cost-accounting-test-bank-chapter-14

1、Cost Accounting, 15e (Horngren/Datar/Rajan)Chapter 14 Cost Allocation, Customer-Profitability Analysis, and Sales-Variance AnalysisObjective 14.11) Costs which are NOT economically feasible to trace but which are related to a cost object are known as _. A) incremental costs B) marginal costs C) indi

2、rect costs D) variable costs Answer: CDiff: 1Objective: 1AACSB: Analytical thinking2) The reporting and assessment of revenues earned from customers and the costs incurred to earn those revenues is _.A) creditor-age analysisB) customer-profitability analysisC) debtor-cost analysisD) customer-turnove

3、r analysisAnswer: BDiff: 1Objective: 1AACSB: Analytical thinking3) Customer revenues and _ are the determinants of customer profitability.A) customer profileB) customer costsC) customer locationD) customer industryAnswer: BDiff: 2Objective: 1AACSB: Analytical thinking4) The cost of visiting customer

4、s would most likely be classified as a _. A) customer output unit-level cost B) customer batch-level cost C) customer-sustaining cost D) corporate-sustaining cost Answer: CDiff: 1Objective: 1AACSB: Analytical thinking5) Costs incurred to handle each unit sold would most likely be classified as a _.

5、推薦精選A) customer output unit-level cost B) customer batch-level cost C) customer-sustaining cost D) corporate-sustaining cost Answer: ADiff: 1Objective: 1AACSB: Analytical thinking6) The cost of the manager of a retail distribution channel would most likely be classified as a _.A) customer-sustaining

6、 costB) distribution-channel costC) customer batch-level costD) corporate-sustaining costAnswer: BDiff: 1Objective: 1AACSB: Analytical thinking7) Costs incurred to process orders would most likely be classified as a _. A) customer output unit-level cost B) customer batch-level cost C) customer-susta

7、ining cost D) corporate-sustaining cost Answer: BDiff: 1Objective: 1AACSB: Analytical thinking8) To improve customer profitability, companies should track _.A) only the final invoice price of a sale B) the volume of the products purchased by each customer C) the location of each customer D) the cust

8、omer profileAnswer: BDiff: 2Objective: 1AACSB: Analytical thinking9) Customers making large contributions to the profitability of the company should _.A) be treated the same as other customers because all customers are important B) receive a higher level of attention from the company than less profi

9、table customers C) be charged higher prices for the same products than less profitable customers D) not be offered the volume-based price discounts offered to less profitable customers Answer: BDiff: 2Objective: 1AACSB: Analytical thinking10) To reduce distribution-channel costs, a company could _.推

10、薦精選A) improve the efficiency of the ordering process B) make fewer customer visits C) eliminate distribution to retailers and only service wholesalers D) reduce product-handling costsAnswer: CDiff: 3Objective: 1AACSB: Analytical thinking11) Price discounts are influenced by _. A) the volume of produ

11、ct purchased B) the prime cost of productionC) the operational budgetD) the contribution -margin per unit Answer: ADiff: 3Objective: 1AACSB: Analytical thinking12) Managers use customer-profitability analysis report to ensure that _.A) unpaid invoices are categorized according to age by due dateB) c

12、osts related to customers are segmented into different cost pools on the basis of different types of cost drivers or cost-allocation basesC) customers making large contributions to the operating income of a company receive a high level of attention from the company D) cost allocation of indirect cos

13、t is in place Answer: CDiff: 2Objective: 1AACSB: Analytical thinking13) Which of the following illustrates a purpose for allocating costs to cost objects?A) to provide information for cost-control and pricing decisions B) to provide information to customersC) to determine marginal costD) to measure

14、capital expenditureAnswer: ADiff: 2Objective: 1AACSB: Analytical thinking推薦精選14) The costs of all six value-chain functions should be included when determining _.A) the prime cost of a product B) the selling price of a product C) the contribution margin per unitD) the cost of capitalAnswer: BDiff: 3

15、Objective: 1AACSB: Analytical thinking15) Which purpose of cost allocation is used to encourage sales representatives to push high-margin products or services? A) to provide information for economic decisions B) to motivate managers and other employees C) to justify costs or compute reimbursement D)

16、 to measure income and assets for reporting to external parties Answer: BDiff: 2Objective: 1AACSB: Analytical thinking16) Costs of activities to sell each unit to a customer is an example of _.A) customer-sustaining costsB) division-sustaining costsC) customer output unit-level costsD) distribution-

17、channel costsAnswer: CDiff: 2Objective: 1AACSB: Analytical thinking17) _ categorizes costs related to customers into different cost pools on the basis of either different classes of cost drivers or different degrees of difficulty in determining the cause-and-effect (or benefits-received) relationshi

18、ps. A) Customer-profitability analysis B) Customer revenues C) Customer cost hierarchy D) Price discounting Answer: CDiff: 1Objective: 1AACSB: Analytical thinking18) To analyze customer profitability, corporate-sustaining costs should be allocated to customers. Answer: FALSEExplanation: The allocati

