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KIỂM TRA GIỮA KỲ The best description of flexible budget is: a A budget which improved lead time between the preparation of the master budget and the commencement of the budget period b A rolling budget which is reviewed quarterly, and updated accordingly c A budget which is designed to change as volume of activity changes on the basis of analyzing the cost behavior patterns d A twelve-month period budget which includes semi-variable overhead costs only Information on the static budget and actual result as follows: Static Budget (12,000 units) Actual Results (11,200 units) Revenue 600,000 571,200 Variable costs 144,000 145,600 Fixed costs 70,000 69,500 Net income 386,000 356,100 Net income on the flexible budget is: $355,600 CM = 600,000 – 144,000 = 456,000 CM/unit = 456,000/12,000 = $38 => fixed dựa theo số lượng thực tế = 38*11200=355,600 3.Given the following statement: (i): ROI and RI are tools for evaluating the performance of the profit center (ii): Net income is a tool to evaluate management performance of divisional managers (iii): For long-term decision about which segment should be expanded its production and sales to achieve the highest overall target profit, the basis of making decision is the segment’s contribution margin ratio Which statement(s) is/are correct? a (i) and (iii) b None of the above statements is correct c (i) and (ii) d (i),(ii) and (iii) 4.The A company prepares a cash budget for the year 20x3 The balance in trades receivable on 1/1/20x2 is $460,000 The budgeted sales for the year 20x2 is $5,400,000, evenly estimated each month of the year Sales at A company are normally collected as follows: 20% in the month of sale; 80% in the month following the sales Total cash receipts in the year 20x2 are expected to be: $5,500,000 = 460,000 + 5,400,000 – 5,400,000/12*80% Which of the following statements is/ are true? (1) - Kaizen costing method is based around a calculation involving a desired profit margin and a competitive market price; (2)-An important characteristic of total quality management is a focus primarily on internal customers and continuous improvement measures Statement (1) is true and statement (2) is false If the operating asset turnover increased by 50 percent and the margin increased by 50 percent, the ROl would increase by: 125 percent (1.5x1.5 = 2.25 => increase 1.25) What is the purpose of a flexible budget? a To eliminate cyclical fluctuations in production reports by ignoring variable costs b To reduce the total time in preparing the annual budget c To allow management some latitude in meeting goals d To compare actual and budgeted results at virtually any level of production The component division (Division C) of a company, CE, Widget manufactures, which it can sell either to Division E which uses the components to make electronic goods, or externally into a perfectly competitive market Demand for the component is such that Division C is working at fully capacity Components sold to external market require addition packaging at cost of $3 per unit Production cost per unit before taking account of the packaging costs are: prime cost $4 variable production cost: $6 and allocated fixed production overhead: $7 The external market price for components s $25 per unit What price would CE prefer Division C to use when selling components to Division E? $22 9.Tasty Pty distributes pizza ingredients Its ABC system has activities: Order processing : $ 40 per order Line - item ordering : $ per line item Store deliveries : $ 50 per store delivery Carton deliveries : $ per carton Shelf - stocking : $ 16 per stocking - hour The controller wants to examine the individual customer profitability of two customer : D Cafe R Pizza Total orders 14 11 Average line items per order 16 Total store deliveries 11 Average cartons shipped per store delivery 22 20 Average hours of shelf - stocking per store delivery 0.5 Average revenue per delivery $2,400 $1,800 Average cost of goods sold per delivery $2,100 $1,650 The carton delivery charge for D Cafe is : $154 = store deliveries*22 average cartons*$1 10 The K operates a standard costing system at 200.000 units of budgeted output The budgeted fixed manufacturing overhead of $ 1,000,000 was $ 300,000 lower than the actual cost (U) Total fixed manufacturing overhead variance was $100,000 unfavorable The actual level of production was : 240,000 units The total FOH variance = actual cost – applied cost = 1.300.000 – 1.000.000/200.000*X = 100.000 => X = 240.000 units 11 A budget should /can all of the following, except a Become the performance standard against which firms can compare the actual results b Be prepared by managers from different functional areas working independently of each other c Be adjusted if new opportunities become available during the year d Help management allocate limited resources 12 When machine hours are used as cost allocation base, the item most likely to contribute to an unfavorable variable overhead efficiency variance is: a Using more machine hours than budgeted b More units being produced than planned c Unused capacity d Workers wastefully using variable overhead items 13 Budgeted sales of Y for June are 20,000 units At the end of the production process for Y, 10% of the production units are scrapped as defective Opening inventories of Y for June are budgeted to be 11,000 units and closing inventories will be 9,000 units All inventories of finished goods must have successfully passed the quality control check What is the production budget for Y in June? 20,000 units 10% scrapped => budget phải 22,000 để bù scap Unit produced = 22,000 – 9,000 + 11,000 = 20,000 14 Which of the following statements about transfer pricing is not true? a If the selling division has spare capacity, the transfer price should be the marginal cost of production b The most efficient transfer price will be the opportunity cost of the selling division c If the selling division has no spare capacity, the transfer price should be the marginal cost of production, plus any lost confibution d The transfer price should match the selling division's cost of capital to customer 15 Tasty Pty distributes pizza ingredients Its ABC system has activities: Order processing: $40 per order Line-item ordering: $3 per line item Store deliveries: $50 per store delivery Carton deliveries: $1 per carton Shelf-stocking: $16 per stocking-hour The controller wants to examine the individual customer profitability of two customer D Cafe R Pizza Total orders 14 11 Average line items per order 16 Total store deliveries 11 Average cartons shipped per store delivery 22 20 Average hours of shelf stocking per store delivery 0.5 Average revenue per delivery $2,400 $1,800 Average cost of goods sold per delivery $2,100 $1,650 The line-item ordering cost for R Pizza is: $528 =11 orders*16 line items*$3 16 Which of the following is the advantage of just-in-time control system? a It is easier to switch suppliers a Labour becomes less important b There is a reduced reliance on suppliers c The quality of production improves Câu 17: During October, 10,000 direct labor hours were worked at a standard cost of $10 per hour If the direct labor rate variance for October was $4,000 U, the actual cost per direct labor hour must be: $10.40 AH(AR – SR) = 10,000*(AR – 10) = 4,000 => AR = 10.4 Câu 18:In which of the following situations would the use of the imposed budgets not be appropriate? a In decentralized organizations and acting autonomously b In a very small business c During the crisis period when the organization’s survival is challenging d During the period of economic hardship such as Covid - 19 Câu 19:The S Import is a distributor of blank DVDs M Record purchases blank DVDs from S Import at $5.00 per DVD DVDs are shipped in packages containing 25 DVDs S Import pays all incoming freight M Record has an annual demand of 104,000 (d) blank DVDs Sales are constant at a rate of 2,000 blank DVDs per week M Record earns 15% on is cast investment The purchase order lead time is week Relevant ordering costs per purchase order is $94.50 (c) and carrying costs per package per year $3.50 (h) What is the economic order quantity? 