Bender Day 19 Flashcards
What costs are included in inventory carrying costs?
All costs associated with warehousing (storing) inventory and holding inventory
- Storage
- Insurance
- Obsolescence and Spoilage
MCQ-04171
A company invests in a property for $100k. They have a contract to sell it for $120k in one year. The bank has a guaranteed interest rate of 10%, what is the NPV?
NPV = 100,000 + 120,000 / 1.10¹
= 9,091
MCQ-08547
An organization installed an uninterrupted power supply, what type of control is this?
Physical Control - Monitor and control the environment of the workplace and computing facilities
MCQ-13036
Define: General Control
Are designed to ensure that the organizations control environment is stable and well managed
MCQ-13036
Types of reporting risk that an accountant must recognize as that’s to accuracy of reports:
- Strategic risk - picking the wrong technology
- Financial risk - losing financial responses, lost, stolen, etc.
- Information risk - such as a loss of data integrity
Note: Data Integrity Risk is not a thing
MCQ-03483
Equation: Contribution Margin
Selling Price - Variable Costs
MCQ-08297
After a B2B transaction occurs, what system keeps track of what goods were ordered, where to be delivered and how much was paid?
Supply chain MGMT system
MCQ-14582
ABC Inc purchased an asset for $100k, they use SL depreciation over 10 years, their annual tax rate is 40%, what is their annual depreciation tax shield from the asset ?
10,000 * .4 = 4,000
MCQ-04280
Equation: Operating Profit Margin
EBIT Margin = EBIT / Sales
Add back Interest and Taxes to Net Income
MCQ-04345
5 Components of ERM and the 20 Principles
*GO PRO
Governance & Culture - DOVES
- Desired culture
- board Oversight
- Values
- Employees (attracts, develops, retains)
- operating Structure
Objective-Setting - SOAR
- alternative Strategies “what is the vision”
- Objectives
- Analyze business context
- Risk appetite.
Performance - VAPIR
- portfolio View - Parent level
- Assesses severity of risk
- Prioritize risk
- Identifies risk
- implement Responses to risk
Review/Revision - SIR
- assesses Substantial change
- Improvements
- Reviews risk and performace
Ongoing Info., Comm., & Reporting - TIP
- leverages Technology
- communicates risk Information
- reports on risk, culture, & Performance
MCQ-06260
According to SOX, the audit committee is not required to
Evaluating and reporting on the effectiveness of the company’s internal control over financial reporting
The hired public acctg firm does this
MCQ-14818
Define: Residual Risk
The risk that remains after MGMT responds to the risk
MCQ-06762
NAFTA offers trading partners operating within its boundaries a reduction on tariffs in exchange for compliance limits on imported labor and materials, this is known as:
Sourcing requirement
MCQ-06106
If the NPV for a project is positive than
Rate of Return for this project is greater than the discount percentage used in the NPV calculation
MCQ-03337
When do differentiation strategies fail?
The value of the firms differentiation premium does not exceed it’s cost
If a firm must pay a higher cost for the premium related to the differentiation than it is able to recoup in the market for that feature, then its profits will decrease, the firm will lose competitive advantage, and the differentiation strategy will fail
MCQ-03609
Fixed Overhead costs are charged to Inventory when while using Variable and Absorption Costing methods?
Variable - Fixed OH is charged to the period they are incurred
Absorption - Fixed OH is included in inventory costs
MCQ-07734
True or False: When inventory increases over the period, Variable Net Income will exceed Absorption Net Income
FALSE
Under Variable, Fixed OH will hit the IS in the period incurred
Under Absorption, an increase in inventory results in more costs (Fixed OH) remaining on the BS = Absorption will produce a higher Net Income in the case
MCQ-07734
Equation: Contribution Margin per Unit
= Sales Price per unit – Variable Cost per unit
MCQ-04263
Equation: Breakeven Point in Units
What you want to cover (WWC)
= Total Fixed Costs / Contribution Margin per unit
MCQ-04263
Equation: Selling Price per Unit
Setting Selling Prices Based on Assumed Volume
= (Fixed Costs + Variable Costs + Pretax Profit) / Number of Units Sold
MCQ-04258
The impact of government price support program would most likely result in:
Lead to Surpluses
A government price support program acts as a SUBSIDY that will encourage suppliers to increase supply beyond equilibrium point
MCQ-03735
Equation: Working Capital
How do you strengthen and weaken WC?
= CA - CL
WC is strengthened by:
- ↑ CA or ↓ CL
- Speeding up collections
- Slowing down payments
- Hold Cash Longer!
TBS-002342
Equation: Sales Units Needed to obtain a Desired Profit
Sales (units) = (Fixed Costs + Pretax Profit) / Contribution Margin per Unit
MCQ-12448
Define: Revenue Variance
A Revenue Variance (aka: Sales Price Variance) os due to the change in unit selling price
MCQ-04145