Question 1

A personal trainer working for the local health club is providing health advice to one of the gym's customers. This activity relates to the health club's:

Accepted Answer

A)  front office. 
B)  back office. 
C)  communication office. 
D)  customer service office. 
A)  front office. 
B)  back office. 
C)  communication office. 
D)  customer service office.

Question 2

Which of the following statements regarding the service industry and/or the application of management accounting techniques to the service industry is incorrect?

Accepted Answer

A)  Service output is much more difficult to define than manufacturing output. 
B)  Many of the activity measures chosen for service firms tend to be different from those chosen by manufacturing firms. 
C)  Firms in the service industry should use process costing systems rather than job costing systems. 
D)  Many service firms use a hybrid costing system. 
A)  Service output is much more difficult to define than manufacturing output. 
B)  Many of the activity measures chosen for service firms tend to be different from those chosen by manufacturing firms. 
C)  Firms in the service industry should use process costing systems rather than job costing systems. 
D)  Many service firms use a hybrid costing system.

Question 3

Jane Maxwell is a financial planner at Trifle Consulting. Her estimated salary cost per billable hour is $100. The estimated overhead cost per professional labour dollar for Trifle Consulting is 20 per cent and the required profit margin is 40 per cent of cost. What is Jane's chargeout rate per billable hour?

Accepted Answer

A)  $100 
B)  $120 
C)  $140 
D)  $168 
A)  $100 
B)  $120 
C)  $140 
D)  $168

Question 4

Downstream costs for a service entity include:
i. design.
ii. research and development.
iii. distribution.
iv. customer support.

Accepted Answer

A)  i 
B)  i and ii 
C)  i, ii and iii 
D)  iv 
A)  i 
B)  i and ii 
C)  i, ii and iii 
D)  iv

Question 5

Professional entities are likely to use:

Accepted Answer

A)  process costing. 
B)  product costing. 
C)  job costing. 
D)  operational costing. 
A)  process costing. 
B)  product costing. 
C)  job costing. 
D)  operational costing.

Question 6

Which of the following items may be included in a service firm's overhead cost?
i. Upstream costs such as research and development
ii. Downstream costs such as marketing
iii. Professional labour costs

Accepted Answer

A)  i only 
B)  i and ii 
C)  i and iii 
D)  i, ii and iii 
A)  i only 
B)  i and ii 
C)  i and iii 
D)  i, ii and iii

Question 7

Upstream costs for a merchandising entity include:
i. design.
ii. research and development.
iii. distribution.
iv. customer support.

Accepted Answer

A)  iii and iv 
B)  i and iii 
C)  i, ii and iii 
D)  None of the given answers 
A)  iii and iv 
B)  i and iii 
C)  i, ii and iii 
D)  None of the given answers

Question 8

For non-profit entities that are also merchandisers, inventory is valued at:

Accepted Answer

A)  lower of cost and current replacement cost. 
B)  lower of cost and net realisable cost. 
C)  lower of cost and estimated selling price of the inventory. 
D)  net reliable cost. 
A)  lower of cost and current replacement cost. 
B)  lower of cost and net realisable cost. 
C)  lower of cost and estimated selling price of the inventory. 
D)  net reliable cost.

Question 9

Marketing would be classified as an upstream activity in the value chain of a merchandising firm.

Accepted Answer

A) True 
 B)False

Question 10

The costs of services may be estimated as:
i. a basis of setting prices.
ii. a basis to determine which services to promote.
iii. a basis of cost control.
iv. an alternative to actual cost analysis.

Accepted Answer

A)  i, ii, iii and iv 
B)  i, ii and iii 
C)  ii, iii and iv 
D)  i, iii and iv 
A)  i, ii, iii and iv 
B)  i, ii and iii 
C)  ii, iii and iv 
D)  i, iii and iv

Question 11

Travel agencies would be classified as:

Accepted Answer

A)  mass services. 
B)  wholesaler. 
C)  retailer. 
D)  professional service. 
A)  mass services. 
B)  wholesaler. 
C)  retailer. 
D)  professional service.

A personal trainer working for the local health club is providing health advice to one of the gym's customers. This activity relates to the health club's:

Which of the following statements regarding the service industry and/or the application of management accounting techniques to the service industry is incorrect?

Downstream costs for a service entity include: i. design. ii. research and development. iii. distribution. iv. customer support.

Professional entities are likely to use:

Which of the following items may be included in a service firm's overhead cost? i. Upstream costs such as research and development ii. Downstream costs such as marketing iii. Professional labour costs

Upstream costs for a merchandising entity include: i. design. ii. research and development. iii. distribution. iv. customer support.

For non-profit entities that are also merchandisers, inventory is valued at:

Marketing would be classified as an upstream activity in the value chain of a merchandising firm.

The costs of services may be estimated as: i. a basis of setting prices. ii. a basis to determine which services to promote. iii. a basis of cost control. iv. an alternative to actual cost analysis.

Travel agencies would be classified as:

Management Accounting: Information for Creating Value and Managing Resources

Management Accounting: Cost Terms and Concepts

Cost Behaviour, Cost Drivers and Cost Estimation

Product Costing Systems

Process Costing and Operation Costing

A Closer Look at Overhead Costs

Activity-Based Costing

Budgeting Systems

Standard Costs for Control: Direct Material and Direct Labour

Standard Costs for Control: Flexible Budgets and Manufacturing Overhead

Managing and Reporting Performance

Financial Performance Measures and Incentive Schemes

Strategic Performance Measurement Systems

Managing Suppliers and Customers

Managing Costs and Quality

Sustainability and Management Accounting

Cost Volume Profit Analysis

Information for Decisions: Relevant Costs and Benefits

Pricing and Product Mix Decisions

Information for Capital Expenditure Decisions

Filters

Exam 6: Service Costing

A personal trainer working for the local health club is providing health advice to one of the gym's customers. This activity relates to the health club's:

Which of the following statements regarding the service industry and/or the application of management accounting techniques to the service industry is incorrect?

Downstream costs for a service entity include: i. design. ii. research and development. iii. distribution. iv. customer support.

Professional entities are likely to use:

Which of the following items may be included in a service firm's overhead cost? i. Upstream costs such as research and development ii. Downstream costs such as marketing iii. Professional labour costs

Upstream costs for a merchandising entity include: i. design. ii. research and development. iii. distribution. iv. customer support.

For non-profit entities that are also merchandisers, inventory is valued at:

Marketing would be classified as an upstream activity in the value chain of a merchandising firm.

The costs of services may be estimated as: i. a basis of setting prices. ii. a basis to determine which services to promote. iii. a basis of cost control. iv. an alternative to actual cost analysis.

Travel agencies would be classified as:

Management Accounting: Information for Creating Value and Managing Resources

Management Accounting: Cost Terms and Concepts

Cost Behaviour, Cost Drivers and Cost Estimation

Product Costing Systems

Process Costing and Operation Costing

A Closer Look at Overhead Costs

Activity-Based Costing

Budgeting Systems

Standard Costs for Control: Direct Material and Direct Labour

Standard Costs for Control: Flexible Budgets and Manufacturing Overhead

Managing and Reporting Performance

Financial Performance Measures and Incentive Schemes

Strategic Performance Measurement Systems

Managing Suppliers and Customers

Managing Costs and Quality

Sustainability and Management Accounting

Cost Volume Profit Analysis

Information for Decisions: Relevant Costs and Benefits

Pricing and Product Mix Decisions

Information for Capital Expenditure Decisions

Filters