188 packeges √ ì 2000 ì 52 ữ 25 ì 94.5 3.5 + (15% × × 25) Câu 20:which of the following is the best description of an investment centre? a a centre in which managers has control over only for finacial outputs in form of generating sales revenue b a centre in which managers has control over for profit c a centre in which managers has control over only for costs d a centre in which mangers has control over for costs, revenues and current as well non current operating assets Câu 21: During September, 40,000 units of product were produced The standard quantity of material allowed per unit was pounds at a standard cost of £ 6.00 per pound If there was a unfavorable materials usage variance of £ 30,000 for September, the actual quantity of materials used must be: 165,000 pounds: SP*(AQ – SQ) = 6*(AQ – 4*40,000) = 30,000 => AQ = 165,000 Câu 22: The following dates apply to a specific order processed by B Ltd: Order placed by customer: 27 June; Order received: July; Order placed on production: July; Production commenced: 11 July; Order completed: 17 July; Order delivered to customer: 20 July What is the order receipt time and the waiting time? The order receipt time: days - the waiting time: days 27/6 – 2/7: days – order receipt time; 5/7 – 11/7: days – waiting time Câu 23: Company AA uses the residual income method to appraise the performance of divisional managers From the options below, select the FALSE statement in this context a Residual income can be adjusted to account for different levels of risk b It is a profit-based measure, so may be subject to accounting manipulation c It encourages divisional managers to be focused on long-term results d It favours divisions which have older asset bases Câu 24: Division Z manufactures chemicals It sells chemicals to the external market at a price of $22 per litre This provides a contribution/sales ratio of 40% Division X (a separate part of the same group company) requires a regular supply of chemicals in order to manufacture their own products For external sales, variable cost includes $1.20 per litre for extra courier charges These are not applicable to internal sales Z has sufficient capacity to meet all internal and external demand Which price range would maximise profit from the company's perspective? a $1.20 - $22 b $22 - $23.20 c $12 - $22 d $13.20 - $22 Câu 25: Mike is the newly appointed management accountant of an engineering company The company has three key customers He wants to undertake customer profitability analysis The following information is available for the three key customers: D E F Gross margin 2,500,000 1,500,000 1,550,000 Sales visits 70 95 400 Orders placed 3,000 3,000 1,700 Invoices raised 1,900 1,200 1,700 Additional information: Sales visits $450 per visit Order processing $30 per order placed Dispatch costs $45 per order placed Credit control costs $160 per invoice How would Mike rank the three customers? a Rank - Customer F, Rank - Customer D, Rank - Customer E b Rank - Customer D, Rank - Customer E, Rank - Customer F c Rank - Customer F, Rank - Customer E, Rank - Customer D d Rank - Customer D, Rank - Customer F, Rank - Customer E Câu 26: Jacko Ltd uses standard absorption costing and the following information was recorded by the company for April: Budget Actual Output and sales (units) 6,500 6,000 Selling price per unit €22 €26 Variable cost per unit €8 €8 Total fixed overheads €29,250 €33,000 The fixed overhead volume variance for April was: €2,250 adverse FOH/u (budget) = $4.5; sales variance = 500 (A) => 500*4.5 = 2,250 (A) Câu 27: R Plc is preparing its cash budget for next year The estimated accounts payable balance at the beginning of next year is $54,000 The budgeted purchases for next year are $680,000, occurring evenly throughout the year It is estimated that 75% of purchases will be on credit and the remainder will be for cash The company pays for credit purchases in the month following purchase The budgeted cash payments to suppliers next year are: $691,500 = 54,000 + 680,000 – 680,000/12*75% Câu 28: Which of the following statements about the fixed production overhead volume variance is true? a It does not exist in a standard marginal costing system b It is the same in a standard marginal costing system as in a standard absorption costing system c It is the difference between budgeted overhead expenditure and actual overhead expenditure d It does not exist in a standard absorption costing system Câu 29: Select the one which would not be an example of an internal failure cost for an organisation a Re-inspection of goods after defects have been found in production b Scrap of materials and work-in-progress c Failure analysis and correction of defects found in production d Training staff to reduce defects during the production process (prevention cost) Câu 30: From the options below, select the best explanation of a favourable labour rate variance a A strike occurred during the production b All are possible explanations c There was a general increase in wages d A lower grade of worker was used Câu 31: Choose the correct term for the below definition: “A budget set prior to the control period, and not subsequently changed in response to changes in activity or costs or revenues.” a Participative budget b Flexible budget c Fixed budget d Top-down budget Câu 32: From the options below, choose the ONE feature that is a possible downside of both Residual Income (RI) and Return On Investment (ROI) in measuring divisional performance a Both measures can encourage divisional managers to manipulate both profit and capital employed figures b Both figures not facilitate comparisons among different divisions c Both figures not take into account the cost of capital of an organisation d Both measures encourage divisional managers to keep a hold of old and possibly inefficient assets RI and ROI can be manipulated by divisional managers either by manipulating the capital employed or profit figure for a division ROI encourages managers to keep a hold of old assets, however RI does not have this issue RI takes into consideration the firm’s cost of capital but the ROI does not RI does not facilitate comparisons with other divisions or organisations because it is an absolute figure ROI is a relative measure so it can be used to compare the performance of a division against other divisions in the firm Câu 33: N Plc is a company manufacturing graphics cards for computers and laptops The organisation has recently discovered a new material that significantly increases the capacity of the firm’s cards The organisation has recently filed to get this new technology patent protected From the options below, select the category of the balanced scorecard within which this development