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ACCT 1B Exam 4 Review - Part 1 Flashcards | StudBud
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ACCT 1B Exam 4 Review - Part 1
ACCT 1B Exam 4 Review - Part 1
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Answers
1
An opportunity cost:
Is an unavoidable cost because it remains the same
Is the potential benefit lost by taking a specific action.
Results from past managerial decisions.
Requires a future outlay of cash.
2
To determine a product selling price based on the total cost method, management should include:
Total product and selling, general, and administrative costs only.
Total product costs plus a markup.
Total product and selling, general, and administrative costs plus a markup.
Total selling, general, and administrative costs plus a markup.
3
A cost that requires a future outlay of cash and is relevant for decision making, is a(n):
Operating cost.
Out-of-pocket cost.
Sunk cost.
Opportunity cost.
4
An estimate of an asset's value to the company, calculated by discounting the future cash flows is known as:
Unamortized carrying value.
Annual net cash flows.
Payback period.
Net present value.
5
A cost that cannot be avoided or changed because it arises from a past decision is called a(n):
Incremental cost.
Uncontrollable cost.
Sunk cost.
Opportunity cost.
6
Which of the following cash flows is
not
considered when using the net present value method?
Future cash inflows.
Past cash outflows.
Future cash outflows.
Non-uniform cash inflows.
7
Nonfinancial information such as environmental and social data are important for managerial decision making.
False
True
8
An additional cost from selecting a certain course of action is a(n):
Incremental cost.
Pocket cost.
Discount cost.
Period cost.
9
Which of the following method(s) considers the time value of money in evaluating alternative capital expenditures?
Accounting rate of return.
Accounting rate of return and Payback period.
Net present value.
Payback period.
10
A business segment should be eliminated if income decreases from elimination.
True
False
11
A sunk cost can be changed depending on the results of future decisions.
False
True
12
If the internal rate of return (IRR) of an investment is lower than the hurdle rate, the project should be accepted.
False
True
13
Companies should produce products with the highest contribution margin per unit of constrained resource
True
False
14
Sales mix refers to the combination of products sold by a company.
True
False
15
Projects with shorter payback periods have higher risk of being unprofitable investments over the long run.
False
True
16
The hurdle rate is set at:
The company's cost of capital.
10% above the IRR of current projects.
10% above the ARR of current projects.
The rate at which the company is taxed on income.