19、on of corporate-sustaining costs serves no purpose in assessing customer profitability, decision making, performance evaluation, or motivation.Diff: 2Objective: 1AACSB: Analytical thinking推薦精選19) Costs of activities related to a group of units sold to a customer is termed as customer batch-level cos

20、ts.Answer: TRUEDiff: 1Objective: 1AACSB: Analytical thinking20) A price discount is the reduction in selling price below list selling price to encourage customers topurchase more quantities. Answer: TRUEDiff: 1Objective: 1AACSB: Analytical thinking21) Tracking price discounts by customer and by sale

21、sperson helps improve customer profitability.Answer: TRUEDiff: 1Objective: 1AACSB: Analytical thinking22) Customer-profitability analysis is the reporting and assessment of revenues earned from customers and the costs incurred to earn those revenues.Answer: TRUEDiff: 1Objective: 1AACSB: Analytical t

22、hinking23) Costs of displays at customer sites is an example of customer batch-level costs.Answer: FALSEExplanation: Costs of displays at customer sites is an example of customer-sustaining costs.Diff: 2Objective: 1AACSB: Analytical thinking24) Customer-sustaining costs is the costs of activities to

23、 support individual customers, regardless of the number of units or batches of product delivered to the customer.Answer: TRUEDiff: 2Objective: 1AACSB: Analytical thinking25) All customers are equally important to a company and should receive equal levels of attention. Answer: FALSEExplanation: Custo

24、mers should receive a level of attention from the company that matches their contribution to the company's profitability.Diff: 2Objective: 1AACSB: Analytical thinking推薦精選26) Price discounts must be uniform among all customers.Answer: FALSEExplanation: Price discounts will depend on the size of t

25、he purchase and the importance of the customer.Diff: 2Objective: 1AACSB: Analytical thinking27) There are two elements that influence customer profitability - revenues and costs. Answer: TRUEDiff: 2Objective: 1AACSB: Analytical thinking28) Companies that only record the invoice price can usually tra

26、ck the magnitude of price discounting. Answer: FALSEExplanation: To track discounting, the discount must be recorded.Diff: 2Objective: 1AACSB: Analytical thinking29) A customer cost hierarchy categorizes costs related to customers into different cost pools on the basis of different cost drivers. Ans

27、wer: TRUEDiff: 2Objective: 1AACSB: Analytical thinking30) An activity-based costing system may focus on customers rather than products. Answer: TRUEDiff: 2Objective: 1AACSB: Analytical thinking31) A customer cost hierarchy may include customer-sustaining costs.Answer: TRUEDiff: 2Objective: 1AACSB: A

28、nalytical thinking32) A customer cost hierarchy may include distribution-channel costs. Answer: TRUEDiff: 1Objective: 1AACSB: Analytical thinking推薦精選33) Corporate-sustaining costs are costs of activities to support individual customers, regardless of the number of units or batches of product deliver

29、ed to the customer.Answer: FALSEExplanation: Customer-sustaining costs are costs of activities to support individual customers, regardless of the number of units or batches of product delivered to the customer.Diff: 2Objective: 1AACSB: Analytical thinking34) In general, distribution-channel costs ar

30、e more easily influenced by customer actions than customer batch-level costs. Answer: FALSEExplanation: In general, customer batch-level costs are more easily influenced by customer actions than distribution-channel costs.Diff: 3Objective: 1AACSB: Analytical thinking35) If one of five distribution c

31、hannels is discontinued, corporate-sustaining costs such as general administration costs will most likely be reduced by 20%. Answer: FALSEExplanation: If one of five distribution channels is discontinued, corporate-sustaining costs such as general administration costs will most likely not be affecte

32、d.Diff: 3Objective: 1AACSB: Analytical thinking推薦精選36) Colise Services is a repair-service company specializing in small household jobs. Each client pays a fixed monthly service fee based on the number of rooms in the house. Records are kept on the time and material costs used for each repair. The f

33、ollowing profitability data apply to five customers:Customer RevenuesCustomer CostsMarveline Burnett$360$270J Jackson240366Roger Jones9690Paul Saas90132Becky Stephan420264Required:a.Compute the operating income for each of the five customers.b.What options should Colise Services consider in light of

34、 the customer-profitability results?c.What problems might Colise Services encounter in accurately estimating the operating costs of each customer? Answer: a.Customer RevenuesCustomer CostsOperating incomeMarveline Burnett$360$270$ 90J Jackson240366(126)Roger Jones96906Paul Saas90132(42)Becky Stephan

35、420264156b.1.Pay increased attention to the profitable customers Stephan and Burnett.2.Seek ways of reducing costs and increasing revenues for the loss accounts of J Jackson and Paul Saas. Work with the customers so their behavior reduces overall costs. Reduce costs with better scheduling. Maybe a d

36、ifferent fee schedule needs to be implemented depending on the age of the house, the distance to the home, if the repair is preventive or an emergency, etc. Determine whether the operating income pattern will probably continue or not and why.3.As a last resort, the company may want to discontinue th