fits a Learning and growth b Financial c Internal business process d Customer Câu 34: Sara Ltd operates a standard marginal costing system An extract from the standard cost card for the labour costs of one of its products is as follows: Labour cost (standard): hours x £12 = £60 Actual results for the period were as follows: Production: 11,500 units; Labour rate variance: £45,000 adverse; Labour efficiency variance: £30,000 adverse Calculate the actual rate paid per direct labour hour £12.75 SR(AH – SH) = 12(AH – 5) = 30,000 => AH = 60,000 AH(AR– SR) = 45,000 = 60,000(AR– 12) => AR = 12.75 Câu 35: Companies employ the strategy of Just-in-Time (JIT) inventory to increase efficiency and decrease waste by receiving goods only as they are needed in the production process, thereby reducing inventory costs From the options below, select the ONE cost that a company is likely to reduce by introducing a JIT system a Inventory holding costs b Purchasing costs c Informational system costs d Ordering costs Câu 36: E Ltd has the following information available concerning its inventory items, as follows: Relevant ordering costs per purchase order: $450; Relevant carrying costs per year for each package includes the opportunity cost of 15% return on investment and the other costs of $4 per year Annual demand is 30,000 packages per year The purchase price per package is $48 What is the annual relevant carrying costs at the economic order quantity? $8,695 𝑄=√ ∗ 30,000 ∗ 450 = 1552 (𝑝𝑎𝑐𝑘𝑎𝑔𝑒𝑠) + (15% ∗ 48) annual relevant carrying costs = Q/2*(4 + 15%*48) = 8,695 Câu 37: Thomas is the manager of Division Z in a big conglomerate Win Inc Division Z is operating at full capacity and can sell everything produced either internally or externally From the options below, select the basis on which Thomas will fix the transfer price of Division Z a Current selling price plus opportunity costs b Full cost plus a mark-up c Market price d Variable costing Câu 38: A Ltd is preparing the master budget for one of their products, the KING product, for the forthcoming year, as follows: Sales demand in units: 50,000; Material usage per unit: kgs; Estimated opening inventory: 10% sales demand; Required closing inventory: 40% higher than opening inventory How many units of the KING product will need to be produced? 52,000 Opening = 5,000; closing = 7,000 => produced = 50,000 + 7,000 – 5,000 = 52,000 Câu 39: The following budgeted information comes from the accounting records as follows: Sales units 1,200 Sales revenue $120,000 Direct material 48,000 Direct labour 24,000 Variable overhead 18,000 Fixed overhead 12,000 Profit 18,000 In a period where the actual sales were 1,900 units, what would be the flexed budget? $35,500 (chia tính lại tất cost theo 1,900 units) Câu 40: One of the leading managers in Pantheon Ltd is Kari Kari is known for her ability to motivate employees and drive sales in any area she is responsible for Kari’s bonus for this year will depend on her ability to increase the residual income of her area of responsibility What responsibility structure is Kari most likely the manager of? Investment centre Câu 41: K Corporation has provided the following summary of its quality cost report for the last two years: This year Last year Prevention costs $200,000 $300,000 Appraisal costs 210,000 315,000 Internal failure costs 190,000 114,000 External failure costs 800,000 621,000 On the basis of this report, which one of the following statements is most likely correct? a All statements are incorrect b Quality costs such as scrap and rework increased by 29% (190,000/114,000 = 167% => increase 67%) c A decrease in internal and external failure costs resulted in less need for prevention and appraisal costs (thực tế increase) d An decrease in prevention and appraisal costs resulted in fewer defects, and therefore, resulted in a decrease in internal and external failure costs An decrease in prevention and appraisal costs resulted in HIGHER defects, and therefore, resulted in a INCREASE in internal and external failure costs CHƯƠNG 1 A company manufactures a single product, M Budgeted production output of product M during August is 200 units Each unit of product M requires labour hours for completion and PR Co anticipates 20 per cent idle time Labour is paid at a rate of $7 per hour What is the direct labour cost budget for August? $10,500 Active hours required = 200*6 = 1,200 20% idle time = 25% active time = 1,200*25% = 300 => total cost = (1,200 + 300)*7 = 10,500 Using linear regression, the relationship between the monthly quantity produced (x) and total production cost Có was found to be y = 10,000 + 216x The only variable costs are raw materials and labour Last month, 700 units were made and raw materials cost $150 per unit Labour is paid at $15 per hour Estimate the variable production cost if output is 500 units $108,000 = 216*500 (vì 10,000 fixed costs) Each unit of product Echo takes five direct labour hours to make Quality standards are high, and 8% of units are rejected after completion as sub-standard Next month’s budgets are as follows: Opening inventories of finished goods: 3,000 units Planned closing inventories of finished goods: 7,600 units Budgeted sales of Echo: 36,800 units All inventories of finished goods must have successfully passed the quality control check What is the direct labour hours budget for the month? 225,000 hours Budgeted produced = 36,800 + 7,600 – 3,000 = 41,400 92% of total production, allowing for an 8% rejection rate => 41,400/0.92 = 45,000 direct labour hours budget = 45,000*5 = 225,000 hrs Budgeted sales of X for December are 18,000 units At the end of the production process for X, 10% of production units are scrapped as defective Opening inventories of X for December are budgeted to be 15,000 units and closing inventories will be 11,400 units All inventories of finished goods must have successfully passed the quality control check What is the production budget for X for December? 16,000 units Budgeted produced = 18,000 + 11,400 – 15,000 = 14,400 10% of production units are scrapped = 1/9 output = 14,400/9 = 1,600 => total = 14,400 + 1,600 =16,000 The finance manager for Halfway Ltd is responsible for preparing the following reports for the firm: (I) Statement of profit or loss (II) Statement of financial position (III) Cash flow forecast for the next years (IV) Sales budget for the next years (V) Monthly operating statements for of Halfway’s divisions Which of these is/are an example of feedforward control? III & IV only Furniture, Inc., estimates the following number of mattress sales for the first four months of 20x6: January: 22,000; February: 30,800; March: 28,600; April: 35,200 Finished goods inventory at the end of December is 6,600 units Target ending finished goods inventory is 20% of the next month’s sales How many mattresses should be produced in the first quarter of 20x6? 