Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
16th Edition
ISBN: 9780134475585
Author: Srikant M. Datar, Madhav V. Rajan
Publisher: PEARSON
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Textbook Question
Chapter 20, Problem 20.16MCQ
The order size associated with the economic-order-quantity (EOQ) model will necessarily decline if:
- a. Ordering costs rise
- b. Storage costs rise
- c. Insurance costs for materials in storage fall
- d. Stockout costs rise
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Students have asked these similar questions
Which one of the following is not considered an assumption of cost-volume-profit analysis?
a. Costs are linear
b. Sales mix of products sold does not change
c. Selling price per unit changes with volume
d. Costs can be divided into variable and fixed components
e. Fixed cost per unit is not constant
Which one of the following is not considered an assumption of cost-volume-profit analysis?
a. Selling price per unit does not change with volume
b.
Costs can be divided into variable and fixed components
C.
Fixed cost per unit is not constant
d. Sales mix of products sold does not change
O e.
Costs are nonlinear
Which of the following performance measures will increase if inventory decreases and all else remains the same?
Return on
Residual
Investment
Income
A)
B)
Yes
Yes
No
Yes
Yes
No
D)
No
No
Multiple Choice
Choice C
Choice D
Choice A
Chapter 20 Solutions
Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
Ch. 20 - Why do better decisions regarding the purchasing...Ch. 20 - Name six cost categories that are important in...Ch. 20 - What assumptions are made when using the simplest...Ch. 20 - Give examples of costs included in annual carrying...Ch. 20 - Give three examples of opportunity costs that...Ch. 20 - What are the steps in computing the cost of a...Ch. 20 - Why might goal-congruence issues arise when...Ch. 20 - JIT purchasing has many benefits but also some...Ch. 20 - What are three factors causing reductions in the...Ch. 20 - You should always choose the supplier who offers...
Ch. 20 - Prob. 20.11QCh. 20 - What are the main features of JIT production, and...Ch. 20 - Distinguish inventory-costing systems using...Ch. 20 - Describe three different versions of backflush...Ch. 20 - Discuss the differences between lean accounting...Ch. 20 - The order size associated with the...Ch. 20 - Prob. 20.17MCQCh. 20 - Prob. 20.18MCQCh. 20 - Lyle Co. has only one product line. For that line,...Ch. 20 - Just-in-time inventory assumes all of the...Ch. 20 - Economic order quantity for retailer. Wonder Line...Ch. 20 - Economic order quantity, effect of parameter...Ch. 20 - EOQ for a retailer. The Fabric World sells fabrics...Ch. 20 - EOQ for manufacturer. Sk8 Company produces...Ch. 20 - Sensitivity of EOQ to changes in relevant ordering...Ch. 20 - JIT production, relevant benefits, relevant costs....Ch. 20 - Backflush costing and JIT production. Grand...Ch. 20 - Backflush costing, two trigger points, materials...Ch. 20 - Backflush costing, two trigger points, completion...Ch. 20 - Prob. 20.30PCh. 20 - Prob. 20.31PCh. 20 - Prob. 20.32PCh. 20 - Prob. 20.33PCh. 20 - JIT purchasing, relevant benefits, relevant costs....Ch. 20 - Supply-chain effects on total relevant inventory...Ch. 20 - Supply-chain effects on total relevant inventory...Ch. 20 - Backflush costing and JIT production. The Acton...Ch. 20 - Backflush, two trigger points, materials purchase...Ch. 20 - Backflush, two trigger points, completion of...Ch. 20 - Lean accounting. Reliable Security Devices (RSD)...Ch. 20 - JIT production, relevant benefits, relevant costs,...
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- Which of the following describes the behavior of the fixed cost per unit? a.remains constant with changes in production b.decreases with decreasing production c.decreases with increasing production d.increases with increasing productionarrow_forwardIn the cost-volume-profit graph,a. the break-even point is found where the total revenue curve crosses the x-axis.b. the area of profit is to the left of the break-even point.c. the area of loss cannot be determined.d. both the total revenue curve and the total cost curve appear.e. neither the total revenue curve nor the total cost curve appear.arrow_forwardWhich of the following would not affect the breakeven point? Oa. A change in variable cost per unit Ob. A change in sales price per unit O C.A change in total fixed cost O d. A change in number of units soldarrow_forward
- How do costs behave when there is a change in volume?a) ______ increases or decreases in total in direct proportion to increases or decreases in sales volume. b) ______ remains the same in total, regardless of change in sales. c) ______ have both a variable and fixed component. d) Answer the following regarding the high-low method:i) What is the formula for determining the variable costs when using the high low method:ii) Given the following information for the high and low levels, what is the variable cost per unit and the total fixed costs? iii) Based on the information in part ii), what is the relevant range?In MyAccountingLab, complete Try It! 21-1 and S21-1 through S21-3.LO2. What is contribution margin, and how is it used to compute operating income?a) What is the contribution margin if net sales revenue is $100,000 and variable costs are $40,000? b) Based on the information in part a), what is the contribution margin ratio?In MyAccountingLab, complete Try It! 21-2 and S21-4 and…arrow_forwardWhich of the following performance measures will increase if inventory decreases and all else remains the same? Return on Investment Residual Income A) Yes Yes B) No Yes C) Yes No D) No No Multiple Choice Choice A Choice B Choice C Choice Darrow_forwardFixed cost per unit of output decreases as volume increases. True or False True Falsearrow_forward
- Which of the following statements is true? OA. When a large proportion of income is spent on a product or service, the more elastic the supply will be. Percentage change in price OB Elasticity of supply Percentage change in quantity supplied OC. Products or services in which inputs are readily available have a more elastic supply. OD. None of the above is true. hand written otherwise skiparrow_forwardWhich type of cost has an unchanging total expense and a decreasing average expense as output increases?arrow_forwardIn making a short-term special decision, which of the following is MOST important? a. Use a conventional absorption costing method b. Focus on the total cost c. Separate variable and fixed costs d. Discount cash flow to their present valuesarrow_forward
- On the costvolume - profit graph which of the following would result into a decrease in the breakeven point (Assuming other factors remain unchanged )? a. Decrease in number of units sold b.Decrease in selling price per unit c. Increase in fixed costs d. Decrease in variable cost per unit e. None of the given answersarrow_forwardWith regard to the CVP graph, which of the following statements is NOT correct? a. The CVP graph assumes that volume is the only factor affecting total cost. b. The CVP graph assumes that fixed expenses are constant in total within the relevant range. c. The CVP graph assumes that selling prices do not change. d. The CVP graph assumes that variable costs go down as volume goes up.arrow_forwardBelow is the information on a project that you are evaluating for deciding on its worthiness as an investment. ABC company is considering a new investment whose data are shown below. WACC for the project under consideration Net investment in fixed assets (immediate) Required new working capital (immediate) Working capital from the end of the first year onwards as a Percentage of Sales Straight line deprec. Rate (every year end from the end of year 1} Sales revenues (starting at the end of year 1) Operating cost excluding depreciation, (starting at the end of year 1) 10% 75000 15000 25% 33.33% 75000 25000 Tax Rate Annual increase in Operating Costs each year from year 2 onwards Annual increase in Sales revenue from the end of the year 2 onwards Depreciation: Fixed assets to be fully depreciated in books using the straight line method over 4 years to zero Salvage value of the fixed assets at the end of the project life 35% 6% 9750arrow_forward
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