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 Management accounting

  1. A) Deals primarily with people and organizations outside of the business entity.
  2. B) Requires only periodic reporting on a regular basis.
  3. C) Uses any type of useful measurement unit, including physical as well as monetary measures.
  4. D) Deals only with the double-entry recording system

Which of the following type of information is not essential for a manger to run a business effectively?

Product or service costing information

Data for planning and controlling of operations

Special reports and analysis to support decisions

Quote of the current price of the company’s stock

Which of the following would not be included in the cost of manufactured product?

Cost to ship products to a customer

Cost of factory machinery used in production

Plant supervisor’s salary

Which of the following is not included in the purchase cost of merchandise inventory?

Purchase discounts

Overhead costs

Freight-in costs

Purchase returns and allowances

Depreciation expense could be:

A period cost

A product cost

A fixed cost

All of the above

Production costs appear on the income statement in the form of:

Costs of goods sold

Material inventory

sales commissions

None of the above

If there is a debit balance in the Factory payroll account at the end of the accounting period it represents.

An amount because applied payroll was greater than actual payroll

An amount because actual payroll was greater than applied payroll

Labor costs which have not yet been distributed

An amount which should be charged to cost of goods sold.

Which of the following accurately describes a difference between job orders and process costings systems.

In job order costings systems, overhead costs are treated as product costs, whereas in process costing systems, overhead costs are treated as period costs.

Job order costing systems do not need to assign costs to production, whereas process costing systems do.

In job order costing systems, costs are traced to products whereas in process costing systems, a FIFO method may be used.

Since costs are assigned to products in a job order costing system, selling costs are treated as product costs in the job order costing system whereas they are treated as period costs in process costings system.

Which of the following statements is true?

The work in Process Inventory account is the focal point of process costing.

To compute unit costs using the FIFO costing method, total costs of direct Materia, direct labor, and overhead that have been accumulated in the Work in Process Inventory account or accounts are divided

Equivalent units usually are computed for direct materials and manufacturing overhead combined.

Labor costs are accounted for differently form manufacturing overhead costs in  process costing system.

Nonvalue-adding activities are:

Unnecessary activities

Including in the value chain of activities

All wasteful and targeted for elimination

Not all wasteful and may not be targeted for elimination.

Which of the following would not require the use of cost behavior analysis?

Transferring production costs from one department to another

Projecting anticipated costs of a new project

Buying an existing business

Changing an existing product or service.

Which of the following statements is true regarding fixed and variable costs?

Both costs are constant when considered on a total basis?

Variable costs are constant in total, and fixed costs are constant per unit.

Both costs are constant when considered on a per unit basis

Fixed costs are constant in total, and variable costs are constant per unit.

Budgets:

Should contain both revenues and expenses

Contain as much information as possible

Are presented in dollars only; nondollar data should be excluded

Are synonymous with managing and organization.

Budgets identify, gather, summarize and communicate:

Financial data only

Financial and nonfinancial data

Nonfinancial data only

None of the above

After management has set short-term goals, the budgeting process typically starts with

A clearly defined timetable of events

Input only from the accounting personnel

The naming of an efficient coordinator or director

A set of procedures or instructions

Which of the following represents a basic stakeholder of an organization?

The account receivable clerk of the organization

The vice president of the organization

A line supervisor of the organization

All of the above

Part 2

By balancing all stakeholders’ needs, managers are more likely to achieve their objectives in

The long term

The short term

The short term as well as the long term

All areas of the organization

Which of the following is an example of a performance measurement?

Product quality

Number of customer complaints

Customer satisfaction

All of these choices

Service organizations do not develop standards for

a. labor.

b. overhead.

c. direct materials.

d. any service costs.

A standard costing system

Is not typically used by management for cost planning and cost control purposes

Is a system in which all costs affecting the three inventory accounts and the Cost of Goods Sold account are stated in terms of actual cost incurred

Depends on actual costs rather than planned costs

Is employed with an existing job order costing or process costing system and is not a full cost accounting system in itself.

Quantitative factors used by decision makers include all of the following except

Social issues

Competition

Annual or projected revenues

Timeliness

An example of pricing objective is to

Have prices hat top the market

Maintain or gain market share

Maximize losses

Minimize quality and cost

When making the decision on a product’s price the manager must consider

All products at the same time

The minimum price that will produce a profit

Only cost-based information

The product’s total variable costs

All of the following are capital investment decisions, except whether or not to

Replace old equipment

Issue stock to raise capital

Acquire another company

Add a new product line

Information captured by a management information system allows managers to do all of the following except

Determine accurate product or service costs

Improve processes

Provide timely feedback

Satisfy all customer inquiries

How does ERP differ from an MIS?

The ERP system informally links the different areas of management for specific purposes

There is no difference

The ERP system combines all areas of management into one centralized data warehouse

The ERP system can be used only in a service business

The overall objective of controlling the costs of quality is to eliminate:1 appraisal costs.

2 costs of nonconformance.

3 costs of conformance.

4 the costs of quality.

Service department costs are allocated so that

Budgeting purposes are fulfilled

They can be properly managed

A business can then assess the profitability of a product or service

They will have a zero balance at the end of the accounting period.

Joint costs are

Incurred prior to the separation of joint products

Incurred after separation of joint products

Incurred prior and after separation of joint products

None of the above

Executive’sofficer’s compensation is typically comprised of all of the following except:

Incentive bonus

Declared dividends

Stock option awards

Annual base salaries

Financial performance measurement is useful for all of the following except assessment of

Accounting methods

Return by investors

Risk by creditors

Risk by investors.