ACCT 301 Week 6 Quiz – DeVry
1. Question: (TCO 9) Which one of the following stages of the management decision-making process is properly sequenced?
2. Question: (TCO 9) When is incremental analysis most useful?
3. Question: (TCO 9) Which of the following will never be a relevant cost?
4. Question: (TCO 9) A company is deciding whether or not to replace some old equipment with new equipment. Which of the following is not considered in the incremental analysis?
5. Question: (TCO 9) It costs Lannon Fields $14 of variable costs and $6 of allocated fixed costs to produce an industrial trash can that sells for $30. A buyer in Mexico offers to purchase 2,000 units at $18 each. Lannon has excess capacity and can handle the additional production. What effect will acceptance of the offer have on net income?
6. Question: (TCO 9) Wishnell Toys can make 1,000 toy robots with the following costs:
Direct Materials $70,000
Direct Labor 26,000
Variable Overhead 15,000
Fixed Overhead 15,000
The company can purchase the 1,000 robots externally for $120,000. The avoidable fixed costs are $5,000 if the units are purchased externally. What is the cost savings if the company makes the robots?
7. Question: (TCO 9) All of the following are relevant to the sell or process-further decision, except for __________.
8. Question: (TCO 8) Most of the capital budgeting methods use __________.
9. Question: (TCO 8) The capital budgeting decision depends in part on the __________.
10. Question: (TCO 8) The cash-payback technique __________.
11. Question: (TCO 8) All of the following statements about intangible benefits in capital budgeting are correct, except that they __________
12. Question: (TCO 8) The profitability index __________.
13. Question: (TCO 8) Post audits of capital projects __________.
14. Question: (TCO 8) A company has a minimum required rate of return of 9% and is considering investing in a project that costs $50,000 and is expected to generate cash inflows of $20,000 at the end of each year for 3 years. The profitability index for this project is __________
15. Question: (TCO 8) Disadvantages of the annual rate of return method include all of the following, except that