ch14 sample questions
CHAPTER 14
Sample Exam Questions
1. Which of the following is not a primary purpose given in the text for allocating costs?
A. To provide information for economic decisions
B. To motivate managers and other employees
C. To measure income and assets for reporting to external parties
D. To foster cost awareness among managers to improve decisions
2. Which of the following is considered more of an objective than a criterion?
A. Cause-and-effect
B. Benefits received
C. Fairness or equity
D. Ability to bear
3. Homogeneity is used to
A. develop cost pools in which the costs have the same or similar cost-allocation base.
B. develop cost pools of similar amounts for allocation purposes.
C. develop cost pools based upon similarity of origination of costs to be allocated.
D. develop cost pools only for activity-based costing.
4. Information about price discounting can be useful in analyzing revenues of customers if
A. sales people are properly trained in sales forecasting.
B. records in the information system are kept of reductions in selling price below list price.
C. a strictly enforced company policy is in place regarding volume-based price discounts.
D. sales people are on an incentive plan that is based on revenues.
5. Which of the factors that managers must consider in deciding the allocation of resources across customers might provide misleading signals about dropping a current customer?
A. Potential for customer growth
B. Likelihood of customer retention
C. Long-run customer profitability
D. Ability to learn from customer
6. To guide cost allocation decisions, the fairness or equity criterion is:
A. the criterion often cited in government contracts
B. superior when the purpose of cost allocation is for economic decisions
C. used more frequently than the other criteria
D. the primary criterion used in activity-based costing
7. To guide cost allocation decisions, the cause-and-effect criterion:
A. is used less frequently than the other criteria
B. is the primary
Sample Exam Questions
1. Which of the following is not a primary purpose given in the text for allocating costs?
A. To provide information for economic decisions
B. To motivate managers and other employees
C. To measure income and assets for reporting to external parties
D. To foster cost awareness among managers to improve decisions
2. Which of the following is considered more of an objective than a criterion?
A. Cause-and-effect
B. Benefits received
C. Fairness or equity
D. Ability to bear
3. Homogeneity is used to
A. develop cost pools in which the costs have the same or similar cost-allocation base.
B. develop cost pools of similar amounts for allocation purposes.
C. develop cost pools based upon similarity of origination of costs to be allocated.
D. develop cost pools only for activity-based costing.
4. Information about price discounting can be useful in analyzing revenues of customers if
A. sales people are properly trained in sales forecasting.
B. records in the information system are kept of reductions in selling price below list price.
C. a strictly enforced company policy is in place regarding volume-based price discounts.
D. sales people are on an incentive plan that is based on revenues.
5. Which of the factors that managers must consider in deciding the allocation of resources across customers might provide misleading signals about dropping a current customer?
A. Potential for customer growth
B. Likelihood of customer retention
C. Long-run customer profitability
D. Ability to learn from customer
6. To guide cost allocation decisions, the fairness or equity criterion is:
A. the criterion often cited in government contracts
B. superior when the purpose of cost allocation is for economic decisions
C. used more frequently than the other criteria
D. the primary criterion used in activity-based costing
7. To guide cost allocation decisions, the cause-and-effect criterion:
A. is used less frequently than the other criteria
B. is the primary