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Q:
the units of production (uop) or units of service (uos) method uses a fixed total amount of units of service that is an overall total for the life of the equipment. then each years actual units of service is depreciated. assume: total equipment cost is $10,000, total units of service equals 5,000 and the useful life is five years. year 1 units of service equal 900 . the uos depreciation for year 1 is: a. $1,800 b. $2,000 c. $1,000 d. none of the above
Q:
in order to compute depreciation by the units of production (uop) or units of service (uos) method, the following information must first be obtained: a. time period (for example, the number of years) over which depreciation will be recognized b. number of units of production or service occurring during that time period c. total equipment cost to be depreciated d. all of the above
Q:
the 150% declining balance (150% db) method is: a. an accelerated depreciation method b. a straight-line depreciation method c. computes depreciation using a fraction d. computes depreciation using a constant percentage or factor e. a & c f. a & d g. b & c h. b & d
Q:
the sum-of-the-years digits (syd) method is: a. an accelerated depreciation method b. a straight-line depreciation method c. computes depreciation using a fraction d. computes depreciation using a constant percentage or factor e. a & c f. a & d g. b & c h. b & d
Q:
fully depreciated fixed assets (meaning all depreciable cost has been recognized) may still remain on the books if they are still in use. a. correct b. not correct c. not applicable
Q:
gross margin: a. is often expressed as a percentage b. equals revenue from sales less cost of goods sold c. can readily be compared to industry standards d. all of the above e. none of the above
Q:
the weighted average inventory method is sometimes also called: a. the average cost method b. the average costing method c. the weighted inventory method d. none of the above
Q:
using your computation of lifo cost of goods sold from the previous question, and further assuming that sales equal $500, what is the gross profit amount? a. $300 b. $250 c. $200 d. none of the above
Q:
different lifo inventory assumptions:
beginning inventory of 10 units @$15 = $150
purchases month #1 of 10 units @$15 = $150
purchases month #2 of 10 units @$10 = $100
cost of goods available for sale (subtotal) = $400
less ending inventory of 10 units
equals cost of goods sold (also known as cost of sales)
under the lifo inventory method, what is the cost of goods sold amount?
a $300
b $250
c $200
d none of the above
Q:
using your computation of cost of goods sold from the previous question, and further assuming sales equal $500 and operating expenses equal $50, what is the earnings before tax (ebt) amount? a. $350 b. $300 c. $250 d. none of the above
Q:
different fifo inventory assumptions:
beginning inventory of 10 units @$5 = $50
purchases month #1 of 10 units @$15= $150
purchases month #2 of 10 units @$10 = $100
cost of goods available for sale (subtotal) = $300
less ending inventory of 10 units
equals cost of goods sold (also known as cost of sales)
under the fifo inventory method, what is the cost of goods sold or cost of sales?
a $150
b $250
c $200
d none of the above
Q:
using your computation of fifo cost of goods sold from the previous question, and further assuming sales equal $500 and operating expenses equal $50, what is the gross profit amount? a. $350 b. $300 c. $250 d. none of the above
Q:
fifo inventory assumptions:
beginning inventory of 10 units @$5 = $50
purchases month #1 of 10 units @$10 = $100
purchases month #2 of 10 units @$15 = $150
cost of goods available for sale (subtotal) = $300
less ending inventory of 10 units
equals cost of goods sold (also known as cost of sales)
under the fifo inventory method, what is the cost of goods sold or cost of sales?
a $150
b $250
c $200
d none of the above
Q:
using your computation of lifo cost of goods sold from the previous question, and further assuming sales equal $500 and operating expenses equal $50, what is the gross profit amount? a. $200 b. $300 c. $250 d. none of the above
Q:
using your computation of lifo ending inventory from the previous question, what is the cost of goods sold amount? a. $150 b. $200 c. $250 d. none of the above
Q:
lifo inventory assumptions:
beginning inventory of 10 units @$5 = $50
purchases month #1 of 10 units @$10 = $100
purchases month #2 of 10 units @$15 = $150
cost of goods available for sale (subtotal) = $300
less ending inventory of 10 units
equals cost of goods sold (also known as cost of sales)
under the lifo inventory method, what is the ending inventory amount?
a $150
b $100
c $50
d none of the above
Q:
inventory turnover: a. is a ratio b. shows how fast the inventory is sold c. is only calculated every five years d. a & b e. b & c f. all of the above g. none of the above
Q:
assume the following: cost of goods sold = $130,000; purchases = $170,000; beginning inventory = $40,000; ending inventory = $80,000; current assets = $240,000.
calculate the average inventory, as used when calculating inventory turnover. correct answer is:
a $60,000
b $120,000
c $210,000
d none of the above
Q:
assume the following: beginning inventory= $4,000; ending inventory= $6,000; purchases= $22,000; cost of goods sold= $20,000.
calculate the inventory turnover. correct answer is:
a 2.0
b 3,333
c 5.0
d 4.0
e none of the above
Q:
assume the following: reserve for depreciation at current year end= $50,000; current years depreciation expense= $10,000; original cost of fixed assets= $200,000; inventory at current year end= $20,000; current years amortization expense= $5,000.
