|
| 1 |
Steven Chang, a recent accounting graduate, is employed as a trainee management accountant by HappyCow Ltd, a dairy product manufacturer of products such as cheese, butter, yoghurt and ice-cream. Steven is using the accounting information from the general ledger system as a base for estimating the following year’s costs and has been assigned by his manager the task of deciding which costs fall into the following categories: engineered, committed and discretionary.
| $’000s | Full-cream milk | 25 000 | Advertising and promotions | 800 | Skim-milk powder | 1 500 | Management salaries | 6 000 | Factory rent (20-year lease) | 500 | Gelatine | 250 | Management training courses | 100 | Skim milk | 22 500 | Research and development programs | 3 000 | Machinery depreciation | 1 000 | Administrative salaries | 2 300 |
The total amount of discretionary costs Steven should report to his manager is: |
 | A) | $49 250 000 |
| B) | $3 900 000 |
| C) | $10 250 000 |
| D) | $9 800 000 |
|
| 2 |
Steven Chang, a recent accounting graduate, is employed as a trainee management accountant by HappyCow Ltd, a dairy product manufacturer of products such as cheese, butter, yoghurt and ice-cream. Steven is using the accounting information from the general ledger system as a base for estimating the following year’s costs and has been assigned by his manager the task of deciding which costs fall into the following categories: engineered, committed and discretionary.
| $’000s | Full-cream milk | 25 000 | Advertising and promotions | 800 | Skim-milk powder | 1 500 | Management salaries | 6 000 | Factory rent (20-year lease) | 500 | Gelatine | 250 | Management training courses | 100 | Skim milk | 22 500 | Research and development programs | 3 000 | Machinery depreciation | 1 000 | Administrative salaries | 2 300 |
The total amount of engineered costs Steven should report to his manager is: |
| A) | $49 250 000 |
| B) | $3 900 000 |
| C) | $10 250 000 |
| D) | $9 800 000 |
|
| 3 |
Steven Chang, a recent accounting graduate, is employed as a trainee management accountant by HappyCow Ltd, a dairy product manufacturer of products such as cheese, butter, yoghurt and ice-cream. Steven is using the accounting information from the general ledger system as a base for estimating the following year’s costs and has been assigned by his manager, the task of deciding which costs fall into the following categories: engineered, committed and discretionary costs.
| $’000s | Full-cream milk | 25 000 | Advertising and promotions | 800 | Skim-milk powder | 1 500 | Management salaries | 6 000 | Factory rent (20-year lease) | 500 | Gelatine | 250 | Management training courses | 100 | Skim milk | 22 500 | Research and development programs | 3 000 | Machinery depreciation | 1 000 | Administrative salaries | 2 300 |
The total amount of committed costs Steven should report to his manager is: |
| A) | $49 250 000 |
| B) | $3 900 000 |
| C) | $10 250 000 |
| D) | $9 800 000 |
|
| 4 | When management accountants are investigating the relationship between the cost, and the activity that drives that cost, they are investigating: |
| A) | cost estimation |
| B) | cost behaviour |
| C) | cost prediction |
| D) | cost allocation |
|
| 5 | The relevant range is the range of activity: |
| A) | where the business expects to operate at maximum efficiency |
| B) | where the business expects to earn a profit |
| C) | where the business expects to earn abnormal returns |
| D) | where a particular cost behaviour can be assumed to be valid |
|
| 6 | Zing Soft Drink Company’s marginal cost of producing batches of Orange Zing decreases until the modern production facilities are fully utilised. Then the marginal cost of producing the next batch of Orange Zing increases and continues to increase with each additional batch as the antiquated production facilities are used to ensure that consumer demand for Orange Zing is met. This is an example of: |
| A) | variable costs |
| B) | fixed costs |
| C) | step-fixed costs |
| D) | curvilinear costs |
|
| 7 | Within the relevant range, accountants approximate a curvilinear cost with a: |
| A) | fixed cost function |
| B) | step-fixed cost function |
| C) | marginal cost function |
| D) | semivariable cost function |
|
| 8 | A combination of automation and labour negotiations that have resulted in a relatively stable workforce has led to: |
| A) | increased fixed costs and increased variable costs |
| B) | decreased fixed costs and increased variable costs |
| C) | decreased fixed costs and decreased variable costs |
| D) | increased fixed costs and decreased variable costs |
|
| 9 | A cost that has the function Y (total cost) = $240 000 + $2.00 per unit is a: |
| A) | step-fixed cost |
| B) | semivariable cost |
| C) | curvilinear cost |
| D) | committed cost |
|
| 10 | Costs that remain the same over a wide range of activity levels but jump to a different amount for levels outside that range are: |
| A) | step-fixed costs |
| B) | semivariable costs |
| C) | curvilinear costs |
| D) | step-variable costs |