1

1.Discretionary expenditures: (Points: 2) are usually planned for first are amounts paid for the use of flexible resources are not determined by the organization's level of production increase in amount during periods of greater activity

2.Suppose that DH Manufacturing's management believes that a $1,600 increase in the monthly advertising expense will result in a considerable increase in sales. How much must sales increase in a month to justify this additional expenditure? (Points: 2) 200 units 334 units 500 units None of the above is correct.

3.A flexible budget contains: (Points: 2) cost targets for actual output cost targets for planned output the difference between planned and actual output actual costs for actual output

4.Budgeting does NOT require: (Points: 2) knowledge of the organization's activities specialized expertise in financial management and control knowledge about how activities affect costs the ability to see how the organization's different activities fit together

5.A demand forecast is: (Points: 2) an estimate of sales demand at a specified product price developed primarily to prepare next year's marketing campaign an estimate of market demand based on the amount sold in the previous year a summary of product costs that influence pricing decisions

6.The ________ summarizes planned revenues from each product. (Points: 2) capital spending plan production plan administrative and discretionary spending plan sales plan

7.Aggregate planning: (Points: 2) determines the projected financial statements compares the sales plan with the demand forecast assesses the feasibility of the proposed production plan provides a detailed production schedule for all product lines

8.All of the following are true regarding the labor hiring and training plan EXCEPT that it: (Points: 2) may include retraining plans to redeploy employees to other parts of the organization determines discretionary spending for research and development works backward from the date when personnel are needed can include plans for both expansion and contraction

9.Use the information below to answer the following question(s). The following information pertains to the January operating budget for Casey Corporation.

At the end of January, budgeted accounts receivable is: (Points: 2) $20,000 $40,000 $60,000 None of these is correct.

10.Use the information below to answer the following question(s). The following information pertains to Tiffany Company:

What is the ending cash balance for March? (Points: 2) ($25,000) $3,000 $3,200 $3,800

11.Assume that only the specified parameters change in a sensitivity analysis. The contribution margin ratio increases when: (Points: 2) total capacity-related (fixed) costs increase total capacity-related (fixed) costs decrease flexible (variable) costs per unit increase flexible (variable) costs per unit decrease

12.Use the information below to answer the following question(s). Cathy Manufacturing produces a single product that sells for $80. Variable (flexible) costs per unit equal $32. The company expects the total fixed (capacity-related) costs to be $72,000 for the next month at the projected sales level of 2,000 units. In an attempt to improve performance, management is considering a number of alternative actions. Each situation is to be evaluated separately. Suppose that Cathy Manufacturing's management believes that a $16,000 increase in the monthly advertising expense will result in a considerable increase in sales. How much must sales increase to justify this additional expenditure? (Points: 2) 200 units 334 units 500 units None of these is correct.

13.Use the information below to answer the following question(s). Triglobal Industries, Inc., (TII) developed the following standard costs for direct material and direct labor for one of their major products, the 10-gallon plastic container.

During June, TII produced and sold 5,000 containers using 490 pounds of direct materials at an average cost per pound of $32 and 250 direct labor hours at an average wage of $15.25 per hour. June's direct material quantity variance was: (Points: 2) $980 unfavorable $300 favorable $680 favorable None of these is correct.

14.Use the information below to answer the following question(s). The actual information pertains to the month of August. As part of the budgeting process, Dale's Fencing Company developed the following master budget for August. Dale is in the process of preparing the flexible budget and understanding the results.

The flexible budget will report $________ for the flexible (variable) costs. (Points: 2) $512,000 $600,000 $480,000 $640,000

INFORMATION MISSSING

15.Use the information below to answer the following question(s). An investor wants to have $25,000 in an account at the end of 25 years. At current interest rates, $5,000 needs to be deposited now to reach the goal of $25,000. What is the present value of this investment? (Points: 2) $1,000 $5,000 $25,000 More information is needed to determine the amount.

16.Use the information below to answer the following question(s). A bond with a face value of $10,000 pays $600 in interest every six months for 10 years and a lump sum of $10,000 at the end of the tenth year. The current market requires 10% interest compounded semiannually. What is the present value of the $10,000 payment at the end of the tenth year? (Points: 2) $ 1,486 $ 3,769 $ 3,855 $61,446

17.The accounting rate of return: (Points: 2) considers the time value of money ignores cash outflows after the initial investment incorporates the timing of cash flows utilizes depreciation for the calculation of average income

18.A 16% internal rate of return (IRR) indicates all of the following EXCEPT: (Points: 2) the actual rate of return of all cash inflows and outflows that a 16% discount rate will result in the calculation of a net present value of zero a better indication of acceptable capital projects when there is limited capital than the net present value method an acceptable capital project if the cost of capital is 12%

19.Economic value added: (Points: 2) is most widely used to evaluate new capital investments in practice is similar to net present value but it uses accounting income rather than cash flows in the evaluation determines the actual rate of return of all cash inflows and outflows is similar to the internal rate of return but it corrects for the conservative bias

20.Use the information below to answer the following question(s).During 2005, a franchise-owned restaurant averaged:

The expected cash investment per franchise-owned restaurant opening in the year 2005 was $500,000. Assume the value of the investment decreases to zero over a ten-year period of time. Assuming a 10 % required rate of return, the net present value for one franchise-owned restaurant is: (Points: 2) $7,710 $260,845 ($377,108) ($39,155)INFORMATION MISSSING

_1303412511.unknown

_1303412527.unknown

_1303412535.unknown

_1303412539.unknown

_1303412541.unknown

_1303412542.unknown

_1303412540.unknown

_1303412537.unknown

_1303412538.unknown

_1303412536.unknown

_1303412531.unknown

_1303412533.unknown

_1303412534.unknown

_1303412532.unknown

_1303412529.unknown

_1303412530.unknown

_1303412528.unknown

_1303412519.unknown

_1303412523.unknown

_1303412525.unknown

_1303412526.unknown

_1303412524.unknown

_1303412521.unknown

_1303412522.unknown

_1303412520.unknown

_1303412515.unknown

_1303412517.unknown

_1303412518.unknown

_1303412516.unknown

_1303412513.unknown

_1303412514.unknown

_1303412512.unknown

_1303412495.unknown

_1303412503.unknown

_1303412507.unknown

_1303412509.unknown

_1303412510.unknown

_1303412508.unknown

_1303412505.unknown

_1303412506.unknown

_1303412504.unknown

_1303412499.unknown

_1303412501.unknown

_1303412502.unknown

_1303412500.unknown

_1303412497.unknown

_1303412498.unknown

_1303412496.unknown

_1303412487.unknown

_1303412491.unknown

_1303412493.unknown

_1303412494.unknown

_1303412492.unknown

_1303412489.unknown

_1303412490.unknown

_1303412488.unknown

_1303412479.unknown

_1303412483.unknown

_1303412485.unknown

_1303412486.unknown

_1303412484.unknown

_1303412481.unknown

_1303412482.unknown

_1303412480.unknown

_1303412475.unknown

_1303412477.unknown

_1303412478.unknown

_1303412476.unknown

_1303412471.unknown

_1303412473.unknown

_1303412474.unknown

_1303412472.unknown

_1303412467.unknown

_1303412469.unknown

_1303412470.unknown

_1303412468.unknown

_1303412465.unknown

_1303412466.unknown

_1303412464.unknown

_1303412463.unknown