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Accounting 2200
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1. a position that is directly related to achieving the basic objectives of an organization is called a _______ position b
a. staff
b. line
c. organization chart
d. controller
e. chief financial adviser
f. decentralization
2. a diagram that shows how responsibility is divided among managers and shows the formal lines of reporting and c
communication is called an ________
a. staff
b. line
d. controller
f. decentralization
3. a ______ postion provides service or assistance to other parts of an organization and does not directly achieve the basic a
objectives of the organization
a. staff
b. line
d. controller
f. decentralization
4. the delegation of decision-making authority throughout an organization by allowing manager at various operating levels to f
make key decisions relating to their area of responsibility is called _______
a. staff
b. line
d. controller
f. decentralization
5. the manager in charge of the accounting department is generally known as the ______ d
a. staff
b. line
d. controller
f. decentralization
6. the _______is the member of the top management team who is responsible for providing timely and relevant data to support e
planning and control activities and for preparing financial statements for external users
a. staff
b. line
d. controller
f. decentralization
7. A(n) _______is a game plan that enables a company to attract customers by distinguishing itself from competitors c
a. Six Sigma
b. enterprise risk management
c. strategy
d. customer value proposition
e. value chain
f. The Sarbanes-Oxley Act of 2002
8. ______ is a a methor that relies on customer feedback and objective data gathering and analysis techniques to drive process a
improvements
a. Six Sigma
b. The Sarbanes-Oxley Act of 2002
c. stakeholders
d. enterprise risk management
e. customer value proposition
f. value chain
9. A(n) __________is a series of steps that are followed to carry out some task in a business c
a.manufacturing cell
b. lean thinking model
c. business process
d. theory of constraints
e. corporate governance
f. corporate social responsibility
10. the system by which a company is direct and controlled is called _______ c
a. business process
b. stakeholders
c. corporate governance
d. Six Sigma
e. manufacturing cell
f. strategy
11. the process used by a company to help identify the risks that is faces and to develop responses to those risks so that the a
company is reasonably assures of meeting its goals is known as _________
a. enterprise risk management
b. manufacturing cell
c. lean thinking model
e. business process
f. corporate governance
12. a ___________ is a work space that takes employees and equipment from departments that were previously separated from one d
another and places them side-by-side
a. non-value-value activity
b. enterprise risk management
c. The Sarbanes-Oxley Act of 2002
d. manufacturing cell
e. chain management
f. corporate governance
13. the various groups of people such as employees, customers, and suppliers whose interests are tied to a company's a
performance are called ______________
a. stakeholders
b. corporate governance
c. manufacturing cell
d. lean thinking model
e. pulls
f. constraint
14. a(n) ________is anything that prevents and organization or individual from getting more of what it wants d
a. customer value proposition
b. stakeholders
c. non-value-added activity
d. constraint
e. supply chain management
f. non constraint
15. increasing the rate of output of a(n) _________ as a result of an improvement effort is unlikely to have much effect on profits c
a. constraint
b. customer value proposition
c. nonconstraint
e. theory of constraints
f. manufacturing cell
16. a(n) _______ consists of business functions that add value to a company's products and services such as research and e
development, product design, manufacturing, marketing, distribution, and customer service
a. nonconstraint
b. theory of constraint
c. enterprise risk management
e. value chain
f. pulls
17. ________ is a concept whereby organizations consider the needs of all stakeholders when making decisions a
a. Corporate social responsibility
b. theory of constraints
c. lean thinking model
d. Supply Chain Management
e. manufacturing chain
f. customer value proposition
18. a management approach that coordinates business processes across companies to better serve end consumers is known as a
_______
a.supply chain management
c. value chain
d. enterprise risk management
e. corporate social responsibility
f. customer value proposition
19. the ________is a five-step management approach that organizes resources around the flow of business processes and that ______ d
units through those processes in response to customer orders h
a. customer value proposition
b. supply chain management
c. pulls
e. corporate governance
f. theory of constraints
g. supply chain management

