BF 180 Quiz 2 Review

The management control system includes:

• Delegation of Decision Rights

• Commitments

• Pricing Decisions

• Capital Budgeting

Decentralization:

• takes advantage of local knowledge

• delays response to local problems

• reduces dysfunctional decision making.

• gives top management more control.

Jim is preparing the production budget for his company. He estimates that 21,000 units have to be produced to meet the sales forecast of 18,000 units and the desired ending inventory of 4,000 units. How many units should be in the beginning inventory?

• 750 units

• 800 units

• 1000 units

• 1200 units

Which of the following method(s) can be used to extract sales forecast?

• Delphi technique

• Trend Analysis

• Econometric models

• All of Above

Interest cost associated with a bond issue to support capital expansion is an example of:

• unit-level costs.

• batch-level costs.

• product-sustaining costs.

• facility-sustaining costs.

A Death Spiral:

•    happens when managers try to set higher prices to recover increasing reported costs.

• occurs when capacity is reduced.

•   may happen when the market share is gaining

•   has to do with costs other than overhead.

In a two-stage cost allocation system:

• the first stage involves assigning overhead costs to cost pools.

• the cost pools may be departments.

• each cost pool requires an allocation rate.

• All of the above.

Which level of costs in the cost hierarchy do costs of maintaining specifications or designs refer to? 

• Facility Related Costs

• Butch Related Costs

• Product Related Costs

• Volume Related Costs

The level of a manufacturer's production that would be attained if all of its equipment and operations performed continuously at their optimum efficiency without breaks, normal maintenance and downtime is called what? 

• Practical Capacity

• Theorical Capacity

• Data Knowledge

• Actual Activity

Sweet Co. needed an employee to deliver orders. The company’s management considered two options: hiring a temporary employee and paying him $3 for every order delivered or having a permanent employee who would be paid $10 per hour. Sweet Co. has chosen the second option and hired an employee who is supposed to work 8 hours per day and whose capacity is to deliver 20 orders per day. On Wednesday, the new employee delivered 18 orders. Which of the following is unused resource capacity? 

• $8.00

• $25.00

• $5.00

• $10.00