Question 1

Providing information for planning, controlling, and evaluating is a function of:

Accepted Answer

A)  Management accounting 
B)  Financial accounting 
C)  Governmental accounting 
D)  Tax accounting 
A)  Management accounting 
B)  Financial accounting 
C)  Governmental accounting 
D)  Tax accounting

Question 2

Which of the following principles are the LEAST uniform and are NOT mandatory?

Accepted Answer

A)  Financial reporting principles 
B)  Management accounting principles 
C)  Tax reporting principles 
D)  All of these are equally uniform and mandatory 
A)  Financial reporting principles 
B)  Management accounting principles 
C)  Tax reporting principles 
D)  All of these are equally uniform and mandatory

Question 3

Costs incurred for the benefit of more than one segment of the business are called:

Accepted Answer

A)  Direct costs 
B)  Opportunity costs 
C)  Common costs 
D)  Variable costs 
A)  Direct costs 
B)  Opportunity costs 
C)  Common costs 
D)  Variable costs

Question 4

Another name for joint costs is:

Accepted Answer

A)  Direct costs 
B)  Indirect costs 
C)  Variable costs 
D)  Fixed costs 
A)  Direct costs 
B)  Indirect costs 
C)  Variable costs 
D)  Fixed costs

Question 5

The aspect of management accounting that deals with such issues as what additional major resources (e.g., plant and equipment) are needed to meet a company's long-run goals is called:

Accepted Answer

A)  Capital budgeting 
B)  Production prioritizing 
C)  Operational budgeting 
D)  Strategic planning 
A)  Capital budgeting 
B)  Production prioritizing 
C)  Operational budgeting 
D)  Strategic planning

Question 6

Which of the following would NOT be included in manufacturing overhead?

Accepted Answer

A)  Indirect materials 
B)  Factory utilities 
C)  Factory fire insurance 
D)  Direct labor 
A)  Indirect materials 
B)  Factory utilities 
C)  Factory fire insurance 
D)  Direct labor

Question 7

What is the first step a business professional should take when confronted with a situation that may involve an ethical conflict?

Accepted Answer

A)  Resign from the organization. 
B)  Discuss the problem with the immediate supervisor. 
C)  Refrain from discussing the problem with anyone. 
D)  Use an objective advisor to help clarify issues. 
A)  Resign from the organization. 
B)  Discuss the problem with the immediate supervisor. 
C)  Refrain from discussing the problem with anyone. 
D)  Use an objective advisor to help clarify issues.

Question 8

Product costs in a manufacturing firm would NOT include:

Accepted Answer

A)  Direct materials 
B)  Manufacturing overhead 
C)  Administrative costs 
D)  Indirect labor 
A)  Direct materials 
B)  Manufacturing overhead 
C)  Administrative costs 
D)  Indirect labor

Question 9

Which of the following is NOT a function of management?

Accepted Answer

A)  Planning 
B)  Controlling 
C)  Analyzing 
D)  Regulating 
A)  Planning 
B)  Controlling 
C)  Analyzing 
D)  Regulating

Question 10

Long-run planning involves which one of the following processes?

Accepted Answer

A)  Capital budgeting 
B)  Production prioritizing 
C)  Operational budgeting 
D)  Variance comparison 
A)  Capital budgeting 
B)  Production prioritizing 
C)  Operational budgeting 
D)  Variance comparison

Question 11

The top accountant in most large organizations is usually called the:

Accepted Answer

A)  Controller 
B)  Chief financial officer 
C)  Chief executive officer 
D)  Sales' manager 
A)  Controller 
B)  Chief financial officer 
C)  Chief executive officer 
D)  Sales' manager

Question 12

The cost of milk for an ice cream manufacturer would be considered all of the following EXCEPT:

Accepted Answer

A)  Product cost 
B)  Manufacturing cost 
C)  Variable cost 
D)  Indirect cost 
A)  Product cost 
B)  Manufacturing cost 
C)  Variable cost 
D)  Indirect cost

Question 13

The control of operations involves all the following procedures EXCEPT:

Accepted Answer

A)  Tracking actual performance 
B)  Analyzing results 
C)  Creating performance measures 
D)  Establishing expectations 
A)  Tracking actual performance 
B)  Analyzing results 
C)  Creating performance measures 
D)  Establishing expectations

Question 14

Which of the following costs would NOT be reported on a financial statement?