81,840 mattresses = 22,000 + 30,800 + 28,600 + 35,200*20% - 6,600 R Plc Is preparing its cash budget for next year The accounts receivable at the beginning of next year are expected to be $46,000 The budgeted sales are $540,000 and will occur evenly throughout the year 80% of the budgeted sales will be on credit and the remainder will be cash sales Credit customers pay in the month following sale The budgeted cash receipts from customers next year are: $550,000 = 540,000 + 46,000 – 540,000/12*80% From the options below, select the purpose of a monthly cash budget a to determine whether there will be sufficient cash in the bank to meet requirements b to determine next month’s sales volumes c to determine the amount of inventory to purchase in the following month d to determine when to pay workers’ wages Projected sales for Sommers, Inc., for next year and beginning and ending inventory data are as follows: Sales: 50 000 units; Beginning inventory: 000 units; Desired ending inventory: 8,000 units The selling price is £40 per unit Each unit requires four pounds of material which costs £6 per pound The beginning inventory of raw materials is 12 000 pounds The company wants to have 3000 pounds of material in inventory at the end of the year Sommers’ budgeted total purchase cost of direct materials would be: £1,242,000 Unit produced = 50,000 + 8,000 – 4,000 = 54,000 => total materials need = 54,000*4 + 3,000 – 12,000 = 207,000 => total purchase cost = 207,000*6 = 1,242,000 10 B Corporation is working on its direct labor budget for the next two months Each unit of output requires 0.05 direct labor-hours The direct labor rate is $7.50 per direct labor-hour The production budget calls for producing 9,100 units in May and 8,800 units in June If the direct labor work force is fully adjusted to the total direct labor-hours needed each month, what would be the total combined direct labor cost for the two months? $6,712.50 = (9,100 + 8,800)*0.05*7.5 11 Which of the following is true of master budgets? a They aid in quantifying the expectations of all stakeholders b They include only financial aspects of a plan and exclude nonfinancial aspects c They aid in coordinating what needs to be done to implement a plan d They must be administered rigidly after they are committed to 12 Which of the following are most likely to lead to ethical issues when setting and using a budget? a The use of interdivisional trade to reduce the tax liability budget for the entire organisation b Internal politics leading to some divisions having more challenging targets than others c Reducing the quality of the organisation’s products in order to increase profits for the budget period d Incentivising managers with rewards based on the achievement of non-financial targets e Reducing learning and development costs in order to satisfy shareholder’s demands for profit maximization 13 From the options below, ONE item that should not be included in the cash budget a Gain on the disposal of a piece of machinery b Receipt of interest from short term investments c Payment of tax due on last year’s profits d Repayment of the capital amount of a loan 18 The Waverly Company has budgeted sales for next year as follows: Sales in units: 1st Quarter – 12,000; 2nd Quarter – 14,000; 3rd Quarter – 18,000; 4th Quarter – 16,000 The ending inventory of finished goods for each quarter should equal 25% of the next quarter’s budgeted sales in units The finished goods inventory at the start of the year is 3,000 units Scheduled production for the third quarter should be: 17,500 = 18,000 + 16,000*25% - 18,000*25% 19 the one that shows the right combination of financial statements that would be included in a master budget: A budgeted profit and loss account, balance sheet and cash flow statement 20 The S Company makes and sells a single product, Product R Budgeted sales for May are $300,000 Gross Margin is budgeted at 30% of sales dollars If the net income for May is budgeted at $40,000, the budgeted selling and administrative expenses are: $50,000 = 300,000*30% - 40,000 21 From the options below, select the best definition of a flexible budget: A budget which shows costs and revenues at different activity levels 22 The below details have been extracted from the accounts payable records of Q Plc: - Invoices paid in the month of purchase*: 15% of total value; - Invoices paid in the first month after purchase: 65% of total value; - Invoices paid in the second month after purchase: 20% of total value This pattern of payments is expected to continue in the future and has been used to produce the company’s cash budget for October to December Purchases for October to December are budgeted as follows: October: $140,000; November: $125,000; December: $150,000 *) A settlement discount of 5% is taken on invoices paid in the month of purchase The amount budgeted to be paid to suppliers in December is: $130,625 24 Tucker’s sales budget is as follows: January: €182,000, February: €320,000, March: €354,000 20% of sales are paid for immediately in cash Of the credit customers, 40% in the month following the sale and are entitled to a 2% discount The remaining customers pay two months after the sale is made What is the value of sales receipts shown in the company’s cash budget for March? €258,512 25 Which of the below statements are TRUE? (ii) and (iv) (i) Bottom up budgeting is sometimes referred to as non-participatory budgeting; (ii) The level of employee involvement in bottom up budgeting is compatible with attitudes towards staff within a traditional just-in-time philosophy; Fixed overhead 2.40 per gallon Total $6.00 per gallon What is the transfer price for the chemicals per gallon based on standard variable cost? $9.00 = + 2.4 + 3.6 20/ Selling Division S of company Z Plc has surplus capacity as there is a limit to the amount that the division can sell externally From the options below, select the optimum transfer price for Division S: Optimum TP = Marginal Cost 21 Transfer prices are the prices charged a when transferring goods to international divisions b when delivering goods to the customer c for the goods produced by one division to another division that needs these goods d for distributing goods from one warehouse to another 22 The A divisionalized company uses transfer pricing as part of its management information system Each manager is assessed on their divisional profit Division A makes a unit for $10 variable cost and $3 of fixed cost is absorbed Division B takes these units, incurs incremental $8 variable cost and absorb $4 It then sells them for $21 The transfer price is set at $12 There are no capacity constraints and all fixed costs are unavoidable in the short run Which of the above statements is true? a The manager of division B does not produce the units b From the company’s perspective, production should not occur c The manager of division A does not produce the units d The transfer price goal congruent 23 From the options below, select the statement that best describes goal congruence when setting transfer prices a Minimize opportunity costs b Maximise profits of the buying division c Establish incentives for autonomous division managers to make decisions that are in the best interests of the company as a whole d Allow top management to become actively involved 24 Division A sells its products internally to Division B, which in turn, produces B’s products that sell for $10 per unit Division A incurs costs of $1.25 per unit while Division B incurs additional costs of $5.00 per unit Assuming the transfer price of A’s production to Division B is set at $2.00 per unit, what amount correctly reflects the company's operating income per unit? $3.75 = 10 – 1.25 - 25 In the Bombadier Company, Division A has a product that can be sold either to outside customers or to Division B Information about these divisions is given below: The company uses the opportunity cost approach to transfer pricing What is the maximum transfer price in Case 2? $74 (đề giống câu 3) 26 TS Ltd has divisions, Division T