calculate the net book value of the fixed assets. correct answer is:
a $150,000
b $190,000
c $140,000
d none of the above
Q:
the expected cash value of an asset at the end of its useful life may be known as: a. residual value b. salvage value c. scrap value d. all of the above e. none of the above
Q:
the purchase of a fixed asset is recorded as: a. an operating expense b. a capital expenditure c. a short-term asset d. neither of the above
Q:
if a piece of equipment costs $110,000 and has a ten-year useful life along with a $10,000 salvage value, what is the annual depreciation expense using the straight-line depreciation method? a. $11,000 b. $10,000 c. $20,000
Q:
"average inventory" is calculated as beginning inventory plus ending inventory divided by: a. four b. two c. six d. none of the above
Q:
when the last-in-first-out (lifo) inventory method is compared to the first-in-first-out (fifo) method, the lifo ending inventory figure will be: a. higher b. lower c. neither of the above
Q:
an individual inventory item is recognized as "cost of goods sold" when it: a. moves out of inventory b. is purchased c. is recorded as entering the inventory d. none of the above
Q:
in analyzing mixed costs by the high-low method, to compute the amount of variable cost the difference in cost between high and low levels is obtained and is __________ by the amount of change in the activity or volume.
Q:
one of the most common examples of a semi-variable expense in healthcare is __________.
Q:
the contribution margin is computed by subtracting variable cost from net revenues.
Q:
another good example of variable cost is the food for group home residents.
Q:
a typical example of variable cost is rent expense.
Q:
the most frequent pattern of semi variable costs is the step pattern.
Q:
cross creek clinic has revenue totaling $200,000. the clinic has costs totaling $100,000. of this amount, 60% is variable cost and 40% is fixed cost. what is the clinics contribution margin, expressed in dollars? a. $40,000 b. $60,000 c. $120,000 d. $140,000 e. none of the above
Q:
placing the regression line through statistical analysis is called the least-squares method. least squares means that the sum of the squares of the deviations from plotted points to regression line is: a. larger than would occur from any other way the line could be fitted to the data b. smaller than would occur from any other way the line could be fitted to the data c. the best fit d. a & b e. a & c f. b & c
Q:
when creating a graph, the regression lines can be fitted: a. through statistical analysis b. visually c. either of the above d. none of the above
Q:
the regression line that is fitted to the plotted points on a graph such as an example in the text represents: a. a line of averages b. the average c. either of the above d. neither of the above
Q:
is the percentage answer from the preceding question considered to be the: a. cvp ratio b. pv ratio c. neither of the above
Q:
assume revenue per visit is $100.00 and the variable cost per visit is $70.00. also assume the revenue figure equals 100%. what percentage is the contribution margin per visit? a. 30% b. 35% c. 70% d. none of the above
Q:
if net revenues are $500,000, variable cost is $350,000 and fixed cost is $120,000, what is the contribution margin (in dollars)? a. $350,000 b. $30,000 c. $150,000 d. none of the above
Q:
the cost-volume-profit (cvp) ratio is often called the break-even point. a. correct b. not correct c. not applicable
Q:
when operations exceed the break-even point, there will be: a. an excess of expenses over revenues b. an excess of revenues over expenses c. neither of the above; not applicable
Q:
the contribution margin computation: a. allows fixed, variable and semivariable cost classifications b. requires either fixed or variable cost classifications c. neither of the above
Q:
convenience in the computation method is the advantage of which method of analyzing mixed costs? a. the scatter graph method b. the high-low method c. either of the above d. neither of the above
Q:
the scatter graph method of performing a mixed cost analysis: a. attempts to find the mixed costs average rate of variability b. uses a graph to plot the data points c. is not usually as accurate as the high-low method d. a & b e. b & c f. all of the above
Q:
assume the following units of sales for a particular period: 900, 1,000, 975, 850, 875, 750. which of these figures should be used when analyzing mixed costs by the high-low method? a. 1,000 and 850 b. 1,000 and 750 c. 975 and 875
Q:
in a mixed cost such as telephone cost: a. the fixed portion of the cost is the charge for actually consuming the service b. the variable portion of the cost is the charge for having the service ready to use c. both of the above d. neither of the above
Q:
variable costs would typically include payroll taxes, dietarys raw food costs, and rent expense. a. correct b. not correct c. not applicable
Q:
it is possible that some expenses may be variable to one organization and fixed to another because they are handled differently by the two organizations. a. correct b. not correct c. not applicable
Q:
semivariable costs: a. have mixed elements of both semivariable and variable costs b. are sometimes called mixed costs c. both of the above d. neither of the above
Q:
the midtown nursing facility has fixed costs amounting to $200,000. at an occupancy rate of 100 patients, the fixed cost per patient amounts to $2,000. in another way to think about fixed costs, if the administrator can increase the occupancy rate to 125 patients, will the fixed cost per patient then: a. increase b. decrease c. neither of the above
Q:
the horizon hospice provides a gift basket to every new patient that is admitted to the hospice. the baskets cost $15.00 apiece. these gift basket costs represent a: a. variable cost b. semivariable cost c. fixed cost d. none of the above
Q:
the waterford clinic pays a flat monthly fee of $250 under a two-year contract for certain computer services. this monthly fee of $250 is a: a. variable cost b. semivariable cost c. fixed cost d. none of the above
