Accounting 202 11,12 ; 14 – Flashcards
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Chapter 11 Standards differ from budgets in that:
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Budgets are a total amount and standards are a unit amount.
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Chapter 11 Standard costs:
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Are predetermined unit costs which companies use as measures of performance.
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Chapter 11 The advantages of standard costs include all of the following:
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Management by exception may be used. Management planning is facilitated. They may simplify the costing of inventories. It determines who is responsible for variances.
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Chapter 11 The advantages of standard costs include all of the following except:
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Management must use a static budget.
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Chapter 11 Normal standards:
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Allow for rest periods, machine breakdowns, and setup time.
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Chapter 11 The setting of standards is:
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A management decision.
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Chapter 11 Each of the following formulas is correct:
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Labor price variance=(actual hours* actual rate) - (actual hours* standard rate) Total overhead variance=actual overhead - overhead applied Labor quantity variance=(actual hours* standard rate) - (standard hours* standard rate)
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Chapter 11 Which of the following is correct about the total overhead variance:
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Standard hours allowed for the work done is the measure used in computing the variance.
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Chapter 11 The formula for computing the total overhead variance is:
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Actual overhead less overhead applied.
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Chapter 11 Which of the following is incorrect about variance reports:
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They should only be sent to the top level of management.
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chapter 11 In using variance reports to evaluate cost control management normally looks into:
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Both favorable and unfavorable variances that exceed a predetermined quantitative measure such as a percentage or dollar amount.
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Chapter 11 Generally accepted accounting principles allow a company to:
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Report inventory and cost of goods sold at standard cost as long as there is no significant differences between actual and standard cost.
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Chapter 11 Which of the following would not be an objective used in the customer perspective of the balanced scorecard approach?
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Earnings per share.
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chapter 11 Which of the following is incorrect about a standard cost accounting system?
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It reports only favorable variances.
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Chapter 11 The formula to compute the overhead volume variance is
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Fixed overhead rate*(normal capacity hours - standard hours allowed)
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Chapter 12 What is a true statement regarding using a higher discount rate to calculate the net present value of a project?
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It will make it less likely that the project will be accepted.
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Chapter 12 A positive net present value means that the:
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The project's rate of return exceeds the required rate of return.
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Chapter 12 Which of the following is an alternative name for the discount rate?
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Hurdle rate. Required rate of return. Cutoff rate.
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Chapter 12 If a project has intangible benefits whose value is hard to estimate, the best thing to do is:
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Include a conservative estimate of their value. Ignore their value in your initial net present value calculation, but then estimate whether their potential value is worth at lease the amount of the net present value deficiency.
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Chapter 12 An example of an intangible benefit provided by a capital budgeting project is:
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A decrease in customer complaints due to poor quality.
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Chapter 12 A post-audit of an investment project should be performed:
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On all significant capital expenditure projects.
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Chapter 12 A project should be accepted if its internal rate of return exceeds:
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The company's required rate of return.
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Chapter 12 Which of the following is correct about the annual rate of return technique?
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The calculation is simple. The accounting terms used are familiar to management. The timing of the cash inflows is not considered.
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Chapter 12 Which of the following is incorrect about the annual rate of return technique?
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The time value of money is considered.
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Chapter 14 Comparisons of data within a company are an example of the following comparative basis:
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Intracompany.
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Chapter 14 In horizontal analysis, each item is expressed as a percentage of the:
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Base year amount.
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Chapter 14 In vertical analysis, the base amount for depreciation expense is generally:
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Net sales.
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Chapter 14 Which of the following measures is an evaluation of a firm's ability to pay current liabilities?
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Acid-test ratio. Current ratio.
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Chapter 14 A measure useful in evaluating the efficiency in managing inventories is:
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Inventory turnover. Average days to sell inventory.
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Chapter 14 In reporting discontinued operations, the income statement should show in a special section:
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Gains and losses on the disposal of the discontinued segment. Gains and losses from operations of the discontinued segment.
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Chapter 14 Which of the situation below might indicate a company has a low quality of earnings?
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The company is continually reporting pro forma income numbers.
