QUESTION NO: 1
Place the correct label against each item to categorise the cost of the item within the quality cost framework.
Place the correct label against each item to categorise the cost of the item within the quality cost framework.
Correct Answer:
QUESTION NO: 2
Which THREE of the following are never relevant costs for short-term decision making?
Which THREE of the following are never relevant costs for short-term decision making?
Correct Answer: B,C,D
Vote an answer
QUESTION NO: 3
Which of the following, regarding costing methods, is true?
Which of the following, regarding costing methods, is true?
Correct Answer: D
Vote an answer
QUESTION NO: 4
A special contract requires 640 units of component T.
The inventory of 280 units of component T cost $0.20 per unit but the component is not currently used by the company.
The current market price of component T is $0.24 per unit but the inventory could be sold for $0.15 per unit.
The relevant cost of the units of component T required for the special contract is:
A special contract requires 640 units of component T.
The inventory of 280 units of component T cost $0.20 per unit but the component is not currently used by the company.
The current market price of component T is $0.24 per unit but the inventory could be sold for $0.15 per unit.
The relevant cost of the units of component T required for the special contract is:
Correct Answer: A
Vote an answer
QUESTION NO: 5
MDS is facing a temporary shortage of Material H which is used to produce all three of its products.
In order to maximise its profitability, which product should be manufactured first?
MDS is facing a temporary shortage of Material H which is used to produce all three of its products.
In order to maximise its profitability, which product should be manufactured first?
Correct Answer: B
Vote an answer
QUESTION NO: 6
A manager in your organisation says, "I have spare capacity and I need a unit cost as a basis for pricing a special one-off contract. You have provided me with a relevant cost of $6.50 per unit and a full production cost of $8.00 per unit. Please explain which unit cost I should use." Which cost should be used in this decision and why?
A manager in your organisation says, "I have spare capacity and I need a unit cost as a basis for pricing a special one-off contract. You have provided me with a relevant cost of $6.50 per unit and a full production cost of $8.00 per unit. Please explain which unit cost I should use." Which cost should be used in this decision and why?
Correct Answer: A
Vote an answer
QUESTION NO: 7
Your company want to know how many units they'd have to sell this season to break even. However, you have some reservations over whether or not breakeven analysis is suitable for the company.
Which of these assumptions over product range limit the accuracy of break even analysis? Select ALL that apply.
Your company want to know how many units they'd have to sell this season to break even. However, you have some reservations over whether or not breakeven analysis is suitable for the company.
Which of these assumptions over product range limit the accuracy of break even analysis? Select ALL that apply.
Correct Answer: D,F
Vote an answer
QUESTION NO: 8
The manager of a recently opened cafe is deciding how many sandwiches to make each day.
The sandwiches are made in the morning before the cafe opens.
If demand exceeds the number of sandwiches made in the morning no extra sandwiches can be made during the day. Any unsold sandwiches are thrown away at the end of each day.
Daily demand is uncertain but is predicted to be 10, 20, 30 or 40 sandwiches.
The following regret matrix has been prepared:
If the minimax regret criterion is used to make the decision, the manager will choose to make:
The manager of a recently opened cafe is deciding how many sandwiches to make each day.
The sandwiches are made in the morning before the cafe opens.
If demand exceeds the number of sandwiches made in the morning no extra sandwiches can be made during the day. Any unsold sandwiches are thrown away at the end of each day.
Daily demand is uncertain but is predicted to be 10, 20, 30 or 40 sandwiches.
The following regret matrix has been prepared:
If the minimax regret criterion is used to make the decision, the manager will choose to make:
Correct Answer:
20 Sandwiches