h. pulls
i. The Sarbanes-Oxley Act of 2002
j. non-value-added activity
k. customer value proposition
l. lean thinking model
20. a company can only succeed if it creates a reason for customers to choose it over a competitor, in short a _______ d
a. pulls
b. non-value-added activity
c. business process
e. manufacturing cell
f. theory of constraints
21. _________ was enacted to protect the interests of those who invest in publicly traded companies f
a. Constraint
b. Customer Value Proposition
c. Six Sigma
d. Strategy
e. Corporate Governance
f. The Sarbanes-Oxley Act of 2002
22. A(n) _______ consumes resources but does not add value for which customers are willing to pay c
a. business process
c. non-value-added activity
d. value chain
e. theory of constraint
f. the Sarbanes-Oxley Act of 2002
23. The management approach that emphasizes the importance of managing constraints is knowns as the d
a. value chain
b. non-value-added activity
c. corporate social proposition
d. theory of constraints
e. The Sarbanes-Oxley Act of 2002
f. customer valu proposition
24. Mary Karston was hired by a popular fast-food restaurant as an order-taker and cashier. Shortly after taking the job, she was b
shocked to overhear an employee bragging to a friend about short-changing customers. She confronted the employee who d
then snapped back: "Mind your own business. Besides, everyone does it and the customers never miss the money." Mary didn't
know how to respond to this aggressive stance.
Required:
What would be the practical consequences on the fast-food industry and on consumers if cashiers generally shortchanged
customers at every opportunity? (Select all that apply.)
a. if cashiers routinely short-changed customers whenever the opportunity presented itself most of use would not count our
change before leaving the counter
b. dishonesty on the part of cashiers can have impact on other employees of the restaurant
c. customers do not mind being short-changed by cashiers because everyone does it
d. the net result of widespread dishonestly would be a shrunken economy with a lower growth
25. [The following information applies to the questions displayed below.] b
Richmond, Inc., operates a chain of 44 department stores. Two years ago, the board of directors of Richmond approved a
large-scale remodeling of its stores to attract a more upscale clientele.
Before finalizing these plans, two stores were remodeled as a test. Linda Perlman, assistant controller, was asked to oversee
the financial reporting for these test stores, and she and other management personnel were offered bonuses based on the
sales growth and profitability of these stores. While completing the financial reports, Perlman discovered a sizable inventory
of outdated goods that should have been discounted for sale or returned to the manufacturer. She discussed the situation
with her management colleagues; the consensus was to ignore reporting this inventory as obsolete because reporting it
would diminish the financial results and their bonuses.
according to the IMA's Statement of Ethical Professional Practice would it be ethical for Perlman not to report the inventory as
obsolete
a. yes
b. no
26. [The following information applies to the questions displayed below.] b
Richmond, Inc., operates a chain of 44 department stores. Two years ago, the board of directors of Richmond approved a
large-scale remodeling of its stores to attract a more upscale clientele.
Before finalizing these plans, two stores were remodeled as a test. Linda Perlman, assistant controller, was asked to oversee
the financial reporting for these test stores, and she and other management personnel were offered bonuses based on the
sales growth and profitability of these stores. While completing the financial reports, Perlman discovered a sizable inventory
of outdated goods that should have been discounted for sale or returned to the manufacturer. She discussed the situation
with her management colleagues; the consensus was to ignore reporting this inventory as obsolete because reporting it
would diminish the financial results and their bonuses.
would it be easy for Perlman to take the ethical action in this situation
a.yes
b. no
27. Consumers and attorney generals in more than 40 states accused a prominent nationwide chain of auto repair shops of a
misleading customers and selling them unnecessary parts and services, from brake jobs to front-end alignments. Lynn Sharpe c
Paine reported the situation as follows in "Managing for Organizational Integrity," Harvard Business Review, Volume 72 Issue 3:
In the face of declining revenues, shrinking market share, and an increasingly competitive market . . . management attempted
to spur performance of its auto centers. . . . The automotive service advisers were given product-specific sales quotas—sell so
many springs, shock absorbers, alignments, or brake jobs per shift—and paid a commission based on sales. . . . Failure to meet
quotas could lead to a transfer or a reduction in work hours. Some employees spoke of the "pressure, pressure, pressure" to
bring in sales.
This pressure-cooker atmosphere created conditions under which employees felt that the only way to satisfy top management
was by selling products and services to customers that they didn't really need.
Suppose all automotive repair businesses routinely followed the practice of attempting to sell customers unnecessary parts
and services.
which of the following statements is true?