Q:
if these costs for riverside nursing facility were to be shown on a graph, the appropriate total monthly costs in dollars would appear on the: a. horizontal axis b. vertical axis c. neither of the above
Q:
in the riverside nursing facility, what monthly cost changes proportionately with the number of patients in house (the volume)? a. variable cost b. semivariable cost c. fixed cost d. none of the above
Q:
costs that vary in direct proportion to changes in the volume of operations are: a. variable costs b. semivariable costs c. fixed costs d. none of the above
Q:
the manager needs to know the difference between fixed and variable costs in order to: a. compute break-even points b. compute contribution margins c. understand a basic working tool in financial management d. all of the above e. none of the above
Q:
the break-even point is the point when the contribution margin equals: a. the variable costs b. the fixed costs c. neither of the above
Q:
mixed costs may include: a. utilities b. repairs c. telephone expense d. maintenance e. all of the above f. none of the above
Q:
when activity levels or volume of operations change, semivariable costs are those that: a. do not vary in total b. vary in direct proportion c. vary, but not in direct proportion d. none of the above
Q:
if the contribution margin is expressed as a percentage of net revenues, it is often called the: a. cost-volume-profit (cvp) ratio b. profit-volume (pv) ratio c. internal rate of return (irr) d. breakeven point
Q:
when comparing the high-low method of analyzing mixed costs to the scatter graph method, the scatter graph finds the mixed cost's average rate of variability: a. more accurately b. less accurately c. about the same
Q:
when activity levels or volume of operations change, fixed costs are those costs that: a. do not vary in total b. vary in direct proportion c. neither of the above
Q:
the use of one or more supporting reports to reveal details (such as the example showing allocation of indirect cost) is considered a __________ report, because it is supporting the preceding main report.
Q:
as a rule of thumb, if the answer to the following question is "yes", than the cost is a/an __________ cost: "if the operating unit (such as a department) did not exist, would this cost not be in existence?"
Q:
another term for responsibility center is __________.
Q:
whatever the manager is responsible for - the unit, the department or the patient - is known as a __________.
Q:
the product cost concept is important to managers of departments such as pharmacy that hold a significant amount of inventory.
Q:
product costs are matched with revenue on the basis of the period during which the cost is incurred.
Q:
one way to think of product cost is as necessary to the department, unit, etc to deliver the service, while period costs are necessary to support the existence of the organization itself.
Q:
in a responsibility center the manager is responsible for either the revenue (inflow) side or the expense (outflow) side, but is rarely responsible for both.
Q:
the manager is usually responsible for the indirect allocated expenses, but rarely responsible for the direct traceable expenses.
Q:
direct costs can be traced, while indirect costs have to be allocated.
Q:
a report example provided within the cost classifications chapter illustrates a rehab cost centers allocation of indirect costs. the indirect cost administrative salaries was allocated to three types of therapy according to the proportion of direct costs for each therapy type. assume the total administrative salaries to be allocated amounts to $100,000. further assume the proportion of direct costs is as follows: pt = 60%; ot=30%; st=10%. what is now the ot administrative salaries indirect cost allocation? a. $60,000 b. $30,000 c. $13,000 d. none of the above
Q:
dr. simms, a stubborn orthopedic surgeon, tries to get his administrator to allocate every cost on the groups income statement based on prior years results. the surgeon believes tracing direct costs is a waste of time and he says besides, the figures all come out the same anyway. is the doctor correct? a. yes b. no c. maybe
Q:
fred is responsible for revenue within his organization. generally speaking, fred is therefore responsible for: a. inflow b. outflow c. neither of the above
Q:
a report example has been provided within the cost classifications chapter that illustrates a rehab cost centers allocation of indirect costs. the indirect cost computer services was allocated to three types of therapy according to the number of computers in service for each therapy type. assume the number of computers has been changed to 20 . if the indirect cost per computer remains at $5,000, what is now the total computer services indirect cost? a. $100,000 b. $75,000 c. $200,000 d. none of the above
Q:
a pair of reports have been provided within the cost classifications chapter that illustrate a rehab cost centers direct and indirect cost. one report explains how indirect costs were allocated. the other report presents direct cost, the carried-forward indirect cost, and their totals. which of the two reports is the subsidiary report? a. the report titled example of rehab cost center direct and indirect cost totals b. the report titled example of indirect costs allocated to rehab cost center c. neither of the above
Q:
within the cost classification chapters westside example of responsibility center interactions and related reports, did the final summary report subtract negative figures from positive figures to arrive at a net result? a. yes b. no c. not applicable
Q:
within the cost classification chapter an example (westside) has been provided of responsibility center interactions between and among certain managers, their responsibilities, the lines of supervision, and their various reports. did each manager receive a report that included the figures that they themselves are responsible for? a. yes b. no c. not applicable
Q:
is a support center a responsibility center? a. yes b. no c. not applicable