Please help! I have my midterm coming up. Just doing a few review problems that
ID: 2435478 • Letter: P
Question
Please help! I have my midterm coming up. Just doing a few review problems that aren't required. Thanks!
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1. Which of the following statements about short-term decisions is false?
A.
Short-term decisions are made within the period covered by the current annual budget, generally less than a year.
B.
Short-term decisions are derived from the mission statement and strategic plan.
C.
Once we develop the annual plan, we make “short-run” decisions to either keep the company on track or to take advantage of unforeseen opportunities.
D.
Short-run decisions are usually limited by resource constraints that we can only change over the long run.
E.
All of the above statements are correct.
2.
Which of the following statements about the calculation of product costs using traditional volume based measures is INCORRECT?
A.
Traditional volume-based costing uses a single cost pool for each responsibility center or the entire factory.
B.
Overhead is allocated using a single volume cost driver like direct labor hours.
C.
Direct Materials and Direct Labor are allocated using volume based cost drivers.
D.
Product costs consist of Direct Materials plus Direct Labor plus volume based overhead.
E.
All of the above correctly describe product costing systems using traditional volume-based accounting systems.
3.
Which of the following statements about the calculation of product costs using traditional volume based measures is INCORRECT?
A.
Traditional volume-based costing uses a single cost pool for each responsibility center or the entire factory.
B.
Overhead is allocated using a single volume cost driver like direct labor hours.
C.
Direct Materials and Direct Labor are allocated using volume based cost drivers.
D.
Product costs consist of Direct Materials plus Direct Labor plus volume based overhead.
E.
All of the above correctly describe product costing systems using traditional volume-based accounting systems.
4.
Which of the following statements is NOT a weakness of Segment reporting systems?
A.
Common costs are difficult to allocate based upon cause and effect.
B.
Segments often influence each other’s performance.
C.
Failure to identify direct segment costs.
D.
All accounting measures are subject to errors and may be estimates.
E.
All of the above statements are correct.
1. Which of the following statements about short-term decisions is false?
A.
Short-term decisions are made within the period covered by the current annual budget, generally less than a year.
B.
Short-term decisions are derived from the mission statement and strategic plan.
C.
Once we develop the annual plan, we make “short-run” decisions to either keep the company on track or to take advantage of unforeseen opportunities.
D.
Short-run decisions are usually limited by resource constraints that we can only change over the long run.
E.
All of the above statements are correct.
Explanation / Answer
1.Statement B is incorrect.
Strategic plan is a well-defined plan aimed at creating a desired future . In contrast , Long term plan is aimed at meeting estimated future needs .
A Mission statement is a brief description of a company’s fundamental purpose.
Hence, Short term plans are derived from long term plans and not mission statements.
2.All of the above statements are correct about traditional variable product costing.
3.All the above statements are correct.