a. if all automotive service shops routinely tried to sell parts and services to customers that they didn't really need most
customers would eventually figure it out
b. if all automotive service shops routinely tried to sell parts and services to customers that they didn't really need the
customers would not be able to figure this out
c. customers would then be reluctant to accept the word of the service representative even when there is a legitimate problem
d. customers would accept the word of the service representative even when there is no legitimate problem
28. Consumers and attorney generals in more than 40 states accused a prominent nationwide chain of auto repair shops of a
misleading customers and selling them unnecessary parts and services, from brake jobs to front-end alignments. Lynn
Sharpe Paine reported the situation as follows in "Managing for Organizational Integrity," Harvard Business Review,
Volume 72 Issue 3:
In the face of declining revenues, shrinking market share, and an increasingly competitive market . . . management
attempted to spur performance of its auto centers. . . . The automotive service advisers were given product-specific
sales quotas—sell so many springs, shock absorbers, alignments, or brake jobs per shift—and paid a commission based
on sales. . . . Failure to meet quotas could lead to a transfer or a reduction in work hours. Some employees spoke of the
"pressure, pressure, pressure" to bring in sales.
This pressure-cooker atmosphere created conditions under which employees felt that the only way to satisfy top
management was by selling products and services to customers that they didn't really need.
Suppose all automotive repair businesses routinely followed the practice of attempting to sell customers unnecessary
parts and services.
will this behavior probably affect profits and employment in the automotive service industry
a. yes
b. no
29. Suppose that you have been given a summer job as an intern at Issac Aircams, a company that manufactures period
sophisticated spy cameras for remote-controlled military reconnaissance aircraft. The company, which is privately
owned, has approached a bank for a loan to help it finance its growth. The bank requires financial statements before
approving such a loan. You have been asked to help prepare the financial statements and were given the following list
of costs:
Required:
Classify the below costs as either product costs or period costs for the purpose of preparing the financial statements
for the bank.
depreciation on salespersons' cars

30. Suppose that you have been given a summer job as an intern at Issac Aircams, a company that manufactures product
of costs:
Required:
for the bank.
rent on equipment used in the factory

of costs:
Required:
for the bank.
lubricants used for machine maintenance

of costs:
Required:
for the bank.
salaries of personnel who work in the finishing goods warehouse

of costs:
Required:
for the bank.
soap and paper towels used by factory workers at the end of a shift
of costs:
Required:
for the bank.
factory supervisors' salaries

of costs:
Required:
for the bank.
heat, water, and power consumed in the factory

of costs:
Required:
for the bank.
materials used for boxing products for shipments oversees (units are not normally boxed)
of costs:
Required:
for the bank.
advertising costs
of costs:
Required:
for the bank.
workers' compensation insurance for factory employees

of costs:
Required:
for the bank.
depreciation on chairs and tables in the factory lunchroom

of costs:
Required:
for the bank.
the wages of the receptionist in the administrative offices

of costs:
Required:
for the bank.
cost of leasing the corporate jet used by the company's executives

of costs:
Required:
for the bank.
the cost of renting rooms at a florida resort for the annual sales conference
of costs:
Required:
for the bank.
the cost of packaging the company's product

44. The PC Works assembles custom computers from components supplied by various manufacturers. The company is very a
small and its assembly shop and retail sales store are housed in a single facility in a Redmond, Washington, industrial
park. Listed below are some of the costs that are incurred at the company.
indicate the appropriate classification for the cost listed below

select all that apply
the cost of a hard drive installed in a computer

a. direct materials cost
b. selling cost
c. administrative cost
d. manufacturing overhead cost
e. direct labor cost
45. The PC Works assembles custom computers from components supplied by various manufacturers. The company is very b
small and its assembly shop and retail sales store are housed in a single facility in a Redmond, Washington, industrial
park. Listed below are some of the costs that are incurred at the company.

the cost of advertising in the Puget Sound Computer User newspaper

b. selling cost
46. The PC Works assembles custom computers from components supplied by various manufacturers. The company is very small e
and its assembly shop and retail sales store are housed in a single facility in a Redmond, Washington, industrial park. Listed
below are some of the costs that are incurred at the company.

