Question 1

In the contribution margin approach,any excess revenues over costs

Accepted Answer

A)  Equals profits
B)  Contributes to common costs and profits
C)  Results in negative amortization
D)  Offsets activity-based accounts
E)  Reduces warehousing and production costsF) A) and B)
G) B) and D)

Question 2

What are the three bases of cost allocation?

Accepted Answer

The three bases are ...

Question 3

Return on assets managed equals contribution of the asset as a percentage of sales multiplied by the inventory turnover rate.

Accepted Answer

A) True 
 B)False

Question 4

ROAM (return on assets managed) equals:

Accepted Answer

A)  Inventory turnover times the net profit
B)  Accounts receivable plus inventories plus fixed assets divided by the contribution margin
C)  Contribution as a percentage of sales times the asset turnover rate
D)  The liquidity ratio divided by the turnover ratio
E)  Number of salespeople divided by the number of sales each madeF) C) and D)
G) B) and C)

Question 5

Angellini,Inc.makes three kinds of conveyors for food manufacturers in the Southeastern states-the Model 3115B,the Model 510 and the Model 610A.

-The reason for the low profitability of the Model 610A conveyor appears to be:

Accepted Answer

A)  The higher commission rate assigned on sales of this product
B)  Low gross margin
C)  Too much advertising for the given level of sales
D)  Not enough administrative support
E)  Inadequate distribution systemF) B) and D)
G) A) and C)

Question 6

Alex is struggling with his company's new financial accounting system.He knows the key is to understand how _____________ so that True profitability can be determined.

Accepted Answer

A)  Sales are allocated
B)  Advertising is measured
C)  Costs are allocated
D)  Territories are defined
E)  Products are producedF) A) and E)
G) D) and E)

Question 7

What are the seven functional cost groups associated with selling?

Accepted Answer

Selling-direct,selling-indirec...

Question 8

What is the difference between a direct cost and an indirect cost?

Accepted Answer

A direct cost can be specifica...

Question 9

The first step in conducting a cost analysis is to:

Accepted Answer

A)  Determine whether to use a full-cost or a contribution-margin approach
B)  Allocate natural costs to functional cost centers
C)  Break costs of revenues into relatively large blocks so that little meaning is lost within each block
D)  Determine which segment of the population most needs to be analyzed
E)  Specify the purpose for which the study is being doneF) A) and B)
G) D) and E)

Question 10

While sales analysis focuses on __________,cost analysis looks at the costs ________________ in producing those results.

Accepted Answer

A)  Leadership;activated
B)  Management expectations;expected
C)  Results achieved;incurred
D)  Net revenue;anticipated
E)  Market share;foregoneF) B) and D)
G) D) and E)

Question 11

The real benefit of marketing cost analysis is the opportunity it provides managers to isolate segments of the business that are most profitable as well as those that generate losses.

Accepted Answer

A) True 
 B)False

Question 12

The term __________ is often restricted to the materials,labor,power,rent and other items used in making the product.

Accepted Answer

A)  Indirect cost
B)  Expense
C)  General expense
D)  Indirect expense
E)  CostF) All of the above
G) C) and E)

Question 13

Marketing costs analysis cannot help managers identify opportunities for increasing the effectiveness of marketing expenditures.

Accepted Answer

A) True 
 B)False

Question 14

How should direct selling costs be functionally allocated?

Accepted Answer

Within product groups,selling time devot...

Question 15

R&G sells lighting fixtures to homeowners,government institutions and commercial buyers.Its sales force is organizing according to customer.The following is a profit and loss statement for each division using the full-cost approach: 
-If the division selling to homeowners was eliminated and the remaining costs were allocated to the commercial and institutional divisions,what would be the net profit/loss for the institutional division?

Accepted Answer

A)  ($19,000) 
B)  ($24,000) 
C)  ($31,000) 
D)  ($36,000) 
E)  Cannot be determined from the information givenF) A) and D)
G) B) and E)

Question 16

Companies are more likely to conduct _______ analysis than profitability analysis

Accepted Answer

A)  Sales
B)  Headquarters
C)  Customer relationship management
D)  Production
E)  AccountingF) None of the above
G) B) and D)

Question 17

Tyrone is attempting to measure the long-term value or profitability of his customers.Tyrone is measuring

Accepted Answer

A)  Sales per customer per quarter
B)  Current operating profit minus direct costs
C)  Gross revenue minus net revenue
D)  Lifetime value of the customer
E)  Relationship revenue minus overhead costsF) B) and C)
G) A) and C)

Question 18

What is the distinction between a cost and an expense?

Accepted Answer

A cost is often restricted to ...

Question 19

The cost of renting a warehouse to store component parts for making various sizes of electric generators is an example of a general expense.

Accepted Answer

A) True 
 B)False

Question 20

Why should costs not be allocated based on sales volume?

Accepted Answer

Allocating costs based on sale...

Exam 12: Cost Analysis

Companies are more likely to conduct _______ analysis than profitability analysis

Correct Answer
verified

What are the three bases of cost allocation?