and Division S Division T makes a component for sunglasses which it can sell only to Division S It has no other outlet for sales Current information for the divisions is as follows: - Incremental cost for Division T £200; - Incremental cost for Division S £400; - Transfer price for component £220; - Final sunglasses selling price £800; - Unit sales 100 The transfer price is based on a 10% mark up on incremental costs What is the amount of profit recognised by Division S? £18,000 = (800 – 400 – 200*1.1)*100 27 Division R and Division S are two divisions of RS Co Division R manufactures one product, product X Unit production cost and market price are as follows: - Direct materials: £7; - Direct labour: £5; - Fixed overhead: £1; - Prevailing market price: £18 Product X is sold outside the company in a perfectly competitive market and also to Division S If sold outside the company, product X incurs variable selling costs of $3 per unit which are not incurred on internal transfers If the total demand for product X were more than sufficient for Division R to manufacture to capacity, at what price would the company prefer Division R to transfer product X to Division S? £15 = + + 28 From the options below, select the best way to calculate the transfer price for a selling division which operates at full capacity Marginal cost + Opportunity cost of lost external contribution 29 The "floor" in transfer pricing is: the transfer price that would leave the selling division no worse off if the good is sold to an internal division 30 Division S of Kracker Company makes a part that it sells to other companies Data on that part appear below: Selling price on the intermediate market: $30 Variable costs per unit: $22 Fixed costs per unit (based on capacity): $7 Capacity in units: 50,000 Division B, another division of Kracker Company, presently is purchasing 10,000 units of a similar product each period from an outside supplier for $28 per unit, but would like to begin purchasing from Division S Suppose that Division S has ample idle capacity to handle all of Division B's needs without any increase in fixed costs or cutting into sales to outside customers If Division S refuses to accept a transfer price of $28 or less and Division B continues to buy from the outside supplier, the company as a whole will: lose $60,000 in potential profit Vì transfer internally nên bỏ 10,000 units bán Transfer pricing = opportunity cost = selling price = 22 (B cần 10000 A free capacity) => cost incurred = income decreases = (28-22)*10000 = 60,000 31 F Plc manufactures designer furniture It has a specialised division D which makes high end designer glass door knobs These door knobs have an external market and can be sold for £20 each Division D has spare capacity of 4,000 units The wardrobe assembly division W uses this door knob in making its final product (designer wardrobes) Current information for the divisions is as follows: - Incremental cost for Division D: £15; - Incremental cost for Division W: £65; - Number of units of wardrobes that can be sold - 6,000 units; What is the transfer price per unit under an opportunity cost approach? £15 for 4,000 units and £20 for 2,000 units 33 Gunnison Furniture had the following historical accounting data, per hundred board feet, concerning one of its products: Finished shelving: Direct materials $30 Direct labor 16 Variable overhead 10 Fixed overhead 12 Variable selling expenses Finished shelving: Fixed selling expenses The shelving is normally transferred internally from the Cutting Division to the Finishing Division It also may be sold externally for $110 per hundred board feet The minimum profit level accepted by the company is a markup of 20 percent If the variable manufacturing cost transfer price method is used without a fixed fee, Gunnison Furniture's transfer price will be: $56 = 30 + 16 + 10 CHƯƠNG 1.Which of the following are customer costs at the market level? A Advertising campaigns B Market research C Provision of samples to customers (Customer level) D Market development E Regular sales calls (Customer level) F Acceptance of sales order (Order level) The following information applies to Krynton Corp which supplies microscopes to laboratories throughout the country Krynton purchases the microscopes from a manufacturer which has a reputation for very high quality in its manufacturing operation Annual demand (weekly demand= 1/52 of annual demand): 13,000 units; Orders per year as per EOQ model: 13; Lead time in days: 15 days; Annual relevant carrying costs: $2,600 What is the economic order quantity assuming each order was made at the economic-order-quantity amount? a 13,000 units b 3,000 units c 1,485 units d 780 units e All are incorrect (=13,000/13) 4.Pareto Analysis is a statistical technique in decision-making used for the selection of a limited number of tasks that produce a significant overall effect ‘Buca de Bepo' is a successful Italian food franchise in Country Oakland The trainee accountant who has prepared the following analysis You are the recently appointed Assistant Accounts Manager The contribution of each product is as follows: Pizza: $56,000 Pasta: $34,000 Drinks: $25,000 Ice Creams: $44,000 Other Desserts: $15,000 Decide which of the findings reported by the trainee accountant are TRUE and which are FALSE? Ice creams outsell all other products FALSE Management should focus their attention on Pizza and Pasta which earn 72% of total contribution for the business FALSE Three of the product lines make up just over 75% of the contribution for the business TRUE Pizza and Pasta are the most popular products FALSE Other desserts are the least profitable product TRUE 5.Which of the following terms relate to e-commerce? A C2B B B2C C EDI D B2B 6.Which of the following are performance measures used by firms to assess their own performance in relation to suppliers? A.Reduction in the number of suppliers B.Response time to customer queries C.Percentage of orders processed by electronic means D.Number of expedited orders 7.From the options below, select the statements that are NOT true in the context of utilizing both Customer Profitability Analysis (CPA) and Pareto analysis A One way of effectively dealing with small volume/order size customers is the introduction of a third party wholesaler (if possible) in to the supply chain It will reduce the costs of serving smaller value customers and at the same time improve the product range and service to the small customers B In Pareto’s analysis, for the customers falling in the 80% group, one of the factors identified is the small volume/order size They are not profitable to the businesses due to high production batch costs and order processing costs C Pareto’s analysis will imply that 80% of the customers not generate profits and it is implied to stop serving them through a systematic approach over time D For most businesses, when a CPA is performed, it is not unusual to find a Pareto curve exists 8.Globe Inc is a distributor of DVDs DVD Mart is a local retail outlet which sells blank and recorded DVDs DVD Mart purchases tapes from Globe at $25.00 per DVD; DVDs are shipped in packages of 60 Globe pays all incoming freight, and DVD Mart does not inspect the DVDs due to Globe's reputation for high quality Annual demand is 312,000 DVDs at a rate of 6,000 DVDs per week DVD Mart earns 15% on its cash investments The purchase-order lead time is one week The following cost data are available: Relevant ordering costs per purchase order: $114.50; Carrying costs per package per year: Relevant insurance, materials handling, breakage, etc., per year: $ 4.50 What are the annual relevant carrying costs? $8,265 (Total cost = Căn (2*DCH) = Căn (2*312,000*114.5*(4.5/60+15%*25)) Đem chia đôi 9.After careful planning, Jammu Manufacturing Corporation has decided to switch to a justin-time inventory system At the beginning of this switch, Jammu has 30 units of product in inventory Jammu has 2,000 labor hours available in the first month of this switch These hours could produce 500 units of product Customer demand for this first month is 400 units If justin-time principles are correctly followed, how many units should Jammu plan to produce in the first month of the switch? 