Question 1

Fixed costs remain constant within a defined range of activity or time period.

Accepted Answer

A) True 
 B)False

Question 2

Suppose a management accountant becomes aware that a poor judgment he or she made has resulted in the loss of one of the company's clients.Is the accountant bound to share this information with the company? (The accountant doubts that the company will ever find out about it directly. )

Accepted Answer

A) The management accountant is bound to respond honestly to inquiries regarding the adequacy of professional judgments but is not bound to communicate them if not directly asked. 
B) The management accountant is bound to communicate this error in judgment only if another client cannot be found. 
C) The management accountant is not bound to communicate this error. 
D) The management accountant is bound to communicate unfavorable and favorable judgments made,even if not directly asked. 
A) The management accountant is bound to respond honestly to inquiries regarding the adequacy of professional judgments but is not bound to communicate them if not directly asked. 
B) The management accountant is bound to communicate this error in judgment only if another client cannot be found. 
C) The management accountant is not bound to communicate this error. 
D) The management accountant is bound to communicate unfavorable and favorable judgments made,even if not directly asked.

Question 3

Give two examples of each stage in the management process.

Accepted Answer

Plan: Determining the mission statement

Question 4

Woodies Inc.produces wooden desks.Which of the following is not an indirect material for Woodies?

Accepted Answer

A) Wood in a desk 
B) Nails in a desk 
C) Screws in a desk 
D) Lubricants for production machinery 
A) Wood in a desk 
B) Nails in a desk 
C) Screws in a desk 
D) Lubricants for production machinery

Question 5

Which of the following types of product costs appear in the financial statements?

Accepted Answer

A) Predetermined overhead costs 
B) Estimated costs 
C) Standard costs 
D) Actual costs 
A) Predetermined overhead costs 
B) Estimated costs 
C) Standard costs 
D) Actual costs

Question 6

The three elements of product costs are

Accepted Answer

A) direct materials,work in process,and overhead. 
B) direct materials,work in process,and finished goods. 
C) direct materials,direct labor,and overhead. 
D) direct materials,direct labor,and period costs. 
A) direct materials,work in process,and overhead. 
B) direct materials,work in process,and finished goods. 
C) direct materials,direct labor,and overhead. 
D) direct materials,direct labor,and period costs.

Question 7

Overhead costs are traced to products in the same way that direct materials and direct labor are traced.

Accepted Answer

A) True 
 B)False

Question 8

Job #178 consists of 500 units and has total of direct materials,$48,000;direct labor,$58,000;and overhead,$35,000.
a.What is the unit product cost?
b.What are the prime costs per unit?
c.What are the conversion costs per unit?

Accepted Answer

a.($48,000 + $58,000 + $35,000)/ 500 uni

Question 9

The standard costing method uses the sum of actual direct materials,actual direct labor,and actual overhead to determine the product unit cost.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following user groups will use managerial accounting information for decision-making purposes?

Accepted Answer

A) Customers 
B) Lenders 
C) Employees 
D) Stockholders 
A) Customers 
B) Lenders 
C) Employees 
D) Stockholders

Question 11

Management accounting provides reports that are future oriented.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following represents normal cost measurement?

Accepted Answer

A) Actual Direct Materials + Actual Direct Labor + Actual Overhead 
B) Actual Direct Materials + Actual Direct Labor + Estimated Overhead 
C) Estimated Direct Materials + Estimated Direct Labor + Actual Overhead 
D) Actual Direct Materials + Estimated Direct Labor + Estimated Overhead 
A) Actual Direct Materials + Actual Direct Labor + Actual Overhead 
B) Actual Direct Materials + Actual Direct Labor + Estimated Overhead 
C) Estimated Direct Materials + Estimated Direct Labor + Actual Overhead 
D) Actual Direct Materials + Estimated Direct Labor + Estimated Overhead

Question 13

Product costs can be found on both the balance sheet and the income statement.

Accepted Answer

A) True 
 B)False

Question 14

Managers use managerial accounting principles to guide their actions and decisions in the management process.