Correct Answer
verified
The three bases are ...
View Answer

What is the distinction between a cost and an expense?

Correct Answer
verified
A cost is often restricted to ...
View Answer

Tyrone is attempting to measure the long-term value or profitability of his customers.Tyrone is measuring

Correct Answer
verified

Marketing costs analysis cannot help managers identify opportunities for increasing the effectiveness of marketing expenditures.

Correct Answer
verified

Correct Answer
verified

How should direct selling costs be functionally allocated?

Correct Answer
verified
Within product groups,selling time devot...
View Answer

What are the seven functional cost groups associated with selling?

Correct Answer
verified
Selling-direct,selling-indirec...
View Answer

The cost of renting a warehouse to store component parts for making various sizes of electric generators is an example of a general expense.

Correct Answer
verified

What is the difference between a direct cost and an indirect cost?

Correct Answer
verified
A direct cost can be specifica...
View Answer

The term __________ is often restricted to the materials,labor,power,rent and other items used in making the product.

Correct Answer
verified

In the contribution margin approach,any excess revenues over costs

Correct Answer
verified

The real benefit of marketing cost analysis is the opportunity it provides managers to isolate segments of the business that are most profitable as well as those that generate losses.

Correct Answer
verified

Return on assets managed equals contribution of the asset as a percentage of sales multiplied by the inventory turnover rate.

Correct Answer
verified

Alex is struggling with his company's new financial accounting system.He knows the key is to understand how _____________ so that True profitability can be determined.

Correct Answer
verified

While sales analysis focuses on ,cost analysis looks at the costs ______ in producing those results.

Correct Answer
verified

ROAM (return on assets managed) equals:

Correct Answer
verified

The first step in conducting a cost analysis is to:

Correct Answer
verified

Angellini,Inc.makes three kinds of conveyors for food manufacturers in the Southeastern states-the Model 3115B,the Model 510 and the Model 610A. -The reason for the low profitability of the Model 610A conveyor appears to be:

Correct Answer
verified

Why should costs not be allocated based on sales volume?

Correct Answer
verified
Allocating costs based on sale...
View Answer

Exam 12: Cost Analysis

Companies are more likely to conduct _______ analysis than profitability analysis

Correct AnswerverifiedShow Answer

What are the three bases of cost allocation?

Correct AnswerverifiedThe three bases are ...View AnswerShow Answer

What is the distinction between a cost and an expense?

Correct AnswerverifiedA cost is often restricted to ...View AnswerShow Answer

Tyrone is attempting to measure the long-term value or profitability of his customers.Tyrone is measuring

Correct AnswerverifiedShow Answer

Marketing costs analysis cannot help managers identify opportunities for increasing the effectiveness of marketing expenditures.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

How should direct selling costs be functionally allocated?

Correct AnswerverifiedWithin product groups,selling time devot...View AnswerShow Answer

What are the seven functional cost groups associated with selling?

Correct AnswerverifiedSelling-direct,selling-indirec...View AnswerShow Answer

The cost of renting a warehouse to store component parts for making various sizes of electric generators is an example of a general expense.

Correct AnswerverifiedShow Answer

What is the difference between a direct cost and an indirect cost?

Correct AnswerverifiedA direct cost can be specifica...View AnswerShow Answer

The term __________ is often restricted to the materials,labor,power,rent and other items used in making the product.

Correct AnswerverifiedShow Answer

In the contribution margin approach,any excess revenues over costs

Correct AnswerverifiedShow Answer

The real benefit of marketing cost analysis is the opportunity it provides managers to isolate segments of the business that are most profitable as well as those that generate losses.

Correct AnswerverifiedShow Answer

Return on assets managed equals contribution of the asset as a percentage of sales multiplied by the inventory turnover rate.

Correct AnswerverifiedShow Answer

Alex is struggling with his company's new financial accounting system.He knows the key is to understand how _____________ so that True profitability can be determined.

Correct AnswerverifiedShow Answer

While sales analysis focuses on __________,cost analysis looks at the costs ________________ in producing those results.

Correct AnswerverifiedShow Answer

ROAM (return on assets managed) equals:

Correct AnswerverifiedShow Answer

The first step in conducting a cost analysis is to:

Correct AnswerverifiedShow Answer

Angellini,Inc.makes three kinds of conveyors for food manufacturers in the Southeastern states-the Model 3115B,the Model 510 and the Model 610A. -The reason for the low profitability of the Model 610A conveyor appears to be:

Correct AnswerverifiedShow Answer

Why should costs not be allocated based on sales volume?

Correct AnswerverifiedAllocating costs based on sale...View AnswerShow Answer

Correct Answer
verified

Correct Answer
verified
The three bases are ...
View Answer

Correct Answer
verified
A cost is often restricted to ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Within product groups,selling time devot...
View Answer

Correct Answer
verified
Selling-direct,selling-indirec...
View Answer

Correct Answer
verified

Correct Answer
verified
A direct cost can be specifica...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

While sales analysis focuses on ,cost analysis looks at the costs ______ in producing those results.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Allocating costs based on sale...
View Answer