Lackawanna ACC220 Module 7 Quiz Latest 2021 November

ACC220 Managerial Accounting

Module 7 Quiz  

Question 1The amount of increase or decrease in revenue that is expected from a particular course of action as compared with an alternative is

a. manufacturing margin

b. contribution margin

c. differential cost

d. differential revenue

Question 2 A cost that will not be affected by later decisions is termed a(n)

  sunk cost

  period cost

  differential cost

  replacement cost

 Question 3The amount of income that would result from an alternative use of cash is called:

  opportunity cost

  differential income

  sunk cost

  differential revenue

 Question 4Yasmin Co. can further process Product B to produce Product C. Product B is currently selling for $30 per pound and costs $28 per pound to produce. Product C would sell for $55 per pound and would require an additional cost of $31 per pound to produce. What is the differential cost of producing Product C?

   $31 per pound

  $30 per pound

  $28 per pound

  $55 per pound

 Question 5A practical approach that is frequently used by managers when setting normal long-run prices is the

  cost-plus approach

  economic theory approach

  price graph approach

  price skimming

Question 6Decisions to install new equipment, replace old equipment, and purchase or construct a new building are examples of

  capital investment analysis

  sales mix analysis

  variable cost analysis

  variable cost analysis

 Question 7Which of the following are two methods of analyzing capital investment proposals that both ignore present value?

  average rate of return and cash payback method

  internal rate of return and average rate of return

  net present value and average rate of return

  internal rate of return and net present value

 Question 8The primary advantages of the average rate of return method are its ease of computation and the fact that

it is especially useful to managers whose primary concern is liquidity

  it emphasizes the amount of income earned over the life of the proposal

  it is especially useful to managers whose primary concern is liquidity

  there is less possibility of loss from changes in economic conditions and obsolescence when the commitment is short-term

  rankings of proposals are necessary

 Question 9The expected average rate of return for a proposed investment of $6,000,000 in a fixed asset, using straight-line depreciation, with a useful life of 20 years, no residual value, and an expected total net income of $12,000,000 over the 20 years is

  20%

  10%

  40%

  5%

 Question 10Which method of evaluating capital investment proposals uses present value concepts to compute the rate of return from the net cash flows?

  internal rate of return method

  cash payback method

  net present value method

  average rate of return method