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| 1 | |
The firm's information system: |
| | A) | is a single integrated system |
| | B) | includes only financial information |
| | C) | may include customer satisfaction surveys |
| | D) | is less important as a firm grows in size |
| | E) | none of the above |
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| 2 | |
To align the interests of managers and owners, the author argues that: |
| | A) | managers naturally seek to maximize shareholders' wealth |
| | B) | managers act in their own interests |
| | C) | no employee incentives are needed in non-profit firms |
| | D) | owners must design systems to monitor and reward management behavior that increases the firm's profits |
| | E) | none of the above |
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| 3 | |
An internal accounting system should: |
| | A) | provide information to enable costs to be minimized |
| | B) | provide financial accounting data for external reporting purposes |
| | C) | provide management accounting information for decision-making |
| | D) | provide data for tax purposes |
| | E) | all of the above |
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| 4 | |
Economic Darwinism: |
| | A) | explains why firms persist in inefficient behavior |
| | B) | explains why some sub-optimal accounting practices persist |
| | C) | explains why marmots eat bears |
| | D) | explains why bears eat marmots |
| | E) | none of the above |
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| 5 | |
Modern management accountants: |
| | A) | are internal consultants |
| | B) | are mainly score-keepers |
| | C) | focus on calculating product costs |
| | D) | are 'corporate cops' |
| | E) | mostly a) and d) |
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| 6 | |
Internal control systems: |
| | A) | are the responsibility of the external auditor |
| | B) | include anti-fraud measures |
| | C) | are designed to allow financial misrepresentation |
| | D) | require that one person perform all aspects of a task |
| | E) | all of the above |
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| 7 | |
Performance measures: |
| | A) | are critical in designing a reward system |
| | B) | are unimportant in designing a reward system |
| | C) | always influence people to achieve them |
| | D) | are always worded vaguely |
| | E) | do not need to be rewarded |
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| 8 | |
The following data applies to problems 8-11.
Micro Enterprises has the capacity to produce 10,000 lerts, but operates at 90% of capacity. Lerts normally sell for $6 each, and cost an average of $5 to make, including a share of the monthly fixed costs of $18,000. Coyote Corp has offered to buy 1,000 lerts at $4 each.
What is the relevant cost per unit? |
| | A) | $2 |
| | B) | $3 |
| | C) | $4 |
| | D) | $5 |
| | E) | $6 |
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| 9 | |
On this information alone, should Micro accept the offer? |
| | A) | No, because it will lose $1 per unit |
| | B) | No, because it will lose $2 per unit |
| | C) | No, because it will exceed capacity |
| | D) | Yes, because it makes $1 per unit in the short run |
| | E) | Unable to determine |
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| 10 | |
What other factors should be taken into consideration? |
| | A) | The impact on the normal selling price of $6 |
| | B) | Will an additional shift be needed to complete the order? |
| | C) | Are future orders from Coyote likely? |
| | D) | Does the special price comply with the Robinson-Patman Act? |
| | E) | All of the above |
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| 11 | |
Assuming the same story, but Coyote's offer is for 1,500 units (all or nothing), should the offer be accepted? |
| | A) | No, because it will lose $1 per unit |
| | B) | No, because the opportunity costs outweigh the gains |
| | C) | No, (indifferent or worse) because the opportunity costs equal the gains |
| | D) | Yes, because it makes $1 per unit in the short run |
| | E) | Unable to determine |
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