Principles of Accounting II Exam 1 -2010 Version 1-16. Decentralization refers to: A. reporting for the company as a whole. B. focusing reporting on parts of the company. C. the delegation of decision-making authority throughout an organization. D. differences in organizations. 2-21. Dorra Corporation manufactures lawnmowers in five work stations. Dorra's weekly demand is 5,000 mowers but Dorra can only produce 4,200. According to the theory of constraints, to increase production output
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CHAPTER 15 ALLOCATION OF SUPPORT DEPARTMENT COSTS, COMMON COSTS, AND REVENUES TRUE/FALSE 1. The dual cost-allocation method classifies costs into two pools, a budgeted cost pool and an actual cost pool. Difficulty: 1 Objective: 1 Terms to Learn: dual-rate cost-allocation method The dual cost-allocation method classifies costs into two pools, a variable cost pool and a fixed cost pool. 2. Using the single-rate method transforms the fixed costs per hour into a variable cost to users
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produce and how they behave with respect to various elevations of marginal revenue. In my attempt it will be appropriate for me to clarify the definitions of various economic terms in order to assure a proper understanding of my thoughts on this topic, I will provide these definitions throughout. Understanding the concept of profit maximization lies with the explanation of total revenue to total cost and marginal revenue to marginal cost. Total revenue is nothing more than the total quantity of
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huge sums of money may easily tempt people of a greedy nature. Accounting crimes do not involve guns and breaking into houses, and greedy people may consider it a friendly form of theft. Money is the only item that does not experience diminishing marginal utility; those who have money want and yearn for more. Accountants
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stable clientele and profitable operations the establishment is now going through a period of low profitability. After analyzing the costing system of the company and designing a new pricing model with the purpose of remaining as profitable as in the past while continuing to attract new clients; the main findings were: Strengths and limitations of the current costing model o Simplicity – Very easy to calculate and distribute cost between residents and apartments (strength) o Out of date – It did not
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LEVERAGE ANALYSIS Leverage arises from the presence of fixed costs in a firm’s cost structure. Two types of leveragea) Operating Leverage and b) Financial Leverage. •Operating leverage arises from fixed operating costs (depreciation, salaries, advertisement etc). •Financial leverage from the presence of fixed financing costs such as interest. Concepts that enhance our understanding of risk... 1) Operating Leverage - affects a firm’s business risk. 2) Financial Leverage - affects a firm’s
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112 $784.00 $(333.00) $6.00 140 $840.00 $(410.00) $5.00 160 $800.00 $(465.00) Is demand elastic or inelastic over this range of 5-8? Elastic What price would you recommend for hot dogs? $7, net revenue is at a maximum To Calculate Marginal Cost Estimate: change in total cost (variable)/ change in quantity for each price Assume: unit price= $5 unit variable cost= -$3 fixed cost= $-100 budgeted volume= 100 units fixed cost per unit $100/100= -$1 full cost per unit= $3+$1=$4 S=P
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_______________ is primarily concerned with the preparation of financial information for specific purposes, usually for internal users. Selected Answer: Managerial accounting Answers: Managerial accounting Financial accounting Cost accounting Revenue cycle Question 2 20 out of 20 points In accouting, Duality means: Selected Answer: Assets = Liabilities + Equity Answers: Assets = Equity Equity = Assets + Liabilities Assets = Liabilities
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Operations Decision ECO/550 Operations Decision In observation of local and global businesses, operations decisions are important to determine if the organization has sufficient cash and resources to maintain existence. Organizations often employ professional consultants to evaluate operations deficiencies, including the preparation of cost analysis to better gauge if the company should shut down completely, maintain operations for short-term or long-term basis. This evaluation gives
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through better product and process design. The full cost analysis is based on the assumption that overhead costs are variable with cost object. For example, the supervision, quality control, and rent costs that are considered overhead costs for costing each job, but they are direct costs for the PrePress department. Besides, because the cost driver is used as the cost-allocation base in each job cost pool, another assumption is that there is a cause-and –effect relationship between cost drivers
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