Bender Day 19

Question 1

What costs are included in inventory carrying costs?

Answer 1

All costs associated with warehousing (storing) inventory and holding inventory
- Storage
- Insurance
- Obsolescence and Spoilage

MCQ-04171

Question 2

A company invests in a property for $100k. They have a contract to sell it for $120k in one year. The bank has a guaranteed interest rate of 10%, what is the NPV?

Answer 2

NPV = 100,000 + 120,000 / 1.10¹

= 9,091

MCQ-08547

Question 3

An organization installed an uninterrupted power supply, what type of control is this?

Answer 3

Physical Control - Monitor and control the environment of the workplace and computing facilities

MCQ-13036

Question 4

Define: General Control

Answer 4

Are designed to ensure that the organizations control environment is stable and well managed

MCQ-13036

Question 5

Types of reporting risk that an accountant must recognize as that’s to accuracy of reports:

Answer 5

1. Strategic risk - picking the wrong technology
2. Financial risk - losing financial responses, lost, stolen, etc.
3. Information risk - such as a loss of data integrity

Note: Data Integrity Risk is not a thing

MCQ-03483

Question 6

Equation: Contribution Margin

Answer 6

Selling Price - Variable Costs

MCQ-08297

Question 7

After a B2B transaction occurs, what system keeps track of what goods were ordered, where to be delivered and how much was paid?

Answer 7

Supply chain MGMT system

MCQ-14582

Question 8

ABC Inc purchased an asset for $100k, they use SL depreciation over 10 years, their annual tax rate is 40%, what is their annual depreciation tax shield from the asset ?

Answer 8

10,000 * .4 = 4,000

MCQ-04280

Question 9

Equation: Operating Profit Margin

Answer 9

EBIT Margin = EBIT / Sales

Add back Interest and Taxes to Net Income

MCQ-04345

Question 10

5 Components of ERM and the 20 Principles

Answer 10

*GO PRO

Governance & Culture - DOVES
- Desired culture
- board Oversight
- Values
- Employees (attracts, develops, retains)
- operating Structure

Objective-Setting - SOAR
- alternative Strategies “what is the vision”
- Objectives
- Analyze business context
- Risk appetite.

Performance - VAPIR
- portfolio View - Parent level
- Assesses severity of risk
- Prioritize risk
- Identifies risk
- implement Responses to risk

Review/Revision - SIR
- assesses Substantial change
- Improvements
- Reviews risk and performace

Ongoing Info., Comm., & Reporting - TIP
- leverages Technology
- communicates risk Information
- reports on risk, culture, & Performance

MCQ-06260

Question 11

According to SOX, the audit committee is not required to

Answer 11

Evaluating and reporting on the effectiveness of the company’s internal control over financial reporting

The hired public acctg firm does this

MCQ-14818

Question 12

Define: Residual Risk

Answer 12

The risk that remains after MGMT responds to the risk

MCQ-06762

Question 13

NAFTA offers trading partners operating within its boundaries a reduction on tariffs in exchange for compliance limits on imported labor and materials, this is known as:

Answer 13

Sourcing requirement

MCQ-06106

Question 14

If the NPV for a project is positive than

Answer 14

Rate of Return for this project is greater than the discount percentage used in the NPV calculation

MCQ-03337

Question 15

When do differentiation strategies fail?

Answer 15

The value of the firms differentiation premium does not exceed it’s cost

If a firm must pay a higher cost for the premium related to the differentiation than it is able to recoup in the market for that feature, then its profits will decrease, the firm will lose competitive advantage, and the differentiation strategy will fail

MCQ-03609

Question 16

Fixed Overhead costs are charged to Inventory when while using Variable and Absorption Costing methods?

Answer 16

Variable - Fixed OH is charged to the period they are incurred

Absorption - Fixed OH is included in inventory costs

MCQ-07734

Question 17

True or False: When inventory increases over the period, Variable Net Income will exceed Absorption Net Income

Answer 17

FALSE

Under Variable, Fixed OH will hit the IS in the period incurred

Under Absorption, an increase in inventory results in more costs (Fixed OH) remaining on the BS = Absorption will produce a higher Net Income in the case

MCQ-07734

Question 18

Equation: Contribution Margin per Unit

Answer 18

= Sales Price per unit – Variable Cost per unit

MCQ-04263

Question 19

Equation: Breakeven Point in Units

Answer 19

What you want to cover (WWC)

= Total Fixed Costs / Contribution Margin per unit

MCQ-04263

Question 20

Equation: Selling Price per Unit

Setting Selling Prices Based on Assumed Volume

Answer 20

= (Fixed Costs + Variable Costs + Pretax Profit) / Number of Units Sold

MCQ-04258

Question 21

The impact of government price support program would most likely result in:

Answer 21

Lead to Surpluses

A government price support program acts as a SUBSIDY that will encourage suppliers to increase supply beyond equilibrium point

MCQ-03735

Question 22

Equation: Working Capital

How do you strengthen and weaken WC?

Answer 22

= CA - CL

WC is strengthened by:
- ↑ CA or ↓ CL
- Speeding up collections
- Slowing down payments
- Hold Cash Longer!

TBS-002342

Question 23

Equation: Sales Units Needed to obtain a Desired Profit

Answer 23

Sales (units) = (Fixed Costs + Pretax Profit) / Contribution Margin per Unit

MCQ-12448

Question 24

Define: Revenue Variance

Answer 24

A Revenue Variance (aka: Sales Price Variance) os due to the change in unit selling price

MCQ-04145

Question 25

During the CY, ABC Inc. increased its variable SG&A expenses while keeping fixed SG&A expenses the same, what was the result?

Answer 25

Operating margin will be the same under both Absorption and the Contribution approach

Operating income is the bottom line figure under both Absorption and Contribution approach = both methods take SG&A (Fixed and Variable) into account

MCQ-07720

Question 26

Equation: Units needed to achieve desired profit

Answer 26

Sales (units) = Pretax Profit / Contribution Margin per unit

MCQ-04343