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F5 (169-262)

Total questions: 94

Worksheet time: 47mins

Name
Class
Date
1.

169. Activity-based costing helps in identifying non-value-adding activities in a business process

a)

TRUE

b)

FALSE

2.

170. Overhead allocation in activity-based costing is done based on the number of employees in a department.

a)

TRUE

b)

FALSE

3.

171. In lifecycle costing, all costs associated with a product are tracked throughout its life, from inception to disposal.

a)

TRUE

b)

FALSE

4.

172. A target costing gap occurs when the actual cost of a product is lower than the target cost.

a)

TRUE

b)

FALSE

5.

173. In target costing, eliminating waste from production processes is one way to reduce costs.

a)

TRUE

b)

FALSE

6.

174. Material flow cost accounting (MFCA) distinguishes between usable outputs and waste.

a)

TRUE

b)

FALSE

7.

175. The break-even sales revenue formula is: Total fixed costs ÷ Contribution margin ratio.

a)

TRUE

b)

FALSE

8.

176. Break-even analysis is only useful for non-profit organizations.

a)

TRUE

b)

FALSE

9.

177. If a limiting factor exists, products with higher variable costs should always be prioritized.

a)

TRUE

b)

FALSE

10.

178. Price elasticity of demand is always greater than one for luxury goods.

a)

TRUE

b)

FALSE

11.

179. Full cost-plus pricing ignores market conditions when determining the selling price.

a)

TRUE

b)

FALSE

12.

180. Joint costs are always relevant when deciding whether to process a product further.

a)

TRUE

b)

FALSE

13.

181. A skimming pricing strategy can lead to a high initial profit margin.

a)

TRUE

b)

FALSE

14.

182. Cost-plus pricing is commonly used in industries with volatile demand.

a)

TRUE

b)

FALSE

15.

183. In budgeting, co-ordination ensures that all departments align with the organization’s overall goals.

a)

TRUE

b)

FALSE

16.

184. Zero-based budgeting assumes that all expenses need to be justified each year, starting from zero.

a)

TRUE

b)

FALSE

17.

185. Incremental budgeting considers efficiency improvements automatically in its approach.

a)

TRUE

b)

FALSE

18.

186. Rolling budgets provide greater flexibility in dynamic business environments.

a)

TRUE

b)

FALSE

19.

187. The learning curve effect assumes that labor efficiency improves with experience.

a)

TRUE

b)

FALSE

20.

188. Standard costing relies heavily on historical data to set benchmarks.

a)

TRUE

b)

FALSE

21.

189. A variance always indicates that actual performance deviates from the standard plan.

a)

TRUE

b)

FALSE

22.

190. Selling price variance measures the difference between the actual and expected sales price.

a)

TRUE

b)

FALSE

23.

191. A favorable variance always indicates better performance.

a)

TRUE

b)

FALSE

24.

192. If material wastage increases, it will lead to an adverse material usage variance.

a)

TRUE

b)

FALSE

25.

193. Poor-quality materials can result in an adverse material variance.

a)

TRUE

b)

FALSE

26.

194. Idle time is a common issue in just-in-time (JIT) manufacturing systems.

a)

TRUE

b)

FALSE

27.

195. Better equipment maintenance can lead to favorable labor efficiency variances.

a)

TRUE

b)

FALSE

28.

196. Sales mix variance arises only when multiple products are sold.

a)

TRUE

b)

FALSE

29.

197. A planning variance often indicates unrealistic initial budgeting.

a)

TRUE

b)

FALSE

30.

198. Operational variances measure the actual performance of operations against standard benchmarks.

a)

TRUE

b)

FALSE

31.

199. Total quality management (TQM) emphasizes continuous improvement over maintaining standard costs.

a)

TRUE

b)

FALSE

32.

200. Variance analysis helps in identifying both favorable and adverse trends in cost and revenue performance.

a)

TRUE

b)

FALSE

33.

201. Financial performance measures include profit margins, return on investment, and cash flow ratios.

a)

TRUE

b)

FALSE

34.

202. A divisional manager’s primary responsibility is to maximize the financial performance of their division.

a)

TRUE

b)

FALSE

35.

203. Managers of cost centers are responsible for revenue generation.

a)

FALSE

b)

TRUE

36.

204. A balanced scorecard integrates non-financial measures with financial measures for comprehensive evaluation.

a)

TRUE

b)

FALSE

37.

205. Innovation and learning are not included in the balanced scorecard framework.

a)

TRUE

b)

FALSE

38.

206. Performance indicators should consider both short-term and long-term objectives.

a)

TRUE

b)

FALSE

39.

207. Marginal costing only considers variable costs for decision-making.

a)

TRUE

b)

FALSE

40.

208. Fixed costs remain constant in total, regardless of the level of activity.

a)

TRUE

b)

FALSE

41.

209. Variable costs per unit change as the level of activity changes.

a)

TRUE

b)

FALSE

42.

210. Semi-variable costs contain both fixed and variable components.

a)

TRUE

b)

FALSE

43.

