Learning Objective 4-3
1) Managers that decide on whether or not to bid on a project or how much to bid on a project is an example of which step in the five-step decision-making process?
A) Step 1: Identify the problems with uncertainties.
B) Step 2: Obtain information.
C) Step 3: Make predictions about the future.
D) Step 4: Make decisions by choosing among the alternatives.
E) Step 5: Implement the decision, evaluate performance, and learn.
2) Managers that study drawings and engineering specifications provided by a company to make decisions about technical details is an example of which step in the five-step decision-making process?
A) Step 1: Identify the problems with uncertainties.
B) Step 2: Obtain information.
C) Step 3: Make predictions about the future.
D) Step 4: Make decisions by choosing among alternatives.
E) Step 5: Implement the decision, evaluate performance, and learn.
3) Managers that compare the predicted cost amounts against actual costs to evaluate how well they did on a specific job is an example of which step in the five-step decision-making process?
A) Step 1: Identify the problems with uncertainties.
B) Step 2: Obtain information.
C) Step 3: Make predictions about the future.
D) Step 4: Make decisions by choosing among alternatives.
E) Step 5: Implement the decision, evaluate performance, and learn.
4) The two underlying reasons that managers use longer time periods, such as a year, to calculate indirect-cost rates are:
A) ability; capability.
B) process systems; evaluation.
C) quality of cost base; systems.
D) job-costing systems; job pools.
E) numerator reason; denominator reason.
5) The system that managers do
not
use too much in organizations today because managers cannot compute costs in a timely manner is:
A) direct costing system.
B) actual costing system.
C) annual costing system.
D) diversified costing system.
E) predetermined costing system.
6) The system that calculates the actual costs of jobs is:
A) direct costing system.
B) actual costing system.
C) annual costing system.
D) diversified costing system.
E) predetermined costing system.
7) Managers calculate the actual indirect-cost rate by dividing actual annual indirect costs by the actual annual quantity of the cost-allocation base.
8) Managers never have a problem when they calculate the actual indirect-cost rates on a timely basis, for example each week.
9) The benefit of ongoing cost information to manager about jobs is that the information helps managers when they bid on new job opportunities while old jobs are in process.
10) Westinghouse Company has an opportunity to bid on a new job. The manufacturing cost estimate to bid on the job is $25,000, which yields a markup of 50% over the manufacturing cost. How much should they bid on this project?
A) $12,500
B) $25,000
C) $37,500
D) $50,000
E) $75,000