the wages of employees who assemble computers from components

b. selling cost
47. The PC Works assembles custom computers from components supplied by various manufacturers. The company is very small b

sales commissions paid to the company's salespeople

b. selling cost
48. The PC Works assembles custom computers from components supplied by various manufacturers. The company is very small d

the wages of the assembly shop's supervisor

b. selling cost
49. The PC Works assembles custom computers from components supplied by various manufacturers. The company is very small c

wages of the company's accountant

b. selling cost
c administrative cost
50. The PC Works assembles custom computers from components supplied by various manufacturers. The company is very small d

depreciation on equipment used to test assembled computers before release to customers

b. selling cost
51. The PC Works assembles custom computers from components supplied by various manufacturers. The company is very small b
and its assembly shop and retail sales store are housed in a single facility in a Redmond, Washington, industrial park. Listed c
below are some of the costs that are incurred at the company. d

rent on the facility in the industrial part

b. selling cost
52. Classify each cost as either variable or fixed with respect to the number of units produced and sold. Also classify each cost as a
a selling and administrative cost or a product cost. a
hamburger buns in a Wendy's outlet?

a. variable
b. fixed
a product cost
b. selling and administrative cost
53. advertising by a dental office b
a. variable b
b. fixed
a. product cost
54. apples processed and canned by Del Monte a
a. variable a
b. fixed
a. product cost
55. shipping canned apples from a Del Monte plant to customers a
b
a. variable
b. fixed
a. product cost
56. insurance on a Bausch and Lomb factory producing contact lenses b
a. variable a
b. fixed
a. product cost
57. insurance on IBM's corporate headquarters b
a. variable b
b. fixed
a. product cost
58. Salary of a supervisor overseeing production of printers at Hewlett-Packard b
a. variable a
b. fixed
a. product cost
59. commissions paid to Encyclopedia Britannica salespersons a
a. variable b
b. fixed
a. product cost
60. Depreciation of factory lunchroom facilities at a General Electric plant b
a. variable a
b. fixed
a. product cost
61. Steering wheels installed in BMW's a
a. variable a
b. fixed
a. product cost
62. Wollogong Group Ltd. of New South Wales, Australia, acquired its factory building about 10 years ago. For several years, the c
company has rented out a small annex attached to the rear of the building. The company has received a rental income of d
$30,000 per year on this space. The renter's lease will expire soon, and rather than renewing the lease, the company has b
decided to use the space itself to manufacture a new product.
Direct materials cost for the new product will total $80 per unit. To have a place to store finished units of product, the
company will rent a small warehouse nearby. The rental cost will be $500 per month. In addition, the company must rent
equipment for use in producing the new product; the rental cost will be $4,000 per month. Workers will be hired to
manufacture the new product, with direct labor cost amounting to $60 per unit. The space in the annex will continue to be
depreciated on a straight-line basis, as in prior years. This depreciation is $8,000 per year.
Advertising costs for the new product will total $50,000 per year. A supervisor will be hired to oversee production; her salary
will be $1,500 per month. Electricity for operating machines will be $1.20 per unit. Costs of shipping the new product to
customers will be $9 per unit.
To provide funds to purchase materials, meet payrolls, and so forth, the company will have to liquidate some temporary
investments. These investments are presently yielding a return of about $3,000 per year.
Required:
For each of the costs associated with the new product decision, indicate whether it would be variable or fixed. If it is a product
cost, indicate whether it would be direct materials, direct labor or a manufacturing overhead cost. If it is not a product cost,
indicate whether it is a period, opportunity or a sunk cost. Select "None" if none of the categories apply for a particular item.
NOTE: Opportunity cost is a special category, and to avoid confusion, do not attempt to classify the cost in any other way
except as an opportunity cost.
Rental revenue forgone, 30,000 per year
cost behavior
a. fixed cost
b. variable cost
c. none
product cost classification

