Midterm Bonus Quizzer

Absorption costing differs from variable costing in that

• companies using absorption costing have lower fixed costs

• absorption costing inventories are more correctly valued

• standards can be used with absorption costing, but not with variable costing

• production influences income under absorption costing, but not under variable costing

Among the costs relevant to a make-or-buy decision, include variable manufacturing costs as well as

• unavoidable costs

• plant depreciation

• avoidable fixed cost

• real estate taxes

Conversion cycle converts economic events into financial transactions, records in accounting records, and distributes essential financial information to operations.

• True

• False

The following is a pitfall in balance scorecard, except:

• Do not assume

• Do not use subjective only

• Do not use too many measures

• None of the above

The following shows the advantages of decentralization, except:

• Sharpens the focus of subunit managers to be more flexible and nimbler that able to adapt itself quickly to a fast-opening market opportunity

• Decisions are best made

• Cost to gather information is minimal

• None of the above

One of the management functions in management reporting system sets goals, objectives, scopes, structures and management philosophy.

• Strategic planning decision

• Tactical planning decision

• Management control decision

• None of the above

Which cost management for product life cycle delegates decision-making authority throughout the organization?

• Life cycle costing

• Target costing

• Theory of constraints

• None of the above

The following describes the risk associated with ERP implementation, except:

• Willingness and ability to undertake a change of magnitude

• System failure when ERP does not support one or more important business process

• Promise of experienced professionals but deliver incompetent trainees

• None of the above

Which of the configurations supports mission-critical tasks through simple queries of operational databases?

• Server configurations

• OLTP servers

• OLAP servers

• None of the above

During the most recent year, ABC Company, had a profit of P90,000 using absorption costing and P84,000 using variable costing. The fixed overhead application rate was P6 per unit. There were no beginning inventories recorded. If 22,000 units were produced last year, then sales for the last year were

• 15,000 units

• 21,000 units

• 23,000 units

• None of the above