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ACC 3081 Test #2

Multiple Choice
Identify the letter of the choice that best completes the statement or answers the question.
 

1. 

In determing customer profitability, it is important to include:
a.
Selling Costs
c.
R&D Costs
b.
Marketing Costs
d.
All of the above
 
 
 
Customer A
Customer B
Customer C
Sales
$ 1,500,000
$6,000,000
$7,500,000
CM
$525,000
$2,100,00
$2,625,000
Operating Costs
$(225,000)
$(2,300,000)
$(1,400,000)
 

2. 

The return on sales for customer A is:
a.
(20%)
c.
(15%)
b.
20%
d.
15%
 

3. 

Assuming operating costs are fixed, to increase Return on Sales to break even for Customer B, sales must increase by approximately
a.
$200,000
c.
$307,692
b.
$517,429
d.
$1,325,000
 

4. 

All of the following would be reasons to keep cusomer B except:
a.
The synergy between A and B
c.
Operating costs are fixed
b.
Customer B may attract customers
d.
Operating costs are variable.
 

5. 

Contribution margin is:
a.
sales revenue minus cost of goods sold
c.
sales revenue minus fixed costs
b.
sales revenue minus all variable costs
d.
sales revenue minus all costs
 

6. 

In the cost equation, the slope is represented by?
a.
TC
c.
V
b.
F
d.
X
 

7. 

Which of the following is not a customer-related activity?
a.
Processing shipments
c.
Sales contracts
b.
Special packing
d.
All are customer-related
 

8. 

The contribution margin at the breakeven point:
a.
is zero
c.
is less than total fixed costs
b.
is grater than variable costs
d.
equals total fixed costs
 

9. 

Break-even analysis assumes that:
a.
total revenue is constant
c.
unit fixed costs is constant
b.
unit variable cost is constant
d.
all of the above
 

10. 

Which of the following is an internal failure?
a.
Quality evaluations
c.
Inspecting machines
b.
Inspecting materials
d.
Delaying processes
 

11. 

Which of the following statements describes a control chart?
a.
Shows trends in variation in product or service attributes over time by reflecting measures of important quality features taken at defined points in time.
c.
Describes variation in product or service attributes over time by measuring important quality features and comparing maximum and minimum desired levels.
b.
Displays frequency distribution of an attribute's measures around an average attribute value.
d.
Plots two measures that may be related to diagnose cause and effect outcomes and activities that may drive them
 

12. 

Which of the following is a prevention activity?
a.
Field replacements
c.
Process improvement
b.
Warranty repairs
d.
Statistical process control
 

13. 

In the cost equation, which is the cost driver?
a.
TC
c.
V
b.
F
d.
X
 

14. 

Which of the following is an appraisal activity?
a.
Quality evaluations
c.
Warranty repairs
b.
Statistical process control
d.
Field replacements
 

15. 

Which of the following is a external failure?
a.
Restoring reputation
c.
Process improvement
b.
Quality Evaluations
d.
Inspecting processes
 

16. 

The opportunity cost of making a component part in a factory with excess capacity for which there is no alterative use is:
a.
the variable manufacturing cost of the component
c.
the total manufacturing cost of the component
b.
the fixed manufacturing cost of the component
d.
zero
 

17. 

The cost for a salesperson that is paid a flat salary of $500 per month plus a 5% commission on all sales is an example of what type of cost?
a.
Fixed cost
c.
Step cost
b.
Variable cost
d.
Semivariable cost
 

18. 

In the cost equation, which is the independent variable?
a.
TC
c.
V
b.
F
d.
X
 

19. 

In the cost equation, which is the fixed cost?
a.
TC
c.
V
b.
F
d.
X
 

20. 

According to the theory of constraints, bottlenecks can be found in:
a.
the manufacturing process
c.
the market
b.
the distribution process
d.
all of the above
 

Essay
 

21. 

Prepare a quality control chart from the following sequential, weekly cycle-time data from a computer device manufacturer. The desired level of performance is 280. With a range of 320-240. What does the chart indicate? (use either excel or paper to draw the chart and answer the essay portion in the box)

Week
Cycle Time
1
248
2
350
3
295
4
194
5
306
6
264
7
456
8
304
9
224
10
276
 

22. 

Information regarding the processing costs for Holcomb Corp. for the first 6 months of the year is as follows:

Month
Total Processing Costs
Orders Processed
1
188
89
2
137
71
3
108
46
4
198
96
5
117
52
6
105
47

Write the cost equation (regression analysis). And what is the total costs if 80 orders are processed in month 7? (Use excel to regress the data and write the answer in the box)
 

23. 

Riyhad Corp. produces three products. Data concerning the selling prices and the unit costs of the three products appear below:

Fixed Cost
100
   
 
A
B
C
Constraint
Selling Price
40
50
90
 
Variable Costs
30
40
60
 
Demand
25
5
20
 
Machine:
    
A
4
5
10
300
B
5
6
4
300
C
9
5
2
300
D
7
8
4
300

How many of each are we going to make and what will the net income be?
 



 
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