Posted: April 19th, 2016
1. When an income statement shows data for segments of the organization, and data for each segment are added together to get totals for the whole organization:
A. all expenses should be allocated to the segments.
B. common fixed expenses should be allocated to the segments.
C. only direct revenues and direct expenses should be assigned to segments.
D. direct fixed expenses should be subtracted as one amount in the “total” column.
3. Which of the following qualitative factors favors the buy option in the make or buy decision?
A. Production scheduling.
B. Utilization of idle capacity.
C. Ability to control quality.
D. Technical expertise of supplier.
4. A favorable materials quantity variance would occur if:
A. more material is purchased than is used.
B. actual pounds of materials used were less than the standard pounds allowed.
C. actual labor hours used was greater than the standard labor hours allowed.
D. actual pounds of materials used was greater than the standard pounds allowed.
5. The raw materials budgeted to be purchased for the period is equal to:
A. ending inventory + raw material used -beginning inventory.
B. ending inventory + ending inventory -raw material used.
C. beginning inventory -ending inventory + raw material used.
D. beginning inventory + raw material used -ending inventory.
6. The cost of capital used in the capital budgeting analytical process is primarily a function of:
C. the cost of acquiring the funds that will be invested.
D. the discount rate.
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