient of determination has a value between 0 and +1.

Correct AnswerverifiedShow Answer

Arnold Company has provided the following information for the month of November: Assume that Arnold Company hires full-time employees who are paid a total of $6,500 per month. Compute the spending and volume variances.

Correct AnswerverifiedShow Answer

When can a discretionary fixed cost be subjected to control methods that are used for engineered costs?

Correct AnswerverifiedWhen a discretionary cost is repetitive ...View AnswerShow Answer

An organization's bond rating may cause the organization to hold larger levels of cash than are necessary for operations.

Correct AnswerverifiedShow Answer

A reasonable measure of efficiency relies on

Correct AnswerverifiedShow Answer

What are the five steps involved in implementing a cost control system?

Correct AnswerverifiedThe five steps are as follows: 1.Underst...View AnswerShow Answer

A ratio of outputs to inputs is a(n)

Correct AnswerverifiedShow Answer

Calvert Company has made the following information available for the month of March: Assume that Calvert Company hires part-time employees for production of these units. Compute the price and efficiency variances.

Correct AnswerverifiedShow Answer

The term "committed costs" refers to costs that

Correct AnswerverifiedShow Answer

Engineered costs may be either variable or fixed.

Correct AnswerverifiedShow Answer

Most discretionary costs relate to

Correct AnswerverifiedShow Answer

A committed fixed cost can

Correct AnswerverifiedShow Answer

Lowering existing costs of producing a good or service is referred to as ___________________.

Correct AnswerverifiedShow Answer

The benefits of discretionary costs are usually measurable in monetary terms.

Correct AnswerverifiedShow Answer

Which of the following strategies is used to deal with uncertainty related to price risk?

Correct AnswerverifiedShow Answer

As the economy becomes more and more depressed,a company's management decides to slash spending on research and development.What is the likely effect of this action on net income? Net income will be

Correct AnswerverifiedShow Answer

Discretionary activities in an organization are determined based on

Correct AnswerverifiedShow Answer

If an actual discretionary cost is exactly equal to the budgeted level of that cost,which of the following statements is true?

Correct AnswerverifiedShow Answer

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When a discretionary cost is repetitive ...
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The five steps are as follows: 1.Underst...
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