Zero-based budgeting force managers to?

A. Estimate a product's revenues and expenses over its expected life cycle.

B. Prepare a budget based on historical costs.

C. Formulate a budget by objective rather than function.

D. Justify all expenditures at the beginning of every budget period.

Strategic planning is

A. Short term.

B. Operational

C. Long term

D. Informal

A firm averages $4000 in sales per day and is paid, on an average1 within 30 days of the sale. After they receive their invoice, 55% of the customers pay by check, while the remaining 45% pay by credit card. Approximately how much would the company show in accounts receivable on its balance sheet on any given date?

A. $4000

B. $120.000

C. $48,000

D. $54000

Enert, Inc.'s current capital structure is shown below. This structure is optimal, and the company wishes to maintain it. Debt 25% Preferred equity 5 Common equity 7 0

Enert's management is planning to build a $75 million facility that will be financed according to this desired capital structure. Currently, $15 million of cash is available for capital expansion. The percentage of the $75 million that will come from a new issue of common stock is

A. 52.50%.

B. 50.00%.

C. 7000%.

D. 5600%.

Behavioral scientists have identified human tendencies that can erode the quality of decision making. Which of the following best describes a behavioral decision error referred to as "framing error"?

A. Evaluating positive information favorably and negative information unfavorably.

B. Getting locked into losing courses of action because of personal commitment.

C. Evaluating the probabilities of outcomes as point estimates instead of ranges.

D. Becoming overconfident because of past successes.

A company will produce 20000 units of product A at a unit variable cost of $7 and a unit selling price of $13. Fixed costs are $40,000. However, the company will still have 40% idle capacity. The company can use this idle capacity to produce 6,000 units of a different product B, which it can sell for $7 per unit. The incremental variable cost of producing a unit of B is $6. Present fixed costs that will be allocated to B amount to $10,000. To decide whether to produce B, the company should use

A. Differential cost analysis.

B. Information economics.

C. Regression analysis.

D. Markov chain analysis.

Capital Invest, Inc. uses a 12% hurdle rate for all capital expenditures and has done the following analysis for four projects for the upcoming year:

Which project(s) should Capital Invest, Inc. undertake during the upcoming year if it has only $600,000 of funds available?

A. Projects 1 and 3.

B. Projects 2, 3, and 4.

C. Projects 2 and 3.

D. Projects 3 and 4.

Gleason Co. has two products, a frozen dessert and ready-to-bake breakfast rolls, ready for introduction. However, plant capacity is limited, and only one product can be introduced at present. Therefore, Gleason has conducted a market study, at a cost of $26,000, to determine which product will be more profitable. The results of the study follow.

The costs associated with the two products have been estimated by Gleason's cost accounting department and are shown as follows:

*Gleason treats production tooling as a current operating expense rather than capitalizing it as a fixed

asset.

The cost incurred by Gleason for the market study is a(n)

A. Incremental cost.

B. Prime cost.

C. Opportunity cost.

D. Sunk cost.

A proposed transfer price may be based upon the full-cost price Full-cost price is the price

A. On the open market.

B. Representing the cash outflows of the supplying division plus the contribution to the supplying division from an outside sale.

C. Usually set by an absorption-costing calculation

D. Set by charging for variable costs plus a lump sum or an additional markup, but less than full markup

The relevance of a particular cost to a decision is determined by?

A. Riskiness of the decision,

B. Number of decision variables

C. Amount of the cost.

D. Potential effect on the decision.