1.Which of the following statements about the limitations of Value Chain Analysi

Question

1.Which of the following statements about the limitations of Value Chain Analysis is false?

a. Truly comparable activities may be difficult to identify.
b. Information may be difficult to obtain.
c. ROI (return on investment) measures are accurate measures of profitability and power.
d. Measures that correlate better with firm value are needed.
e. Successful differentiation and costs management will require detailed costs analysis

2.Which of the following statements is NOT a weakness of Segment reporting systems?

a. Common costs are difficult to allocate based upon cause and effect.
b. Segments often influence each other’s performance.
c. Failure to identify direct segment costs.
d. All accounting measures are subject to errors and may be estimates.
e. All of the above statements are correct.

3.Which type of control uses accounting data?

a. Bureaucratic rules.
b. Clan control.
c. Market control.
d. Market and Bureaucratic
e. Accounting data is rarely if ever used in these types of control.

4.Which of the following statements about the calculation of product costs using traditional volume based measures is INCORRECT?

a. Traditional volume-based costing uses a single cost pool for each responsibility center or the entire factory.
b. Overhead is allocated using a single volume cost driver like direct labor hours.
c. Direct Materials and Direct Labor are allocated using volume based cost drivers.
d. Product costs consist of Direct Materials plus Direct Labor plus volume based overhead.
e. All of the above correctly describe product costing systems using traditional volume-based accounting systems.

5.Which of the following activities is usually considered a volume cost driver in an ABC system?

a. Move activities
b. Wait activities
c. Setup activities
d. Run activities
e. Quality Control ActivitieS

6.Management is considering reworking some obsolete wind charms into a more marketable product. In a decision model analyzing these alternatives, an externally would be:

a. The $20,000 reworking cost.
b. The $45,000 selling price for the new wind charms.
c. The value of avoiding layoffs.
d. The $8,000 scrap value of the existing wind charms.
e. None of the above items are externalities.

Explanation / Answer

The answer is C. ROI approximates profitability and power.

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