41. If a company obtains two salable products from the refining of one ore, the refining process should be accounted for as a(n) _. mixed cost process joint process extractive process reduction process 42. Joint cost allocation is useful for . decision making product costing control evaluating managers' performance 43. The definition of a sunk cost is _. a cost that cannot be recovered regardless of what happens a cost that relates to money poured into the ground considered the original cost of an item also known as an opportunity cost 44. The method of pricing by-products/scrap where no value is assigned to these items until they are sold is known as the _. net realizable value at split-off point method sales value at split-off method realized value approach approximated net realizable value at split-off method 45. CVP analysis relies on the assumptions that costs are either strictly fixed or strictly variable. Consistent with these assumptions, as volume decreases total . fixed costs decrease variable costs remain constant costs decrease costs remain constant 46. In CVP analysis, linear functions are assumed for _. contribution margin per unit fixed cost per unit total costs per unit all of the above 47. If a firm's net income does not change as its volume changes, the firm('s) _. must be in the service industry must have no fixed costs sales price must equal $0 sales price must equal its variable costs 48. Break-even analysis assumes over the relevant range that _. total variable costs are linear fixed costs per unit are constant total variable costs are nonlinear total revenue is nonlinear 49. Which of the following qualitative factors favors the buy choice in a make or buy decision for a part? maintaining a long-term relationship with suppliers quality control is critical utilization of idle capacity part is critical to product 50. An ad hoc sales discount is _. an allowance for an inferior quality of marketed goods a discount that an ad hoc committee must decide on brought about by competitive pressures none of the above 51. Measuring the firm's performance against established objectives is part of which of the following functions? Planning Controlling Organizing Staffing 52. Ineffective budgets and/or control systems are characterized by the use of _. budgets as a planning tool only and disregarding them for control purposes budgets for motivation budgets for coordination the budget for communication 53. Which of the following is usually perceived as being the master budget's greatest advantage to management? performance analysis increased communication increased coordination required planning 54. If the chief accountant of a firm has to prepare an operating budget for the coming year, the first budget to be prepared is the _. sales budget cash budget purchases budget capital budget 55. The material purchases budget tells a manager all of the following except the _. quantity of material to be purchased each period quantity of material to be consumed each period cost of material to be purchased each period cash payment for material each period 56. A purchases budget is _. not affected by the firm's policy of granting credit to customers the same thing as a production budget needed only if a firm does not pay for its merchandise in the same period as it is purchased affected by a firm's inventory policy only if the firm purchases on credit 57. If a company has a policy of maintaining an inventory of finished goods at a specified percentage of the next month's budgeted sales, budgeted production for January will exceed budgeted sales for January when budgeted _. February sales exceed budgeted January sales January sales exceed budgeted December sales January sales exceed budgeted February sales December sales exceed budgeted January sales 58. The selling, general, and administrative expense budget is based on the ____ budget. production sales cash purchases 59. Which of the following is not an ordering cost? cost of receiving inventory cost of preparing the order cost of the merchandise ordered cost of storing the inventory 60. A ____ system of production control is paced by product demand. EOQ ABC push pull 61. Striving for flexibility in the number of products that can be produced in a short period of time is characteristic of _. EOQ systems push systems in general JIT pull systems in general 62. Just-in-time (JIT) inventory systems _. result in a greater number of suppliers for each production process focus on a "push" type of production system can only be used with automated production processes result in inventories being either greatly reduced or eliminated 63. Accounting for product costs in a JIT environment _. uses a job order costing system classifies processing costs as raw (or direct) material, direct labor, and overhead is more complex than in other types of manufacturing environments follows process costing procedures whereby costs are accumulated by the process (cell) and attached to units processed for the period 64. In a production cell, _. an individual worker may be expected to operate several different machines, do setups, and perform preventive maintenance on the equipment each worker becomes an expert in the operation of a single piece of equipment machines are arranged so that similar machines are grouped together clear separation is maintained between those workers who operate the machinery and those workers who set up and maintain the machinery 65. Using a single performance evaluation criterion for an investment center . is most effective because a manager can concentrate on a single goal can result in manipulation of the performance measure allows multinational investment centers' performances to be equitably compared is only appropriate if the criterion is non-monetary 66. In evaluating the performance of a profit center manager, the manager . and the sub-unit should be evaluated on the basis of the same costs and revenues should only be evaluated on the basis of variable costs and revenues of the sub-unit should be evaluated on all costs and revenues that are controllable by the manager should be evaluated on all costs and revenues that can be directly traced to the sub-unit 67. Residual income is an example of a ____ performance measurement. long-term short-term qualitative profit center 68. In a balanced scorecard, measurements should be directly linked to _. organizational strategy and values the cost management system current organizational profitability activity-based management concepts 69. On a balanced scorecard, which of the following would be most appropriate to measure customer service? Rapid time-to-market of new products Corporate financial profits On-time delivery Decrease in reworked products 70. On a balanced scorecard, which of the following would be most appropriate to measure innovation? Rapid time-to-market of new products Corporate financial profits On-time delivery Manufacturing cycle efficiency