370 (JIT sản xuất vừa đủ sài, cần 400 sx 370, có sẵn 30) 10.From the options below, choose what 'Satisfying customers whilst minimising resource use' is an example of: a Distribution channel profitability b Activity based management c Total quality management d Business process re-engineering e Customer profitability analysis 12.Clothes, Inc., has an average annual demand for red, medium polo shirts of 25,000 units The cost of placing an order is $80 and the cost of carrying one unit in inventory for one year is $25 Determine the reorder point assuming a lead time of 10 days and a work year of 250 days:1000 units (mỗi ngày cần 25000/250 = 100 ->Reorder point = 10*100 = 1000) Determine the safety stock required to prevent stockouts assuming the maximum lead time is 20 days and the maximum daily demand is 125 units: 1500 units (=Max usage * Max lead time - Reorder point) 13.Pa Corporation's management keeps track of the time it takes to process orders During the most recent month, the following average times were recorded per order: Wait time 15.6 days Inspection time 0.8 days Process time .1.6 days Move time 0.7 days Queue time 3.9 days Compute the manufacturing cycle efficiency (MCE): …0.23….(round decimal places) What percentage of the production time is spent in non-value-added activities? 77 % Compute the delivery cycle time…22.6…….days (round decimal places) 14.Porter's Value Chain focuses on systems, and how inputs are changed into the outputs purchased by consumers From the options below, select the component of Porter's Value Chain that is reported as the head-office function that involves the selection of stockists and setting up contracts for buying inputs, or assets, for the company a Outbound logistics b Inbound logistics c Procurement d Infrastructure e Technological Development (Gồm chính, thêm Operations, Maketing and sales, Service; phụ Firm infrastructure, Human resources, Technology Development, Procurement) 15 Distribution channels are in simple terms the means of transacting with customers The channel is the point of purchase which need not necessarily be the point of communication, payment, delivery and after sales support Companies may transact with their customers directly e.g through sales teams, telephone, shops, internet or through indirect channels e.g retailers, resellers, wholesalers, agents The method of channel distribution chosen can account for a significant proportion of total costs Thus, choosing the wrong channel can lead to significant losses for a particular product/service Key aspects that need consideration in this regard include: access to customer base, brand awareness, competitiveness, achieving sales and market targets, speed of payments, customer retention rates and most important of all, …profitability 16.R Corporation's management reports that its average delivery cycle time is 25.2 days, its average throughput time is 7.6 days, its manufacturing cycle efficiency (MCE) is 0.25, its average move time is 0.9 day, and its average queue time is 4.0 days a What is the wait time? …17.6… days (round decimal place) b What is the process time? …1.9… days (round decimal place) c What is the inspection time? …0.8…… days (round decimal place) 17.IKEA Furniture needs to purchase glass panes to make glass top coffee tables Last year IKEA Furniture has two suppliers, Base and Toto Based on last year’s experience with these two suppliers, IKEA provides you with the following supplier related information: The supplier performance index of Base and Toto are, respectively: Base: 0.30; Toto: 0.05 (Tính khoản chi phí đầu chia cho purchase price) 18.The following information applies to Krynton Company, which supplies microscopes to laboratories throughout the country Krynton purchases the microscopes from a manufacturer which has a reputation for very high quality in its manufacturing operation Annual demand (weekly demand = 1/52 of annual demand): 52,000 units; Orders per year: 20; Lead time in days: 15 days; Cost of placing an order: $100 What is the reorder point? 2,143 units (=Average usage*leadtime; AU = 52000/52/7) 19.Ideally, how many units should be produced in a just-in-time manufacturing system? a budgeted customer demand for the following week b maximum production capacity for the current week c budgeted customer demand for the current week d actual customer demand for the current week 20.Doron Ltd has just computed the supplier performance index (SPI) of the company's two suppliers, Xema and Zetta Xema's SPI is 2.11 and Zetta's SPI is 0.99 Which of the following statements is correct? a Xema is a preferred supplier because its SPI is greater than 1.0 b Both suppliers are considered poor quality suppliers, because their SPI is higher than 0.50 c Xema is a preferred supplier because it has a higher SPI than Zetta d The SPI indices suggest that for every $1 purchase price, Doron has to incur $2.11 supplier activity costs for Xema and $0.99 activity costs for Zetta e All are correct 21 A customer has placed an order with Cyborg Computer for a custom-made computer However, as a result of a system error, the order was lost It took one of the sales representative three days to locate the order again Once the order was located, the sales representative sent the order to the production department This error is likely to negatively affect which of the following? a Customer response time and delivery time b Customer response time and order receipt time c Production lead time and delivery time d Order receipt time and delivery time 22.Mini Company sells stuffed tigers Bir Inc manufactures many different stuffed animals Mini orders 20,800 tigers per year, 400 per week, at $15 per tiger The manufacturer covers all shipping costs Mini earns 15% on its cash investments The purchase-order lead time is weeks Mini sells 310 tigers per week The following data are available (based on management's estimates): Estimated ordering costs per purchase order: $22; Estimated insurance, materials handling, breakage, and so on, per year: $7; Actual ordering costs per order: $25 What is the economic order quantity using the estimated amounts? a 638 stuffed tigers b All are incorrect (Đáp án 314.5, ordering cost dùng estimated) c 325 stuffed tigers d 310 stuffed tigers e 191 stuffed tigers 23.The break-even time has which of the following characteristics? A It encourages incremental projects B It cannot be established until after the product development cycle is completed C The time from the original concept to the point where sufficient profit has been generated to repay the original investment D It measures cash flow not profit E The time from the first delivery to a customer of a new product