Financial Decision-Making

Assume the required rate of return increases to 20%. The net present value of the investment would a. increase b. decrease c. stay the same d. become negative e. both “b” and “d”, above.

Corporate form of business organization

7.Which of the following characteristics is most important factor contributing to the growth of the corporate form of business organization: a. There is no distinction between the officers of the company and the owners of the company because they are one and the same. b. Limited legal liability. c. Profits are generally tax ...continues

Financial Management

8. If setup activity costs are $360,000, number of setups is 1,800, direct labor hours are 60,000, and machine hours are 36,000, then the setup activity cost driver rate, using the best cost driver for this situation, is : (a) $200 per setup (b) $6 per direct labor hour (c) $10 per machine hour (d) there is no appropri ...continues

Financial Management

9. What activity measure would be most appropriate cost driver for estimating the cost of cleaning the rooms in a hotel? (a) the number of registered guests (b) the number of hours required to clean the rooms (c) the number of personnel required to clean the rooms (d) pay rates of cleaning personnel

Financial Management

(Please show work) 10. Support costs have increased in today’s manufacturing environment because: (a) managers have let them get out of control (b) there is now a shift toward greater automation (c) fewer direct materials are being used in production (d) direct labor costs have increased

Financial Management

Please show work: 11. The use of unit-based cost drivers has the following consequences: (a) simple products are undercosted (b) complex products are overcosted (c) (a) and (b) (d) none of the above. Please provide the correct answer.

Financial Management: selling and administrative costs

12. Which of the following statements most accurately explains why selling and administrative costs have been largely ignored under conventional costing systems? (a) Selling and administrative costs are very hard to quantify except at exorbitant cost of measurement. (b) Selling and administrative have been negligible in amou ...continues

Financial Management

13. Which of the following is least likely to be a barrier in ABC implementation? (a) computer hardware and software problems (b) individual resistance to change (c) organizational resistance to change (d) lack of senior management commitment

Financial Management

14. Tom Terry manufactures an intricately detailed plastic and metal toy airplane. The following unit cost data pertain to the unit cost of an airplane: Direct materials $ 5.00 Direct labor 12.00 Manufacturing overhead (50% fixed) 10.00 Total manufacturing costs $27.00 Please show work: Assume that the airplane ...continues

Financial Management

Please show work: 15. Payne and McGough Corporation produces 5,000 units of part WOW internally for use in the assembly of its finished products. The unit cost of part WOW is based on a production level of 5,000 units per week as follows: Variable Cost $20.00 Fixed Cost 10.00 Total Cost/unit $30.00 Part ...continues