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Accounting for Decision Making and Control 9th Edition Zimmerman - Test Bank
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Multiple Choice Questions 1. The firm's information system: A. is always a single integrated system B. includes only financial information C. may include other information such as customer satisfaction surveys, in addition to financial information D. is less important as a firm grows in size ...

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  • August 15, 2023
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  • 2023/2024
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  • accounting for decision making and control

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Chapter 01

Introduction


Multiple Choice Questions


1. The firm's information system:


A. is always a single integrated
system
B. includes only financial
information
C. may include other information such as customer satisfaction surveys, in addition to
financial information
D. is less important as a firm grows
in size
E. none of the
above

2. Identify all the correct statements:


A. Managers naturally seek to maximize shareholders'
wealth
B. Managers act in their own interests, and so there is no way to align their interests
with those of the owners
C. To motivate managers in non-profit firms, no employee incentives
are needed
D. To align the interests of managers and owners, owners must design systems to
monitor and reward management behavior that increases the firm's profits
E. none of the
above

3. An internal accounting system should:


A. provide information to enable costs to be
minimized
B. provide financial accounting data for external reporting
purposes
C. provide management accounting information for
decision-making
D. provide data for tax
purposes
E. all of the
above


1-1
Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.

,4. Economic Darwinism:


A. explains why firms persist in inefficient
behavior
B. explains why some inefficient accounting practices
persist
C. explains why marmots eat
bears
D. explains why bears eat
marmots
E. none of the
above

5. Management accountants:


A. are internal
consultants
B. are mainly score-
keepers
C. focus on calculating product
costs
D. are ‘corporate
cops'
E. mostly a) and
d)

6. Internal control systems:


A. are the responsibility of the external
auditor
B. include anti-fraud
measures
C. are designed to allow financial
misrepresentation
D. require that one person perform all aspects
of a task
E. all of the
above




1-2
Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.

,7. Performance measures:


A. are critical in designing a reward
system
B. are unimportant in designing a reward
system
C. always influence people to achieve
them
D. are always worded
vaguely
E. are not needed to provide incentives because employees always want to do
the right thing

8. Micro Enterprises has the capacity to produce 10,000 widgets a month, and currently
makes and sells 9,000 widgets a month. Widgets normally sell for $6 each, and cost
an average of $5 to make, including fixed costs. The monthly fixed costs are $18,000.
Coyote Corp. has offered to buy 1,000 widgets at $4 each.

What is the "cost" per unit in the context of evaluating the offer from Coyote Corp.?


A. $
2
B. $
3
C. $
4
D. $
5
E. $
6

9. Micro Enterprises has the capacity to produce 10,000 widgets a month, and currently
makes and sells 9,000 widgets a month. Widgets normally sell for $6 each, and cost
an average of $5 to make, including fixed costs. The monthly fixed costs are $18,000.
Coyote Corp. has offered to buy 1,000 widgets at $4 each.

On this information alone, should Micro accept the offer?


A. No, because it will lose $1 per
unit
B. No, because it will lose $2 per
unit
C. No, because it will exceed
capacity
D. Yes, because it makes $1 per unit in the
short run
E. Unable to
determine




1-3
Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.

, 10. Micro Enterprises has the capacity to produce 10,000 widgets a month, and currently
makes and sells 9,000 widgets a month. Widgets normally sell for $6 each, and cost
an average of $5 to make, including fixed costs. The monthly fixed costs are $18,000.
Coyote Corp. has offered to buy 1,000 widgets at $4 each.

What other factors should be taken into consideration?


A. The impact on the normal selling price
of $6
B. Will an additional shift be needed to complete
the order?
C. Are future orders from Coyote
likely?
D. Does the special price comply with the Robinson-
Patman Act?
E. All of the
above

11. Micro Enterprises has the capacity to produce 10,000 widgets a month, and currently
makes and sells 9,000 widgets a month. Widgets normally sell for $6 each, and cost
an average of $5 to make, including fixed costs. The monthly fixed costs are $18,000.
Coyote Corp. has offered to buy 1,000 widgets at $4 each.

Assuming the same story, but Coyote's offer is for 1,500 units (all or nothing), should
the offer be accepted?


A. No, because it will lose $1 per
unit
B. No, because the opportunity costs outweigh
the gains
C. No, (indifferent or worse) because the opportunity costs equal
the gains
D. Yes, because it makes $1 per unit in the
short run
E. Unable to
determine




Essay Questions




1-4
Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.

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