to the point where sufficient profit has been generated to repay the original investment F It discourages major projects that take a long time 24.Customer value is an important part of activity-based management and it enables an organization to achieve both cost reduction and improved customer value through the use of which of the following?: A Developing programs to eliminate the causes of these costs B Determining root causes of these costs C Identifying major opportunities for cost reduction D Introducing performance measures to monitor the effect of these programs 25.Diane, the financial controller for Apprentice Ltd, is putting together an analysis that will determine the most profitable customers to the company That way, the company can focus on exceeding the expectations of those customers the most Which of the following statements regarding Diane’s analysis is TRUE? Select the THREE that apply: A If the fixed cost of order handling in Apprentice Ltd is high, Diane should advise the sales team to ensure that unprofitable customers start making orders smaller and more frequent B Diane should factor in her analysis, the time and costs involved in handling customer queries and special requirements C Diane should factor into her analysis, the credit periods different customers are given D When Diane carries out her analysis, she is likely to find that a small percentage of customers account for a large portion of company revenue, this is known as the driver effect E Diane can use discounted cash flows to appraise different customers over their expected lifecycle 26.From the options given below, choose the statement that best describes the aims of Porter's Value Chain a Analysis of the value creating activities within an organization with the objective of evaluating a firm's ability to achieve a competitive advantage b Calculation of the net benefit or loss In present value terms, from an investment opportunity c Systematic interdisciplinary examination of the factors affecting the cost of a product or service and the value placed on those factors by customers d Redesign of an activity, product or service so that the value to the customer is enhanced while costs are reduced or at least increased less than the resulting price increase 27 Just-In-Time (JIT) methods generally increase the difference between absorption and variable costing net operating income F Companies that implement JIT purchasing will emphasize developing short-term supplier relationships to attain flexibility F Just-in-time practices improve return on investment (ROI) by decreasing turnover F The demand-pull feature of JIT production systems results in close coordination among workstations and smooths the flow of goods T JIT production system always uses a master production schedule to organize the production F JIT purchasing is guided solely by the EOQ model because that model emphasizes the tradeoff between relevant carrying and ordering costs F CHƯƠNG 1.The following are the expected quality costs for a firm for a selected period Calculate the amount of external failure costs a b c d All are incorrect $33 000 $37 500 $42 000 External (Return goods+Customer problems+Product liability claim), Internal (Normal Spoilage+Rework+Breakdown maintenance), Appraisal (Line inspection, preventive maintenance, incoming materials inspection), Prevention (Design engineering, training, suppliers evaluations) 2.Six sigma refers to: a Business improvement methodology that involves rigours data analysis b The six key features of total quality management c The amount of quality deviation that is considered acceptable in total quality management d All are incorrect e The formal quality accreditation relating to a series of standards recognised by an international quality setting agency 3.Examples of nonfinancial measures of quality include the a number of customer complaints b inspection costs incurred c design engineering costs d quality training costs 4.An example of a nonfinancial measure for customer satisfaction is a rework costs due to inefficiency b number of customer complaints c warranty claims d liability claims incurred to the company 5.Adolphson Corporation has provided the following summary of its quality cost report for the last two years: On the basis of this report, which one of the following statements is most likely correct? a Quality costs such as returns and repairs under warranty decreased by 40% b An increase in prevention and appraisal costs resulted in fewer defects, and therefore, resulted in a decrease in internal and external failure costs c Quality costs such as scrap and rework decreased by 48% d A decrease in internal and external failure costs resulted in less need for prevention and appraisal costs LaCrosse Products has a budget of $900,000 in 2015 for prevention costs If it decides to automate a portion of its prevention activities, it will save $80,000 in variable costs The new method will require $40,000 in training costs and $100,000 in annual equipment costs Management is willing to adjust the budget for an amount up to the cost of the new equipment The budgeted production level is 150,000 units Appraisal costs for the year are budgeted at $600,000 The new prevention procedures will save appraisal costs of $50,000 Internal failure costs average $15 per failed unit of finished goods The internal failure rate is expected to be 3% of all completed items The proposed changes will cut the internal failure rate by one-third Internal failure units are destroyed External failure costs average $54 per failed unit The company's average external failures average 3% of units sold The new proposal will reduce this rate by 50% Assume all units produced are sold and there are no ending inventories How much will appraisal costs change assuming the new prevention methods reduce material failures by 40% in the appraisal phase? $50,000 decrease As per control charts, nonrandom variations occurs when a defective products are produced as a result of a systematic problem b chance fluctuations in the speed of equipment cause defective products to be produced c there is a sudden increase in production d there is a sudden increase in sales A series of pictures that shows the flow of activities that make up a process is called a fishbone diagram F Identifying root cause cost drivers is sufficient to enable non-value-added activities to be eliminated F Process Reengineering is generally considered to be a more radical approach to improvement than Total Quality Management T Determining the cause of non-value-added activities requires cost driver analysis T Internal failure costs result from identification of defects during the appraisal process Such costs may include scrap, rejected products, rework, and downtime T Conformance quality a b c d is the first step of a quality management system such as ISO 9000 is the performance of a product or service according to design and product specifications focuses on how a product meets customer needs and wants is making the product according to design, engineering, and manufacturing specifications 11.An important difference between financial measures of quality and nonfinancial measures of quality is that a nonfinancial measures of quality tend to be useful indicators of future long-term performance, while financial measures of quality have more of a short-term focus b nonfinancial measures are generally too subjective to have any short-term value, while