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Chris M., M.S.W. Social Work
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64) Which of the following is (are) true? A. The Principle

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64) Which of the following is (are) true?

A. The Principle of Capital Market Efficiency states that differences between financial assets are measured primarily in terms of risk and return. Investors choose the highest return for a given risk level.
B. The Principle of Comparative Advantage states that people apply the Principles of Self-Interested Behavior, Two-Sided Transactions, and Signaling to an environment characterized by similar financial assets, low transaction costs, and intense competition leads to capital market efficiency.
C. The Principle of Valuable Ideas states that new ideas can provide value when first introduced, even in an efficient capital market.

D. all of these answers are correct.

65) For what purpose is the theory of constraints used?

A. To reduce inventory levels

B. To identify and manage constraints that bottle-neck operations.
C. To balance performance measurement.

D. To reduce product defects.

66) Which one of the following characteristics would likely be associated with a just-in-time inventory method?

A. An understanding with customers that they may come to the showroom and select from inventory on hand.
B. Minimal finished goods inventory on hand.

C. A backlog of inventory orders not yet shipped.

D. Ending inventory of work in process that would allow several production runs.

67) A transfer price exists when two segments of the same organization sell _____.

A. the same service to competitors
B. a product in a foreign country

C. a service to each other

D. a product to the same customer

68) It costs Garner Company $12 of variable and $5 of fixed costs to produce one bathroom scale which normally sells for $35. A foreign wholesaler offers to purchase 2,000 scales at $15 each. Garner would incur special shipping costs of $1 per scale if the order were accepted. Garner has sufficient unused capacity to produce the 2,000 scales. If the special order is accepted, what will be the effect on net income?

A. $30,000 increase

B. $6,000 decrease

C. $4,000 decrease

D. $4,000 increase

69) Transfer-pricing systems exist to _____.

A. encourage managers to purchase goods and services internally
B. maximize worldwide taxes, duties, and tariffs

C. evaluate segment performance

D. all of these answers are correct

70) The financing section of a cash budget is needed if there is a cash deficiency or if the ending cash balance is less than:

A. the industry average.

B. management's minimum required balance.

C. the amount needed to avoid a service charge at the bank.
D. the prior years.

71) Effectiveness is indicated by _____.

A. all of these answers are correct
B. static-budget variances

C. flexible-budget variances

D. sales-activity variances

72) Important factors considered by sales forecasters include all of the following except _____.

A. the desired level of sales

B. marketing research studies
C. competitors’ activities

D. past patterns of sales

73) _____ is an important factor considered by sales forecasters.

A. All of these answers are correct

B. Estimates made by the sales force
C. General economic conditions

D. Past patterns of sales

74) A variable cost is a cost that

A. may or may not be incurred, depending on management's discretion.
B. occurs at various times during the year.

C. varies in total in proportion to changes in the level of activity.

D. varies per unit at every level of activity.

75) For an activity base to be useful in cost behavior analysis,

A. the activity level should be constant over a period of time.

B. there should be a correlation between changes in the level of activity and changes in costs.
C. the activity should always be stated in terms of units.

D. the activity should always be stated in dollars.

76) A cost which remains constant per unit at various levels of activity is a

A. manufacturing cost.
B. fixed cost.

C. mixed cost.

D. variable cost.

77) At the break-even point of 2,500 units, variable costs are $55,000, and fixed costs are $32,000. How much is the selling price per unit?

A. $22.00.

B. $9.20.

C. $12.80.

D. $34.80.

78) The first step in activity-based costing is to

A. assign manufacturing overhead costs for each activity cost pool to products.

B. compute the activity-based overhead rate per cost driver.

C. identify and classify the major activities involved in the manufacture of specific products.
D. identify the cost driver that has a strong correlation to the activity cost pool.

79) A well-designed activity-based costing system starts with

A. analyzing the activities performed to manufacture a product.

B. computing the activity-based overhead rate.

C. assigning manufacturing overhead costs for each activity cost pool to products.
D. identifying the activity-cost pools.

80) _____ costs relate to more th
Submitted: 5 years ago.
Category: Homework
Expert:  Chris M. replied 5 years ago.

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