# ACCT 434 Week 3 – Cost Behavior Decision Making Quality – Quiz

ACCT 434 Week 3 – Cost Behavior Decision Making Quality – Quiz

1. Question: (TCO 3) Dougherty Company employs 20 individuals. Eight employees are paid \$12 per hour and the rest are salaried employees paid \$3,000 a month. How would total costs of personnel be classified?

2. Question: (TCO 3) For January, the cost components of a picture frame include \$0.35 for the glass, \$0.65 for the wooden frame, and \$0.80 for assembly. The assembly desk and tools cost \$400. A total of 1,000 frames is expected to be produced in the coming year. What cost function best represents these costs?

3. Question: (TCO 3) Which cost estimation method uses a formal mathematical method to develop cost functions based on past data?

4. Question: (TCO 3) Penny’s TV and Appliance Store is a small company that has hired you to perform some management advisory services. The following information pertains to 20X8 operations: Sales (2,000 televisions) \$900,000; Cost of goods sold \$400,000; Store manager’s salary per year \$70,000; Operating costs per year \$157,000; Advertising and promotion per year \$15,000; Commissions (4% of sales) \$36,000. What are the estimated total costs if Penny’s expects to sell 3,000 units next year?

5. Question: TCO 4) The formal process of choosing among alternatives is known as a(n)

6. Question: (TCO 4) When using the five-step decision process, which one of the following steps should be done last?

7. Question: (TCO 4) Sunk costs

8 .Question: (TCO 4) Northwoods Incorporated manufactures rustic furniture. The cost accounting system estimates manufacturing costs to be \$90 per table, consisting of 80% variable costs and 20% fixed costs. The company has surplus capacity available. It is Northwoods’ policy to add a 50% markup to full costs. A large hotel chain is currently expanding and has decided to decorate all new hotels using the rustic style. Northwoods is invited to submit a bid to the hotel chain. What is the lowest price per unit Northwoods should bid on this long-term order?

9. Question: (TCO 5) Throughput contribution equals revenues minus

10. Question: (TCO 5) A machine has been identified as a bottleneck and the source of the constraint for a manufacturing company that has multiple products and multiple machines. One way the company can overcome the bottleneck is

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