Accepted Answer

A)  Indirect costs 
B)  Fixed costs 
C)  Sunk costs 
D)  Opportunity costs 
A)  Indirect costs 
B)  Fixed costs 
C)  Sunk costs 
D)  Opportunity costs

Question 15

Segment A had sales revenue of $900,000 and the following costs: direct materials, $252,000; direct labor, $36,000; variable manufacturing overhead, $72,000; and fixed manufacturing overhead, $315,000. If segment A is dropped, 25% of the fixed manufacturing overhead costs would be avoided. Calculate the segment profit.

Accepted Answer

A)  $225,000 
B)  $303,750 
C)  $461,250 
D)  $540,000 
A)  $225,000 
B)  $303,750 
C)  $461,250 
D)  $540,000

Question 16

Which of the following has a direct materials inventory?

Accepted Answer

A)  Merchandising company 
B)  Service company 
C)  Manufacturing company 
D)  None of these are correct 
A)  Merchandising company 
B)  Service company 
C)  Manufacturing company 
D)  None of these are correct

Question 17

Which of the following types of costs would be allocated among segments rather than directly attributable to a segment?

Accepted Answer

A)  Variable costs 
B)  Indirect costs 
C)  Fixed costs 
D)  Sunk costs 
A)  Variable costs 
B)  Indirect costs 
C)  Fixed costs 
D)  Sunk costs

Question 18

Cherry Company manufactures electronic yard tools. Costs for May were direct labor, $84,000; indirect labor, $51,000; direct materials, $69,000; indirect materials, $9,000; factory utilities, $6,900; and insurance on manufacturing equipment, $2,100. Cherry Company's total manufacturing costs for May are:

Accepted Answer

A)  $135,000 
B)  $69,000 
C)  $138,000 
D)  $222,000 
A)  $135,000 
B)  $69,000 
C)  $138,000 
D)  $222,000

Question 19

Short-run planning involves which one of the following processes?

Accepted Answer

A)  Preparing capital budgets 
B)  Tracking actual performance 
C)  Preparing operational budgets 
D)  Comparing actual results with established standards 
A)  Preparing capital budgets 
B)  Tracking actual performance 
C)  Preparing operational budgets 
D)  Comparing actual results with established standards

Question 20

Which of the following would most likely be a variable cost?

Accepted Answer

A)  Direct materials 
B)  Direct labor 
C)  Sales commissions 
D)  All of these are correct 
A)  Direct materials 
B)  Direct labor 
C)  Sales commissions 
D)  All of these are correct

Exam 15: Management Accounting and Cost Concepts

Providing information for planning, controlling, and evaluating is a function of:

Which of the following principles are the LEAST uniform and are NOT mandatory?

Costs incurred for the benefit of more than one segment of the business are called:

Another name for joint costs is:

The aspect of management accounting that deals with such issues as what additional major resources (e.g., plant and equipment) are needed to meet a company's long-run goals is called:

Which of the following would NOT be included in manufacturing overhead?

What is the first step a business professional should take when confronted with a situation that may involve an ethical conflict?

Product costs in a manufacturing firm would NOT include:

Which of the following is NOT a function of management?

Long-run planning involves which one of the following processes?

The top accountant in most large organizations is usually called the:

The cost of milk for an ice cream manufacturer would be considered all of the following EXCEPT:

The control of operations involves all the following procedures EXCEPT:

Which of the following costs would NOT be reported on a financial statement?

Which of the following has a direct materials inventory?

Which of the following types of costs would be allocated among segments rather than directly attributable to a segment?

Short-run planning involves which one of the following processes?

Which of the following would most likely be a variable cost?

Accounting Information: Users and Uses

Financial Statements: An Overview

The Accounting Cycle: The Mechanics of Accounting

Completing the Accounting Cycle

Internal Controls: Ensuring the Integrity of Financial Information

Receivables: Selling a Product or a Service

Inventory and the Cost of Sales

Completing the Operating Cycle

Investments: Property, Plant, and Equipment and Intangible Assets

Financing: Long-Term Liabilities

Financing: Equity

Investments: Debt and Equity Securities

Statement of Cash Flows

Analyzing Financial Statements

Cost Flows and Business Organizations

Activity-Based Costing

Budgeting and Control

Controlling Cost and Profit

Inventory Management and Variable and Absorption Costing

Cost Behavior and Decisions Using C-V-P Analysis

Relevant Information and Decisions

Capital Investment Decisions

New Measures of Performance

Filters