The cost of grading and spreading gravel on a short rural road is expected to be $300,000. The road will have to be maintained at a cost of $25,000 per year. Even though the new road is not very smooth, it allows access to an area that previously could only be reached with off-road vehicles. The improved accessibility has led to a 150% increase in the property values along the road. If the previous market value of a property was $900,000, calculate the B/C ratio using an interest rate of 6% per year and a 20-year study period.
In: Economics
In: Accounting
An important application of regression analysis in accounting
is in the estimation of cost. By collecting data on volume and cost
and using the least squares method to develop an estimated
regression equation relating volume and cost, an accountant can
estimate the cost associated with a particular manufacturing
volume. Consider the following sample of production volumes and
total cost data for a manufacturing operation.
|
In: Statistics and Probability
8. A variable cost
a. decreases in total with increases in volume
b. increases on a per-unit basis with increases in volume
c. increases in total with increases in volume
d. decreases on a per-unit basis with increases in volume
e. None of the above
9. In standard costing, the upper and lower control limits are used to determine
a. the direction of the variance
b. the dollar amount of the variance
c. whether or not to investigate a variance
d. All of the above
e. None of the above
10. The direct materials usage variance is part of the performance evaluation of the
a. production manager
b. sales manager
c. purchasing agent
d. controller’s office
e. None of the above
11. Volume variances are generally the responsibility of the
a. purchasing agent
b. production manager
c. sales manager
d. controller’s office
e. None of the above
12. When using variable costing,
a. all fixed costs are deducted on the variable costing income statement
b. the total cost of goods sold is deducted on the variable costing income statement
c. the cost allocated to ending inventory consists of both fixed and variable costs
d. the total contribution margin on the variable costing income statement is based on units produced
e. None of the above
13. According to GAAP, if the ending balance in the overhead control account is considered immaterial,
a. it is closed to direct materials, work-in-process, and finished goods
b. it is closed to work-in-process, finished goods, and cost of goods sold
c. it is closed to finished goods and cost of goods sold
d. the total is closed to cost of goods sold
e. None of the above
14. According to the IMA’s Statement of Ethical Professional Practice, an accountant must “Disclose all relevant information that could reasonably be expected to influence an intended user's understanding of the reports, analyses, or recommendations.” This falls under the category of
a. Competence
b. Confidentiality
c. Integrity
d. Credibility
e. None of the above
15. The margin of safety is
a. the amount of revenue earned (or expected to be earned) above the break-even point
b. the amount of revenue earned (or expected to be earned) above total fixed costs
c. the amount of revenue earned (or expected to be earned) above total costs
d. the amount of revenue earned (or expected to be earned) above total variable costs
e. None of the above
In: Accounting
What is the main advantage/disadvantage associated with the historical cost concept?
In: Accounting
To an economist, "value" is the same as
| marginal cost. |
| the minimum price that people are willing to pay for another unit of the good. |
| consumer surplus. |
| total surplus. |
| marginal benefit. |
Value and price can be compared by noting that
| value is what we must pay, while price is what we are willing to pay. |
| value is always greater than price. |
| they are the same thing. |
| price is what we must pay, and value is what we are willing to pay. |
| value is what the seller receives when we buy a good, and price is what we must pay when we buy a good. |
A supply curve is the same as a
| marginal benefit curve. |
| total benefit curve. |
| marginal cost curve. |
| deadweight loss curve. |
| total cost curve. |
Which of the following occurs when a market is efficient?
| Consumer surplus is as large as possible. |
| The sum of consumer surplus and producer surplus is maximized. |
| Consumer surplus equals producer surplus. |
| The marginal benefit exceeds the marginal cost by as much as possible. |
| Producer surplus is as large as possible. |
The "equality of opportunity" idea of fairness claims
| it's not fair if the rules aren't fair. |
| only a first-come, first-served system of allocating resources is fair. |
| private property can be transferred under government order. |
| the results and the rules should both be fair. |
| a society should make the poorest as well off as possible. |
In: Economics
In: Accounting
In: Finance
A company is considering an investment that will cost $744,000 and have a useful life of 8 years. The cash flows from the project are expected to be $512,000 per year in the first two years then $108,000 per year for the last 6 years. If the appropriate discount rate is 15.0 percent per annum, what is the NPV of this investment (to the nearest dollar)?
Select one:
a. $397417
b. $1885417
c. $415178
d. $497087
In: Accounting
Advanced Engineering Economy
1. What is benefit-cost analysis?
In: Economics