The sample exam below is a representation of the Midterm and Final Examinations you will take in Weeks Three and Six of this course. As in the sample exam below, the Midterm and Final Examinations will include questions that assess the course objectives. Although the sample exam contains one question per objective, the exams will contain three questions per course objective. Refer to the questions in the sample exam below as a representation of the type of questions you will be asked in the Midterm and Final Examinations. Refer to the weekly readings and content outlines for each week as study references for the final exam. The questions contained in the Sample Examination, Midterm and Final Examinations were selected from Operations Management for Competitive Advantage, Fundamental Financial & Managerial Accounting Concepts, and Business Law: Legal Environment, Online Commerce, Business Ethics, and International Issues. Week One: Managerial Accounting and Capital Budgeting
Objective: Determine the present value of future cash flows from an investment.
1. Torvald's Hardware paid a contractor $45,000 to expand the store. The investment increased annual cash inflows by $8,000 per year six years. Torvald's has a desired rate of return of 10%. The net present value of this investment is which of the following? (round to the nearest dollar) A) ($10,160)
Objective: Differentiate among various capital budget evaluation techniques.
2. Which capital budgeting technique defines returns in terms of income instead of cash flows? A) the internal rate of return technique
B) the net present value technique
C) the unadjusted rate of return method
D) the payback period
Objective: Evaluate relevant financial information involved in a capital budgeting decision.
3. Tawanna is considering starting a small business. She plans to purchase equipment costing $145,000. Rent on the building used by the business will be $24,000 per year while other operating costs will total $30,000 per year. A market research specialist estimates that Tawanna's annual sales from the business will amount to $90,000. Tawanna plans to operate the business for 6 years. Disregarding the effects of taxes, what will be the amount of annual net cash flow generated by the business? A) $36,000
Week Two: Cost Analysis
Objective: Apply the concepts of cost estimation, cost driver, and cost allocation to a business situation.
4. Booker Company operates a factory with two departments, X and Y. The rent paid on the manufacturing facility would most likely be allocated to departments X and Y on the basis of: A) direct labor hours.
B) machine hours.
C) square footage.
D) units sold.
Objective: Use the techniques of job order and process costing to determine product cost.
5. Nadia Company uses a job order cost system. During the month of September, the company worked on three jobs. The job order cost sheets for the three jobs contained the following information at the end of September:
The company applies overhead at 120% of direct labor cost.
The total cost of Job A at the end of September was
Objective: Integrate cost behavior concepts with cost-volume-profit (CVP) analysis.
6. How does the cost-volume-profit model accommodate non-linear costs and revenues? A) Non-linear costs and revenues are ignored by the model.
B) Output volume is segregated into distinct ranges within which a linear relationship is expected to approximate the actual cost or revenue behavior. C) It is not a problem since non-linear costs and revenues do not exist in practice. D) It is not a problem since all costs are linear.
Week Three: Management Planning and Control
Objective: Construct elements of a master budget.
7. Oak Furniture provided the following information...