Final B3

Question 1

What is not an example of a cost driver?

Answer 1

Volume-based production

Question 2

What type of costs is Redesign of process?

Answer 2

Prevention costs

Question 3

What is a techniques effectively measures improvements in product quality as a result of internal failure costs?

Answer 3

Tracking the number of products reworked

Question 4

What is an explanation for improved ROA?

Answer 4

The company was more efficient in it use of assets

Question 5

What is not included in a performance report?

Answer 5

Strategic plan

Question 6

How do you calc ROE?

Answer 6

NI/E OR

Net profit margin(NI/S)* Asset turnover(Sales/assets) * FL(Assets*Equity)

Question 7

define product cost

Answer 7

cost assigned to goods that were either purchase or manufactured for resale

Question 8

Define relevant range

Answer 8

The range over which cost relationships are valid

Question 9

Is activity based costing allowable for external reporting?

Answer 9

No but Job costing is

Question 10

How does activity based costing refine cost information?

Answer 10

It Emphasizes LT product analysis (When fixed costs become variable costs)

Question 11

What company would benefit the most from using ABC system?

Answer 11

When indirect costs are a high percentage of total costs

Question 12

Describe a fishbone diagram

Answer 12

Describes a process, the contributions to the process, and the potential problems that could occur at each phase of a process

Question 13

What is a financial measure of success in a balance scorecard?

Answer 13

Sales growth

Question 14

What is the chart that is used to determine zero defects and goalpost conformance?

Answer 14

Control chart

Question 15

Define Controllable margin

Answer 15

Contribution margin net of controllable fixed costs

Question 16

What are appraisal costs and what are some examples of Appraisal costs?

Answer 16

Costs to detect individual products that do not conform to specification

Ex:

• Statistical quality checks
• Inspections
• Testing
• Maintenance of lab

Question 17

What part of the balance scorecard is related to employee satisfaction?

Answer 17

Learning and growth

Question 18

What ratio would you use to evaluate profitability of companies of different sizes?

Answer 18

ROA (NI/avg assets)

Question 19

What method would be best suited to value performance a firms capital in any year?

Answer 19

Economic value added

=

Net Operating Profit After Taxes(NOPAT) and compare to Required return for capital

Question 20

What is residual income

Answer 20

Income in excess of Desired minimum return

Question 21

What is the formula for residual income?

Answer 21

Net income

LESS required return(NBV*hurdle rate)

Question 22

What is the formula of economic value added

Answer 22

after tax income

LESS: required return

Question 23

Why is residual income a better performance evaluation over ROI?

Answer 23

RI measures actual dollars of an investment over its ROR

Desirable investment decisions will not be neglected by high-return divisions

Question 24

What costs would decrease if production levels were increase within the relevant range?

Answer 24

Fixed costs per unit

Question 25

What are the 4 components of a balance scorecard?

Answer 25

1. Learning and growth - HR/People
2. Customer satisfaction
3. Financial
4. Production - efficient

company should run better and profitably