a. direct materials
b. manufacturing overhead
c. direct labor
d. none
non-product classification
a. period cost
b. opportunity cost
c. sunk cost
d. none
63. Wollogong Group Ltd. of New South Wales, Australia, acquired its factory building about 10 years ago. For several years, the b
company has rented out a small annex attached to the rear of the building. The company has received a rental income of a
$30,000 per year on this space. The renter's lease will expire soon, and rather than renewing the lease, the company has d
Required:
direct materials cost, $80 per unit

cost behavior
a. fixed cost
b. variable cost
c. none

a. direct materials
c. direct labor
d. none
a. period cost
b. opportunity cost
c. sunk cost
d. none
64. Wollogong Group Ltd. of New South Wales, Australia, acquired its factory building about 10 years ago. For several years, the a
$30,000 per year on this space. The renter's lease will expire soon, and rather than renewing the lease, the company has a
Required:
rental cost of warehouse, $500 per month
cost behavior
a. fixed cost
b. variable cost
c. none

a. direct materials
c. direct labor
d. none
a. period cost
b. opportunity cost
c. sunk cost
d. none
company has rented out a small annex attached to the rear of the building. The company has received a rental income of b
Required:
rental cost of equipment, $4000 per month
cost behavior
a. fixed cost
b. variable cost
c. none

a. direct materials
c. direct labor
d. none
a. period cost
b. opportunity cost
c. sunk cost
d. none
company has rented out a small annex attached to the rear of the building. The company has received a rental income of c
Required:
direct labor cost, $60 per unit
cost behavior
a. fixed cost
b. variable cost
c. none

a. direct materials
c. direct labor
d. none
a. period cost
b. opportunity cost
c. sunk cost
d. none
$30,000 per year on this space. The renter's lease will expire soon, and rather than renewing the lease, the company has c
Required:
depreciation of the annex space $8000 per year
cost behavior
a. fixed cost
b. variable cost
c. none

a. direct materials
c. direct labor
d. none
a. period cost
b. opportunity cost
c. sunk cost
d. none
Required:
advertising cost 50,000 per year
cost behavior
a. fixed cost
b. variable cost
c. none

a. direct materials
c. direct labor
d. none
a. period cost
b. opportunity cost
c. sunk cost
d. none
Required:
electricity for machines, 1.20 per unit
cost behavior
a. fixed cost
b. variable cost
c. none

a. direct materials
c. direct labor
d. none
a. period cost
b. opportunity cost
c. sunk cost
d. none
Required:
supervisor's salary $1500 per month
cost behavior
a. fixed cost
b. variable cost
c. none

a. direct materials
c. direct labor
d. none
a. period cost
b. opportunity cost
c. sunk cost
d. none
Required:
shipping cost, $9 per unit
cost behavior
a. fixed cost
b. variable cost
c. none

a. direct materials
c. direct labor
d. none
a. period cost
b. opportunity cost
c. sunk cost
d. none
72. Wollogong Group Ltd. of New South Wales, Australia, acquired its factory building about 10 years ago. For several years, the c
$30,000 per year on this space. The renter's lease will expire soon, and rather than renewing the lease, the company has b
Required:
return earned on investments $3000 per year
cost behavior
a. fixed cost
b. variable cost
c. none

