DEVRY ACCT 301 Week 6 Quiz
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<strong>DEVRY</strong> <strong>ACCT</strong> <strong>301</strong> <strong>Week</strong> 6 <strong>Quiz</strong><br />
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t-<strong>301</strong>/acct-<strong>301</strong>-week-6-quiz<br />
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<strong>ACCT</strong> <strong>301</strong> <strong>Week</strong> 6 <strong>Quiz</strong><br />
1. (TCO 9) Which one of the following stages of the management decision-making<br />
process is properly sequenced?<br />
2. (TCO 9) When is incremental analysis most useful?<br />
3. (TCO 9) Which of the following will never be a relevant cost?<br />
4. (TCO 9) A company is deciding whether or not to replace some old equipment<br />
with new equipment. Which of the following is not considered in the incremental<br />
analysis?<br />
5. (TCO 9) It costs Lannon Fields $14 of variable costs and $6 of allocated fixed costs<br />
to produce an industrial trash can that sells for $30. A buyer in Mexico offers to<br />
purchase 2,000 units at $18 each. Lannon has excess capacity and can handle the<br />
additional production. What effect will acceptance of the offer have on net income?<br />
6. (TCO 9) Wishnell Toys can make 1,000 toy robots with the following costs:
Direct Materials $70,000<br />
Direct Labor 26,000<br />
Variable Overhead 15,000<br />
Fixed Overhead 15,000<br />
The company can purchase the 1,000 robots externally for $120,000. The avoidable<br />
fixed costs are $5,000 if the units are purchased externally. What is the cost savings<br />
if the company makes the robots?<br />
7. (TCO 9) All of the following are relevant to the sell or process-further decision,<br />
except for __________<br />
8. (TCO 8) Most of the capital budgeting methods use __________<br />
9. (TCO 8) The capital budgeting decision depends in part on the __________<br />
10. (TCO 8) The cash-payback technique __________<br />
11. (TCO 8) All of the following statements about intangible benefits in capital<br />
budgeting are correct, except that they __________<br />
12. (TCO 8) The profitability index __________.<br />
13. (TCO 8) Post audits of capital projects __________<br />
14. (TCO 8) A company has a minimum required rate of return of 9% and is<br />
considering investing in a project that costs $50,000 and is expected to generate cash<br />
inflows of $20,000 at the end of each year for 3 years. The profitability index for this<br />
project is __________<br />
15. (TCO 8) Disadvantages of the annual rate of return method include all of the<br />
following, except that __________
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