Multiple choice questions -incremental analysis and capital budgeting


 38. A major accounting contribution to the managerial decision-making process in evaluating 

possible courses of action is to 

a. assign responsibility for the decision. 

b. provide relevant revenue and cost data about each course of action. 

c. determine the amount of money that should be spent on a project. 

d. decide which actions that management should consider. 


 39. Which of the following stages of the management decision-making process is improperly 


a. Evaluate possible courses of action Æ Make decision. 

b. Assign responsibility for the decision Æ Identify the problem. 

c. Identify the problem Æ Determine possible courses of action. 

d. Assign responsibility for decision Æ Determine possible courses of action. 


 40. Internal reports that review the actual impact of decisions are prepared by 

a. department heads. 

b. the controller. 

c. management accountants. 

d. factory workers. 


 41. Which of the following steps in the management decision-making process does not 

generally involve the managerial accountant? 

a. Determine possible courses of action 

b. Make the appropriate decision based on relevant data 

c. Prepare internal reports that review the impact of decisions 

d. None of these 


The process of evaluating financial data that change under alternative courses of action is 


a. double entry analysis. 

b. contribution margin analysis. 

c. incremental analysis. 

d. cost-benefit analysis. 


 43. Nonfinancial information that management might evaluate in making a decision would not 


a. employee turnover. 

b. contribution margin. 

c. the environment. 

d. the corporate profile in the community. 


 44. Incremental analysis is synonymous with 

a. difficult analysis. 

b. differential analysis. 

c. gross profit analysis. 

d. derivative analysis. 


 45. In incremental analysis, 

a. only costs are analyzed. 

b. only revenues are analyzed. 

c. both costs and revenues may be analyzed. 

d. both costs and revenues that stay the same between alternate courses of action will 

be analyzed. 


 46. Incremental analysis is most useful 

a. in developing relevant information for management decisions. 

b. in choosing between the net present value method and the internal rate of return 


c. in evaluating the master budget. 

d. as a replacement technique for variance analysis. 


 47. The source of data to serve as inputs in incremental analysis is generated by 

a. market analysts. 

b. engineers. 

c. accountants. 

d. all of these. 


Which of the following is not a true statement? 

a. Incremental analysis might also be referred to as differential analysis. 

b. Incremental analysis is the same as CVP analysis. 

c. Incremental analysis is useful in making decisions. 

d. Incremental analysis focuses on decisions that involve a choice among alternative 

courses of action. 


 49. Incremental analysis would not be appropriate for 

a. a make or buy decision. 

b. an allocation of limited resource decision. 

c. elimination of an unprofitable segment. 

d. analysis of manufacturing variances. 


Incremental analysis would be appropriate for 

a. acceptance of an order at a special price. 

b. a retain or replace equipment decision. 

c. a sell or process further decision. 

d. all of these. 


 51. Which of the following is a true statement about cost behaviors in incremental analysis? 

1. Fixed costs will not change between alternatives. 

2. Fixed costs may change between alternatives. 

3. Variable costs will always change between alternatives. 

a. 1 

b. 2 

c. 3 

d. 2 and 3 


 52. A company is considering the following alternatives: 

 Alternative 1 Alternative 2 

Revenues $120,000 $120,000 

Variable costs 60,000 70,000 

Fixed costs 35,000 35,000 

Which of the following are relevant in choosing between the alternatives? 

a. Variable costs 

b. Revenues 

c. Fixed costs 

d. Variable costs and fixed costs 


 53. It costs Harmon Company $12 of variable and $5 of fixed costs to produce one bathroom 

scale which normally sells for $35. A foreign wholesaler offers to purchase 2,000 scales at 

$15 each. Harmon would incur special shipping costs of $1 per scale if the order were 

accepted. Harmon has sufficient unused capacity to produce the 2,000 scales. If the 

special order is accepted, what will be the effect on net income? 

a. $4,000 increase 

b. $4,000 decrease 

c. $6,000 decrease 

d. $30,000 increase


Adler Company manufactures a product with a unit variable cost of $50 and a unit sales 

price of $88. Fixed manufacturing costs were $240,000 when 10,000 units were produced 

and sold. The company has a one-time opportunity to sell an additional 1,000 units at $70 

each in a foreign market which would not affect its present sales. If the company has 

sufficient capacity to produce the additional units, acceptance of the special order would 

affect net income as follows: 

a. Income would decrease by $4,000. 

b. Income would increase by $4,000. 

c. Income would increase by $70,000. 

d. Income would increase by $20,000. 


 55. In incremental analysis, 

a. costs are not relevant if they change between alternatives. 

b. all costs are relevant if they change between alternatives. 

c. only fixed costs are relevant. 

d. only variable costs are relevant


Calculate your paper price
Pages (550 words)
Approximate price: -

Why Work with Us

Top Quality and Well-Researched Papers

We always make sure that writers follow all your instructions precisely. You can choose your academic level: high school, college/university or professional, and we will assign a writer who has a respective degree.

Professional and Experienced Academic Writers

We have a team of professional writers with experience in academic and business writing. Many are native speakers and able to perform any task for which you need help.

Free Unlimited Revisions

If you think we missed something, send your order for a free revision. You have 10 days to submit the order for review after you have received the final document. You can do this yourself after logging into your personal account or by contacting our support.

Prompt Delivery and 100% Money-Back-Guarantee

All papers are always delivered on time. In case we need more time to master your paper, we may contact you regarding the deadline extension. In case you cannot provide us with more time, a 100% refund is guaranteed.

Original & Confidential

We use several writing tools checks to ensure that all documents you receive are free from plagiarism. Our editors carefully review all quotations in the text. We also promise maximum confidentiality in all of our services.

24/7 Customer Support

Our support agents are available 24 hours a day 7 days a week and committed to providing you with the best customer experience. Get in touch whenever you need any assistance.

Try it now!

Calculate the price of your order

Total price:

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

Our Services

No need to work on your paper at night. Sleep tight, we will cover your back. We offer all kinds of writing services.


Essay Writing Service

No matter what kind of academic paper you need and how urgent you need it, you are welcome to choose your academic level and the type of your paper at an affordable price. We take care of all your paper needs and give a 24/7 customer care support system.


Admission Essays & Business Writing Help

An admission essay is an essay or other written statement by a candidate, often a potential student enrolling in a college, university, or graduate school. You can be rest assurred that through our service we will write the best admission essay for you.


Editing Support

Our academic writers and editors make the necessary changes to your paper so that it is polished. We also format your document by correctly quoting the sources and creating reference lists in the formats APA, Harvard, MLA, Chicago / Turabian.


Revision Support

If you think your paper could be improved, you can request a review. In this case, your paper will be checked by the writer or assigned to an editor. You can use this option as many times as you see fit. This is free because we want you to be completely satisfied with the service offered.