a. direct materials
c. direct labor
d. none
a. period cost
b. opportunity cost
c. sunk cost
d. none
73. electricity to run production equipment a
b
variable b
a. yes a
b. no
fixed
a. yes
b. no
direct
a. yes
b. no
indirect
a. yes
b. no
74. rent on a factory building b
a
variable b
a. yes a
b. no
fixed
a. yes
b. no
direct
a. yes
b. no
indirect
a. yes
b. no
75. cloth used to make drapes a
b
variable a
a. yes b
b. no
fixed
a. yes
b. no
direct
a. yes
b. no
indirect
a. yes
b. no
76. production superintendent's salary b
a
variable b
a. yes a
b. no
fixed
a. yes
b. no
direct
a. yes
b. no
indirect
a. yes
b. no
77. wages of laborers assembling a product a
b
variable a
a. yes b
b. no
fixed
a. yes
b. no
direct
a. yes
b. no
indirect
a. yes
b. no
78. depreciation of air purification equipment used to make furniture b
a
variable b
a. yes a
b. no
fixed
a. yes
b. no
direct
a. yes
b. no
indirect
a. yes
b. no
79. janitorial salaries b
a
variable b
a. yes a
b. no
fixed
a. yes
b. no
direct
a. yes
b. no
indirect
a. yes
b. no
80. peaches used in canning fruit a
b
variable a
a. yes b
b. no
fixed
a. yes
b. no
direct
a. yes
b. no
indirect
a. yes
b. no
81. lubricants for production equipment a
b
b
variable a
a. yes
b. no
fixed
a. yes
b. no
direct
a. yes
b. no
indirect
a. yes
b. no
82. sugar used in soft-drink production a
b
variable a
a. yes b
b. no
fixed
a. yes
b. no
direct
a. yes
b. no
indirect
a. yes
b. no
83. property taxes on the factory b
a
variable b
a. yes a
b. no
fixed
a. yes
b. no
direct
a. yes
b. no
indirect
a. yes
b. no
84. wages of workers painting a product a
b
variable a
a. yes b
b. no
fixed
a. yes
b. no
direct
a. yes
b. no
indirect
a. yes
b. no
85. depreciation on cafeteria equipment b
a
variable b
a. yes a
b. no
fixed
a. yes
b. no
direct
a. yes
b. no
indirect
a. yes
b. no
86. insurance on a building used in producing helicopters b
a
variable b
a. yes a
b. no
fixed
a. yes
b. no
direct
a. yes
b. no
indirect
a. yes
b. no
87. cost of rotor blades used in producing helicopters a
b
variable a
a. yes b
b. no
fixed
a. yes
b. no
direct
a. yes
b. no
indirect
a. yes
b. no
88. an elmer's glue factory a
a. process costing
b. job-order costing
c. either/or
89. a textbook published such as McGraw-Hill b
a. process costing
c. either/or
90. an Exxon oil refinery a
a. process costing
c. either/or
91. a facility that makes Minute Maid frozen orange juice a
a. process costing
c. either/or
92. a Scott paper mill a
a. process costing
c. either/or
93. a custom home builder b
a. process costing
c. either/or
94. a shop that customizes vans b
a. process costing
c. either/or
95. a manufacturer of specialty chemicals a
a. process costing
c. either/or
96. an auto repair shop b
a. process costing
c. either/or
97. a firestone tire manufacturing plant a
a. process costing
c. either/or
98. an advertising agency b
a. process costing
c. either/or
99. a law office b
a. process costing
c. either/or

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Accounting 2200

Study online at quizlet.com/_bo3in

g. supply chain management

which of the following statements is true?

depreciation on salespersons' cars

rent on equipment used in the factory

lubricants used for machine maintenance

salaries of personnel who work in the finishing goods warehouse

factory supervisors' salaries

heat, water, and power consumed in the factory

workers' compensation insurance for factory employees

depreciation on chairs and tables in the factory lunchroom

the wages of the receptionist in the administrative offices

cost of leasing the corporate jet used by the company's executives

the cost of packaging the company's product

indicate the appropriate classification for the cost listed below

the cost of a hard drive installed in a computer

indicate the appropriate classification for the cost listed below

the cost of advertising in the Puget Sound Computer User newspaper

indicate the appropriate classification for the cost listed below

the wages of employees who assemble computers from components

indicate the appropriate classification for the cost listed below

sales commissions paid to the company's salespeople

indicate the appropriate classification for the cost listed below

the wages of the assembly shop's supervisor

indicate the appropriate classification for the cost listed below

wages of the company's accountant

indicate the appropriate classification for the cost listed below

depreciation on equipment used to test assembled computers before release to customers

indicate the appropriate classification for the cost listed below

rent on the facility in the industrial part

hamburger buns in a Wendy's outlet?

Rental revenue forgone, 30,000 per year

product cost classification

direct materials cost, $80 per unit

product cost classification

rental cost of warehouse, $500 per month

product cost classification

rental cost of equipment, $4000 per month

product cost classification

direct labor cost, $60 per unit

product cost classification

depreciation of the annex space $8000 per year

product cost classification

advertising cost 50,000 per year

product cost classification

electricity for machines, 1.20 per unit

product cost classification

supervisor's salary $1500 per month

product cost classification

shipping cost, $9 per unit

product cost classification

return earned on investments $3000 per year

product cost classification

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