37、e Jackson account if the customer does not agree to a fee increase and the operating loss pattern is expected to continue. c.Problems in accurately estimating operating costs of each customer include:1.The basic underlying records may not be accurate.2.Some repair personnel may be efficient and more

38、 experienced, others may be less experienced and slower, and still others may "chit-chat" more with the clients than others.3.Costs that are allocated to more than one customer may be distorting operating income. Diff: 2Objective: 1AACSB: Application of knowledge37) How can a company's

39、 revenues and costs differ across customers?Answer: Revenues differ because of differences in the quantity purchased and price discounts.Costs differ because different customers place different demands on a company's resources in terms of processing sales orders, making deliveries, and customer

40、support.Diff: 3Objective: 1AACSB: Analytical thinking推薦精選38) Explain the importance of customer-profitability analysis.Answer: Customer-profitability analysis is the reporting and assessment of revenues earned fromcustomers and the costs incurred to earn those revenues. An analysis of customer diffe

41、rencesin revenues and costs reveals why differences exist in the operating income earned from different customers. Managers use this information to ensure that customers making large contributions to the operating income of a company receive a high level of attention from the company and that loss-m

42、aking customers do not use more resources than the revenues they provide.Diff: 3Objective: 1AACSB: Analytical thinking39) Consider revenues from three of Megafy's 10 wholesale customers in 2015:CustomerCustomerCustomerABCUnits sold20,000150003000List selling price$500$500$500Price discount$50$30

43、$100Invoice price$450$470$400Revenues $9,000,000 $7,050,000 $1,200,000 What conclusion can be drawn from the above data? Which steps the manager of the company can take?Answer: The company managers may decide to strictly enforce its volume-based price discounting policy. The company may also require

44、 its salespeople to obtain approval for giving large discounts to customers who do not normally qualify for them. In addition, the company could track future sales to customers who have received sizable price discounts on the basis of their "high growth potential." For example, managers sh

45、ould track future sales to Customer C to see if the $100-per-computer discount translates into higher future sales.Diff: 3Objective: 1AACSB: Application of knowledge推薦精選Objective 14.21) An advantage of using a bar chart to visualize customer profitability is that _.A) differences in commissions paid

46、 to sales persons stand out B) the number of "unprofitable" customers stand out C) trends in the volume of purchases become apparent D) company can get ideas about new products or improved methodsAnswer: BDiff: 3Objective: 2AACSB: Analytical thinking2) Dropping an unprofitable customer wil

47、l _.A) eliminate long-run costs assigned to that customer B) eliminate most short-run costs assigned to that customer C) decrease long-run profitability D) increase the potential to cross-sell other products that are more desirable Answer: BDiff: 3Objective: 2AACSB: Analytical thinking3) The chart u

48、sed to express customer profitability is called the whale curve because _.A) it is forward-bending at the point where customers start to become profitable and thus resembles a humpback whaleB) it is forward-bending at the point where customers start to become unprofitable and thus resembles a humpba

49、ck whaleC) it is backward-bending at the point where customers start to become profitable and thus resembles a humpback whaleD) it is backward-bending at the point where customers start to become unprofitable and thus resembles a humpback whaleAnswer: DDiff: 2Objective: 2AACSB: Analytical thinking4)

50、 Discontinuing an unprofitable customer _.A) will eliminate all corporate costs assigned to and may result in losing more revenues relative to costs savedB) will eliminate all costs assigned to and may result in gaining more revenues relative to costs savedC) will not eliminate all costs assigned to

51、 and may result in losing more revenues relative to costs savedD) will not eliminate all corporate costs assigned to and may result in gaining more revenues relative to costs savedAnswer: CDiff: 3Objective: 2AACSB: Analytical thinking推薦精選5) It is common to find that a small number of customers gener

52、ate a high percentage of operating income. Answer: TRUEDiff: 2Objective: 2AACSB: Analytical thinking6) Managers who utilize customer profitability charts should drop customers that generate a negative customer operating income, since dropping an unprofitable customer will automatically cause overall

53、 income to increase. Answer: FALSEExplanation: Managers who utilize customer profitability charts should not drop customers that generate a negative customer operating income, because dropping an unprofitable customer may not cause overall income to increase.Diff: 2Objective: 2AACSB: Analytical thin

54、king7) It is possible that the smallest customer in terms of revenue is the most profitable customer. Answer: TRUEDiff: 2Objective: 2AACSB: Analytical thinking8) With the use of a bar chart, the number of "unprofitable" customers and the magnitude of their losses are apparent.Answer: TRUED

55、iff: 2Objective: 2AACSB: Analytical thinking9) The chart used to express customer profitability is called the whale curve because it is backward-bending at the point where customers start to become unprofitable and thus resembles a humpback.Answer: TRUEDiff: 2Objective: 2AACSB: Analytical thinking10) Bar charts and a whale curve are some of the common ways of displaying the results of customer-profitability analysis.Answer: TRUEDiff: 1Objective: 2AACSB: Analytical thinking11) Why would a manager perform customer-profitability analysis? Answer: Customer profitabili