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Exam 1: Managerial Accounting in the Information Age

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Question 21

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Managers that are able to recognize all ethical dilemmas have the most profitable businesses.

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Question 22

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In a period when anticipated production is 20,000 units, budgeted variable costs are $85,000 and budgeted fixed costs are $45,000. If 15,000 units are actually produced, what is the expected total cost?

A) $130,000
B) $97,500
C) $108,750
D) $118,750

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Question 23

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"You get what you measure!" refers to the relationship between

Good Buy Electronics has been offered $21,600 to produce 12,000 external hard drives for a customer. Good Buy has budgeted sales of 200,000 hard drives totaling $500,000, with fixed costs of $260,000 and total costs of $420,000. Assuming that Good Buy has the capacity to produce the additional units and that accepting this order will not affect any other orders, what effect will accepting the order have on Good Buy's profit?

Incremental analysis involves calculating the difference in revenue and difference in costs between alternatives.

Performance reports often compare current performance with

Enterprise resource planning systems (ERP) often support accounting, human resources, and e-commerce, in addition to production.

Hanover Binding plans to produce 40,000 books next year at a total cost of $1,640,000 with a selling price per book of $66.00. The fixed costs total $280,000. Management is considering lowering the price to $60.00 per book, and feels that this action will cause sales to climb to 50,000 books. What is the amount of incremental profit if 50,000 books are sold?

The goal of managerial accounting is to provide information that managers need for

Opportunity costs are

Leah Berry is entering her senior year as an accounting major and has a number of options for her summer break. Her options for the 3-month break follow: (1) Work full time at a local accounting firm making $3,200 per month. (2) Take a summer class which will cost $600 and work half time making $1,600 per month. (3) Take two classes at a cost of $1,200 and not work at all during the summer. Leah's incremental profit or loss if she chooses option 2 over option 1 would be

Triatt Resort has 200 rooms. Each room rents at $130 per night and variable costs total $42 per room per night of occupancy. The fixed costs total $18,700 per month. If Triatt is able to increase occupancy from 70% to 80%, by how much will total costs increase per day during June?

Opportunity costs are the value of benefits forgone when one alternative is selected over another.

Walmart and Procter & Gamble are two companies that collaborate in the use of Supply Chain Management (SCM).

Performance reports, like other managerial accounting reports, must follow GAAP.

Which of the following is most likely to be a fixed cost?

The organization which administers the Certificate in Management Accounting program is the

The goal of managerial accounting is to provide information for planning, controlling, and reporting information to shareholders.

Rincon Gifts had the following costs in May when 400 ceramic pots were produced: materials, $4,200; labor cost, $1,600; depreciation, $800; rent, $700; and other fixed costs, $500. If production changes to 500 units, which of the following costs will stay the same?

Below is a performance report that compares budgeted and actual profit of Atlanta Enterprises for the month of June: $\begin{array}{lrrr}&\text { Budget } & \text { Actual } & \text { Difference } \\\hline\text { Sales } & \$ 182,000 & \$ 180,000 & (\$ 2,000) \\\text { Less: } & & & \\\text { Cost of ingredients } & 145,000 & 141,000 & 4,000 \\\text { Salaries } & 24,000 & 23,000 & 1,000\\\text { Controllable profit }& \$ \overline{13,000} &\$ {16,000} &\$ {3,000}\end{array}$ In evaluating the department in terms of its changes in sales and expenses, what will be most important to investigate?