211. Contribution margin is the difference between sales revenue and fixed costs.

a)

TRUE

b)

FALSE

44.

212. In make-or-buy decisions, fixed costs are always considered relevant.

a)

TRUE

b)

FALSE

45.

213. The primary goal of outsourcing is to achieve cost savings and operational efficiency.

a)

TRUE

b)

FALSE

46.

214. Outsourcing can reduce management’s control over product quality.

a)

TRUE

b)

FALSE

47.

215. Budget variances can indicate either inefficiencies or unexpected changes in business conditions.

a)

TRUE

b)

FALSE

48.

216. Adverse labor efficiency variance suggests that less time was spent on production than expected.

a)

TRUE

b)

FALSE

49.
Overproduction often leads to adverse material usage variances.
a)
True
b)
False
50.
In TQM, allowances for defects contradict the philosophy of “zero defects.”
a)
True
b)
False
51.
Profit centers are accountable for both revenues and costs but not investments.
a)
True
b)
False
52.
Investment centers focus on return on investment and asset utilization.
a)
True
b)
False
53.
Overhead absorption rates are determined based on estimated activity levels.
a)
True
b)
False
54.
Under-absorbed overhead occurs when actual overhead costs exceed absorbed overhead costs.
a)
True
b)
False
55.
Marginal costing ignores fixed costs in profit planning.
a)
True
b)
False
56.
Standard costing provides a benchmark for evaluating actual performance.
a)
True
b)
False
57.
Idle time is always considered a controllable cost.
a)
False
b)
True
58.
Higher inventory levels often lead to increased holding costs.
a)
True
b)
False
59.
Throughput accounting focuses on maximizing output and minimizing inventory.
a)
True
b)
False
60.
Bottleneck resources determine the capacity of the entire production process.
a)
True
b)
False
61.
A key feature of just-in-time (JIT) systems is minimizing work-in-progress inventory.
a)
True
b)
False
62.
Value-added activities in ABC are those that directly contribute to customer satisfaction.
a)
True
b)
False
63.
In decision-making, relevant costs must differ between alternatives.
a)
True
b)
False
64.
Avoidable costs are irrelevant for decision-making
a)
False
b)
True
65.
Opportunity cost is the value of the best alternative foregone.
a)
True
b)
False
66.
Economic order quantity (EOQ) minimizes the total cost of ordering and holding inventory.
a)
True
b)
False
67.
Sunk costs should be ignored in decision-making processes.
a)
True
b)
False
68.
Absorption costing allocates fixed costs to products based on activity levels.
a)
True
b)
False
69.
Activity-based budgeting identifies costs by analyzing resource consumption of activities.
a)
True
b)
False
70.
Incremental budgeting can perpetuate inefficiencies from previous budgets
a)
True
b)
False
71.
Zero-based budgeting is more time-consuming than incremental budgeting.
a)
True
b)
False
72.
Kaizen costing focuses on continuous cost reduction throughout the product’s lifecycle.
a)
True
b)
False
73.
The learning curve predicts that as cumulative production doubles, unit costs decrease at a constant rate
a)
True
b)
False
74.
Target costing is most effective when introduced during the design phase.
a)
True
b)
False
75.
Predetermined overhead rates are calculated based on past data and future forecasts.
a)
True
b)
False
76.
A flexible budget adjusts for actual activity levels during the reporting period.
a)
True
b)
False
77.
Sensitivity analysis examines how changes in input variables impact outcomes.
a)
True
b)
False
78.
Scenario analysis considers multiple possible future states of the business environment.
a)
True
b)
False
79.
Decision trees are used to evaluate the expected value of different choices under uncertainty.
a)
True
b)
False
80.
Overhead costs in activity-based costing are traced directly to products
a)
False
b)
True
81.
The primary purpose of budgets is to provide control and accountability in organizations.
a)
True
b)
False
82.
Responsibility accounting assigns costs to managers based on their control over expenses.
a)
True
b)
False
83.
Performance evaluation systems should align with organizational goals and objectives.
a)
True
b)
False
84.
Ethical considerations are irrelevant in setting performance targets.
a)
False
b)
True
85.
In lifecycle costing, post-sale costs are irrelevant for decision-making.
a)
False
b)
True
86.
Relevant costing ignores fixed costs entirely in decision-making.
a)
False
b)
True
87.
Sales volume variances measure differences in the actual and budgeted number of units sold.
a)
True
b)
False
88.
The margin of safety is the difference between actual sales and break-even sales.
a)
True
b)
False
89.
Cost control focuses on reducing expenses without compromising quality.
a)
True
b)
False
90.
Benchmarking involves comparing performance metrics with industry standards.
a)
True
b)
False
91.
Efficiency variances measure how well resources are utilized
a)
True
b)
False
92.
Variance analysis only applies to financial data.
a)
False
b)
True
93.
Total cost of ownership includes acquisition costs, operating costs, and disposal costs.
a)
True
b)
False
94.
Depreciation expenses are always included in cash flow analysis.
a)
False
b)
True

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