financial measures are too objective to have medium-term value c nonfinancial measures are generally too subjective to have any long-term value, while financial measures are too objective for taxation purposes d financial measures of quality tend to be useful indicators of future long-term performance, while nonfinancial measures have more of a short-term focus 12 Monticello Corp manufactures expensive tables Its varnishing department is fully automated and requires substantial inspection to keep the machines operating properly An improperly varnished table is very expensive to correct Inspection hours for the 5,000 tables varnished in September totaled 1,500 hours by employees Eight quarts of varnish were used, on average, for each table The standard amount of varnish per table is nine quarts The cost of inspection for September was equal to the budgeted amount of $40,000 The $40,000 represents an activity cost pool What is the inspection cost per unit? $8.00 14.Statistical quality control includes a control chart that a plots control observations over various periods of time b plots only those observations outside specified limits c plots each observation relative to specified ranges that represent the expected distribution d graphs a series of random events of a process 15.A graph of a series of successive observations of a particular step, procedure, or operation taken at regular intervals of time is a a cause-and-effect diagram b control chart c fishbone diagrams d Pareto diagram 16.Ply Corp manufactures doors Classify each of the following quality costs as prevention costs, appraisal costs, internal failure costs, or external failure costs Internal failure costs: Downtime due to quality problems, Retesting of reworked products, Reentering data because of keypunch errors, Analysis of the cause of defects in production External failure costs: Lost sales arising from a reputation for poor quality, Warranty repairs Prevention costs: Technical support provided to suppliers, Quality circles, Appraisal costs: Depreciation of test equipment, Audits of the effectiveness of the quality system 17 What would be the total prevention cost appearing on the quality cost report? 118000 What would be the total appraisal cost appearing on the quality cost report? 74000 What would be the total internal failure cost appearing on the quality cost report? 147000 What would be the total external failure cost appearing on the quality cost report? 87000 19.A company is striving to move away from a traditional, hierarchical organisational structure The reason for this is that it is trying to respond to the requirements of a customer service-focused business environment, where quality is a key strategic variable Which of the following methods is being deployed in this case? a Total Quality Management b Business Process Re-engineering c Business Process Management d Continuous Process Improvement e Kaizen costing 20.Cause-and-effect diagrams are used in quality management systems to a distinguish random from nonrandom variations in an operating process b evaluate the tradeoffs among prevention costs, appraisal costs, and failure costs c identify and respond to potential reasons of failure d indicate how frequently each type of failure occurs 21 Which of the following is NOT a dimension of quality? a reliability b performance c durability d all of the above are dimensions of quality 22 An example of a nonfinancial measure for customer satisfaction is a average manufacturing time for key products b time taken on machine repairs and costs incurred c percentage of products that fail soon after delivery d contribution margin 23 Managers identify the relevant costs and benefits for each solution by focusing on _ a how total costs and total revenues will change under each alternative solution b how the employees of a company would be able to implement a change c the alternative solution that will derive maximum customer satisfaction d how long it will take for the improved program to be fully functional 24 Which of the following time drivers contribute to non-value-added activities? a Poor quality b Preventive maintenance c Poorly structured delivery processes d Move work-in-process inventory between machines e Bottlenecks in production 26 Strykerz Corp expects to spend $800,000 in 2015 in appraisal costs if it does not change its incoming materials inspection method If it decides to implement a new receiving method, it will save $60,000 in fixed appraisal costs and variable costs of $0.50 per unit of finished product The new method involves $140,000 in training costs and an additional $150,000 in annual equipment rental Internal failure costs average $160 per failed unit of finished goods During 2014, 5% of all completed items had to be reworked External failure costs average $400 per failed unit The company's average external failures are 1% of units sold The company carries no ending inventories, because all jobs are on a per order basis and a just-in-time inventory ordering method is used What is the net effect on appraisal costs for 2015, assuming the new receiving method is implemented and that 800,000 material units are received? a All are incorrect b $120,000 increase c $400,000 increase d $170,000 decrease e $190,000 decrease 27 LaCrosse Products has a budget of $900,000 in 2015 for prevention costs If it decides to automate a portion of its prevention activities, it will save $80,000 in variable costs The new method will require $40,000 in training costs and $100,000 in annual equipment costs Management is willing to adjust the budget for an amount up to the cost of the new equipment The budgeted production level is 150,000 units Appraisal costs for the year are budgeted at $600,000 The new prevention procedures will save appraisal costs of $50,000 Internal failure costs average $15 per failed unit of finished goods The internal failure rate is expected to be 3% of all completed items The proposed changes will cut the internal failure rate by one-third Internal failure units are destroyed External failure costs average $54 per failed unit The company's average external failures average 3% of units sold The new proposal will reduce this rate by 50% Assume all units produced are sold and there are no ending inventories What is the net change in the budget for prevention costs if the procedures are automated in 2015? Will management agree with the changes? a $60,000 decrease, yes b $80,000 decrease, yes c $60,000 increase, yes d $140,000 increase, no 28 A tool which indicates how frequently each type of defect occurs is a Pareto diagram 29 For the current year, prevention costs are what percentage of sales? a 7.00% b 8.25% c 2.00% d 9.00% Credit sales in Dec = 60%*30,000 = 18,000 Credit sales in Jan = 60%*40,000 = 24,000; Credit sales in Feb = 60%*37,500 = 22,500 Cash collected in Feb = cash in Feb + credit sales of Jan, Feb = 40%*37,500 + 50%*22,500 + 45%*24,000 = 37,050 Fixed overhead budget variance = Actual fixed overhead - Budgeted fixed overhead = 8780 - 10600 = 1820 F VMRV = AH*(AR - SR) = 990*(3380/990 - 3.3) = 113 U => Total spending overhead cost = -1820 + 113 = 1707 F VMEV = SR*(AH - SH) = 3.3*(990-1080) = 297F Total spending and activity variance = 1707 F + 297 F = 2004 F MPV = AQ purchased*(AP - SP) = AQ purchased*(43250/AQ - 2) = 3250 => AQ = 20,000 Total variance = VMRV + VMEV = AH*(AR - SR) + SR*(AH - SH) = 3,500*(70,000/3,500 - SR) + SR*(3500 - 3550) = - 4550 => SR = 21