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Cost Accounting

Practice Exam Questions - Bank 2

1. Which of the following is the only basis for assessing an overhead cost for equipment made idle by an injury?
a. wages paid for work time lost
b. workers compensation pay for lost work time
c. if extra equipment and work space is required
d. cost for depreciation
2. Which of the following is the common factor to most effectively ensure safety goals are achieved?
a. cost
b. leadership
c. accountability
d. resources
3. Which of the following is not a criterion for evaluating costs and benefits?
a. cost-benefit ratio
b. gross benefits
c. rate of return
d. payback period
4. In this type of analysis, the dollar values of all benefits and costs connected with program alternatives are estimated and then compared:
a. cost-benefit analysis
b. cost-per-hour analysis
c. rate-of-return analysis
d. unit production analysis
5. If a company's profit margin is 5% and the unit selling price of their product is $25. How many units must be sold to cover a $25,000 accident cost?
a. 50,000 units
b. 25,000 units
c. 20,000 units
d. 10,000 units
6. XYZ has averaged one carpel tunnel injury a year for the past three years. They decide to invest $12,000 to improve the design of four workstations to prevent the recurring carpel tunnel injuries. Each injury averages $35,000 in total accident costs. What will be the estimated return on the investment (ROI) over the next five years?
a. 292%
b. 1458%
c. 3568%
d. 8405%
7. ABC Environmental decides to invest $20,000 to eliminate fall hazards that have caused an average of 2 falls a year and averaged $50,000 per accident. What is the estimated payback period in years for this investment?
a. .2 years
b. .4 years
c. 1.3 years
d. 2.5 years
8. Expressing the cost to take corrective action and make improvements is better expressed as a/an ______________ to communicate the notion that the employer will realize a financial return.
a. expense
b. investment
c. expenditure
d. price
9. How much business volume is required if a company's profit margin is 5%, 300 units are required to cover the loss, and the unit selling price is $32.00? (Brauer 522)
a. $9,600
b. $96,000
c. $192,000
d. $1,920,000
10. Which of the following is not one of the ways to express the cost of safety? (Brauer 522)
a. cost of accidents/illnesses per share
b. volume of business necessary to cover loss
c. dollars per $100 of pay
d. number of days to cover loss

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