ACCT 5302 Exam 1 Multiple Choice Review Questions And Answers Rev

1422 Words Apr 21st, 2015 6 Pages
1. Dorra Corporation manufactures lawnmowers in five work stations. Dorra's weekly demand is 5,000 mowers but Dorra can only produce 4,200. According to the theory of constraints, to increase production output Dorra would benefit the most by concentrating improvement efforts on the:
A. first work station.
B. last work station.
C. largest work station.
D. slowest work station.

2. Managerial accounting is applicable to
A. service entities.
B. manufacturing entities.
C. not-for-profit entities.
D. all of these.
3. The Sarbanes-Oxley Act of 2002 contains all of the following provisions EXCEPT:
A. A CFO must be a CPA or CMA.
B. The audit committee of the board of directors of a company must hire, compensate, and terminate the public
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$14,000
C. $1,000
D. $4,000

Questions 17-18 are based on the following information Tator Corporation reported the following data for the month of April:

17. The cost of goods sold for April was:
A. $178,000
B. $146,000
C. $126,000
D. $234,000
18. The net operating income for April was:
A. $22,000
B. $81,000
C. $46,000
D. $104,000

Questions 19-21 are based on the following information
Management of Sourwine Corporation is considering whether to purchase a new model 320 machine costing $389,000 or a new model 280 machine costing $318,000 to replace a machine that was purchased 6 years ago for $376,000. The old machine was used to make product C78P until it broke down last week. Unfortunately, the old machine cannot be repaired.

Management has decided to buy the new model 280 machine. It has less capacity than the new model 320 machine, but its capacity is sufficient to continue making product C78P.

Management also considered, but rejected, the alternative of simply dropping product C78P. If that were done, instead of investing $318,000 in the new machine, the money could be invested in a project that would return a total of $405,000. 19. In making the decision to buy the model 280 machine rather than the model 320 machine, the sunk cost was:
A. $376,000
B. $318,000
C. $405,000
D. $389,000
20. In making the decision to buy the model 280 machine rather than the model 320 machine, the differential cost was:
A. $58,000
B. $13,000
C. $29,000
D. $71,000
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