str 581 final


66) Which decision will involve no incremental revenues?

A. Accept a special order
B. Make or buy decision
C. Drop a product line
D. Additional processing decision
               

67) Transfer-pricing systems exist to _____.

A. encourage managers to purchase goods and services internally
B. maximize worldwide taxes, duties, and tariffs
C. evaluate segment performance
D. all of these answers are correct
               

68) Undertaker Corporation has a joint process that produces three products: P, G, and A. Each product may be sold at split-off or processed further and then sold. Joint processing costs for a year amount to $25,000. Other relevant data are as follows:
                Product                Sales Value at Split-off Processing Costs after Split-off Sales Value at Completion
P             $62,000 $5,000   $88,000
G             12,500   6,500     19,000
A             9,400     5,000     12,000
               

Product G _____.

A. should be processed further to increase profits by $19,000.
B. an be processed further or sold at split off; there is no difference in profit.
C. should be sold at split off since processing further would only reduce profits by $6,500.
D. should be processed further to increase profits by $6,500.
               

69) It costs Garner Company $12 of variable and $5 of fixed costs to produce one bathroom scale which normally sells for $35. A foreign wholesaler offers to purchase 2,000 scales at $15 each. Garner would incur special shipping costs of $1 per scale if the order were accepted. Garner has sufficient unused capacity to produce the 2,000 scales. If the special order is accepted, what will be the effect on net income?

A. $6,000 decrease
B. $30,000 increase
C. $4,000 decrease
D. $4,000 increase
               

70) A _____ gives the expected sales under a given set of conditions.

A. budget forecast
B. sales forecast
C. sales budget
D. sales prediction
               

71) The financing section of a cash budget is needed if there is a cash deficiency or if the ending cash balance is less than:

A. the amount needed to avoid a service charge at the bank.
B. the industry average.
C. management's minimum required balance.
D. the prior years.
               

72) Beginning cash balance plus total receipts

A. equals total available cash.
B. is the excess of available cash over disbursements.
C. must equal total disbursements.
D. equals ending cash balance.
               

73) Which of the following does not appear as a separate section on the cash budget?

A. Capital expenditures
B. Financing
C. Cash disbursements
D. Cash receipts

74) A variable cost is a cost that

A. varies in total in proportion to changes in the level of activity.
B. may or may not be incurred, depending on management's discretion.
C. occurs at various times during the year.
D. varies per unit at every level of activity.
               

75) At the break-even point of 2,000 units, variable costs are $55,000, and fixed costs are $32,000. How much is the selling price per unit?

A. $16.00.
B. Not enough information
C. $11.50.
D. $43.50.
               

76) At the break-even point of 2,500 units, variable costs are $55,000, and fixed costs are $32,000. How much is the selling price per unit?

A. $12.80.
B. $22.00.
C. $9.20.
D. $34.80.
               

77) How much sales are required to earn a target income of $80,000 if total fixed costs are $100,000 and the contribution margin ratio is 40%?

A. $450,000.
B. $200,000.
C. $330,000.
D. $300,000.

78) There is no difference between variable-costing and absorption-costing income if there is no_____.

A. change in inventory level
B. ending inventory
C. variable overhead cost
D. beginning inventory
               

79) Identify which of the following statements about "perfection standards" is true.

A. They usually result in unfavorable variances.
B. They are expressions of the most efficient performance possible.
C. All of these answers are correct
D. It is generally believed that they have a negative influence on employee morale.
               

80) The first step in activity-based costing is to

A. assign manufacturing overhead costs for each activity cost pool to products.
B. compute the activity-based overhead rate per cost driver.
C. identify and classify the major activities involved in the manufacture of specific products.
D. identify the cost driver that has a strong correlation to the activity cost pool.
               



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