Accepted Answer

A) True 
 B)False

Question 15

Practitioners of management accounting and financial management have a responsibility to communicate information fairly and objectively.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is a variable cost?

Accepted Answer

A) Raw materials 
B) Rent 
C) Insurance expense 
D) Salaries 
A) Raw materials 
B) Rent 
C) Insurance expense 
D) Salaries

Question 17

The key to the preparation of an income statement for a manufacturing company is proper determination of the cost of goods manufactured.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following costs is considered overhead?

Accepted Answer

A) Indirect labor costs only 
B) Direct materials costs only 
C) Both indirect materials and indirect labor costs 
D) Direct materials and direct labor costs 
A) Indirect labor costs only 
B) Direct materials costs only 
C) Both indirect materials and indirect labor costs 
D) Direct materials and direct labor costs

Question 19

Which of the following questions do not dictate a managerial report's format?

Accepted Answer

A) Who should write the report? 
B) To whom should the report be distributed? 
C) What is the purpose of the report? 
D) What information is needed? 
A) Who should write the report? 
B) To whom should the report be distributed? 
C) What is the purpose of the report? 
D) What information is needed?

Question 20

Costs such as salary of supervisors and other support personnel,which are accounted for as overhead costs,are called

Accepted Answer

A) period labor costs. 
B) sales assistance costs. 
C) indirect labor costs. 
D) prime labor costs. 
A) period labor costs. 
B) sales assistance costs. 
C) indirect labor costs. 
D) prime labor costs.

Exam 17: Managerial Accounting and Cost Concepts

Fixed costs remain constant within a defined range of activity or time period.

Suppose a management accountant becomes aware that a poor judgment he or she made has resulted in the loss of one of the company's clients.Is the accountant bound to share this information with the company? (The accountant doubts that the company will ever find out about it directly. )

Give two examples of each stage in the management process.

Woodies Inc.produces wooden desks.Which of the following is not an indirect material for Woodies?

Which of the following types of product costs appear in the financial statements?

The three elements of product costs are

Overhead costs are traced to products in the same way that direct materials and direct labor are traced.

Job #178 consists of 500 units and has total of direct materials,$48,000;direct labor,$58,000;and overhead,$35,000. a.What is the unit product cost? b.What are the prime costs per unit? c.What are the conversion costs per unit?

The standard costing method uses the sum of actual direct materials,actual direct labor,and actual overhead to determine the product unit cost.

Which of the following user groups will use managerial accounting information for decision-making purposes?

Management accounting provides reports that are future oriented.

Which of the following represents normal cost measurement?

Product costs can be found on both the balance sheet and the income statement.

Managers use managerial accounting principles to guide their actions and decisions in the management process.

Practitioners of management accounting and financial management have a responsibility to communicate information fairly and objectively.

Which of the following is a variable cost?

The key to the preparation of an income statement for a manufacturing company is proper determination of the cost of goods manufactured.

Which of the following costs is considered overhead?

Which of the following questions do not dictate a managerial report's format?

Costs such as salary of supervisors and other support personnel,which are accounted for as overhead costs,are called

Accounting Principles and the Financial Statements

Analyzing and Recording Business Transactions

Adjusting the Accounts

Completing the Accounting Cycle

Foundations of Financial Reporting and the Classified Balance Sheet

Accounting for Merchandising Operations

Inventories

Cash and Internal Control

Receivables

Long -Term Assets

Current Liabilities and Fair Value Accounting

Accounting for Partnerships

Accounting for Corporations

Long Term Liabilities

The Statement of Cash Flows

Financial Statement Analysis

Costing Systems: Job Order Costing

Costing Systems Process Costing

Value-Based Systems: Activity-Based Costing and Lean Accounting

Cost-Volume-Profit Analysis

The Budgeting Process

Flexible Budgets and Performance Analysis

Standard Costing and Variance Analysis

Short-Run Decision Analysis and Capital Budgeting

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