cost and management accounting assignment 1

Test: Cost Accounting - Practice Exam 1 (Conceptual Questions)

25 multiple choice questions.

Term Comparing budgeted costs to actual costs helps managers to improve ________. Choose matching definition coordination control implementation planning Don't know? 1 of 25

Term Which of the following is true of management accounting information? Choose matching definition It focuses on documenting past business actions of a firm. It is prepared based on SEC rules and FASB accounting principles. It is prepared for shareholders. It co-ordinates product design, production, and marketing decisions. Don't know? 2 of 25

Term ________ describes the flow of goods, services, and information from the purchase of materials to the delivery of products to consumers, regardless of whether those activities occur in the same organization or with other organizations. Choose matching definition Supply chain Production process Quality control Customer relationship management Don't know? 3 of 25

Term A budget serves as much as a control tool as a planning tool because ________. Choose matching definition it aids in the coordination and communication among various business functions it helps to evaluate customer needs and feedback it is a benchmark against which actual performance can be compared it helps.to make predictions about the future Don't know? 4 of 25

Term Which of the following factors affect the direct/indirect classification of a cost? Choose matching definition the level of budgeted profit for the next year the estimation of time required to complete the order the ability to execute an order in the most cost-efficient manner the design of the operation Don't know? 5 of 25

Term Outside the relevant range, variable costs, such as direct material costs ________. Choose matching definition will decrease proportionately with changes in sales volumes will remain the same with changes in production volumes will not change proportionately with changes in production volumes will increase proportionately with changes in sales volumes Don't know? 6 of 25

Term When 20,000 units are produced, fixed costs are $16 per unit. Therefore, when 16,000 units are produced, fixed costs will ________. Choose matching definition increase to $20 per unit remain at $16 per unit decrease to $10 per unit total $160,000 Don't know? 7 of 25

Term A plant manufactures several different products. The wages of the plant supervisor can be classified as a(n) ________. Choose matching definition direct cost inventoriable cost variable cost period cost Don't know? 8 of 25

Term Which of the following is true of CVP analysis? Choose matching definition Costs may be separated into separate inventoriable and period components with respect to the level of output. Total revenues and total costs are linear in relation to output units. Unit selling price, unit variable costs, and unit fixed costs are known and remain constant. Proportion of diffe Don't know? 9 of 25

Term A ________ is anything for which a measurement of costs is desired. Choose matching definition cost-allocation base cost pool cost object cost-application base Don't know? 10 of 25

Term A ________ links an indirect cost to a cost object. Choose matching definition cost-allocation base cost pool cost assignment cost tracing Don't know? 11 of 25

Term Which of the following differentiates job costing from process costing? Choose matching definition Job costing is used when each unit of output is identical, and process costing deals with unique products. Job costing is used when each unit of output is identical and not produced in batches, and process costing deals with unique products produced on large scale. Process costing is used when each unit of output is identical, and job costing deals with unique products not produced in batches. Job costing is used by manufacturing industries, and process costing is used by service industries. Don't know? 12 of 25

Term The budgeted indirect-cost rate for each cost pool is computed as ________. Choose matching definition budgeted annual indirect costs divided by budgeted annual quantity of cost allocation base budgeted annual quantity of cost allocation base divided by budgeted annual indirect costs actual annual indirect costs divided by budgeted annual quantity of cost allocation base budgeted annual indirect costs divided by budgeted actual quantity of cost allocation base Don't know? 13 of 25

Term Product-cost cross-subsidization ________. Choose matching definition exists when one overcosted product results in more than one other product being overcosted means that if a company undercosts more than one of its products, it will overcost more than one of its other products means that if a company undercosts one of its products, it will overcost at least one of its other products exists only when one overcosted product results in all other products being overcosted Don't know? 14 of 25

Term Refining a cost system includes ________. Choose matching definition classifying as many costs as indirect costs as is feasible creating as many cost pools as possible identifying the activities involved in a process seeking a lesser level of detail Don't know? 15 of 25

Term Demand for refinements to the costing system has accelerated due to ________. Choose matching definition increase in direct costs decrease in product diversity decrease in indirect costs competition in product markets Don't know? 16 of 25

Term Which of the following statements is true of activity-based costing? Choose matching definition In activity-based costing, direct labor-hours is always the best allocation base to allocate all non-manufacturing indirect costs. Activity based costing is more suited to companies with high product diversity than companies with single product line. Activity based costing broadly averages or spreads the cost of resources uniformly to cost objects such as products or services. The main advantage of activity-based costing over peanut-butter costing is the accurate distribution of all direct costs to the products. Don't know? 17 of 25

Term Place the five steps in the decision − making process in the correct order: A = Obtain information B = Make decisions by choosing among alternatives C = Identify the problem and uncertainties D = Implement the decision, evaluate performance, and learn E = Make predictions about the future Choose matching definition A. C A E B D B. A E B D C C. E D A B C D. C D B E A Don't know? 18 of 25

Term Which of the following is not a concern for management accountants in formulating a strategy? Choose matching definition identifying the most important warehouse location for the distribution of goods maintaining adequate fixed assets available to implement the strategy strategizing compliance with GAAP (Generally Accepted Accounting Principles) substituting products that exist in the marketplace Don't know? 19 of 25

Term Which of the following statements concerning an organization's strategy is true? Choose matching definition Cost accountants formulate strategy in an organization since they have more inputs about costs. Strategy specifies how an organization matches its own capabilities with the opportunities in the marketplace to accomplish its objectives. Businesses usually follow one of two broad strategies: offering a quality product at a high price, or offering a unique product or service priced lower than the competition. A good strategy will always overcome poor implementation Don't know? 20 of 25

Term ________ describes the flow of goods, services, and information from the purchase of materials to the delivery of products to consumers, regardless of whether those activities occur in the same organization or with other organizations. Choose matching definition Customer relationship management Production process Supply chain Quality control Don't know? 21 of 25

Term A budget serves as much as a control tool as a planning tool because ________. Choose matching definition it helps.to make predictions about the future it is a benchmark against which actual performance can be compared it aids in the coordination and communication among various business functions it helps to evaluate customer needs and feedback Don't know? 22 of 25

Term Which of the following differentiates cost accounting and financial accounting? Choose matching definition The primary users of cost accounting are the investors, whereas the primary users of financial accounting are the managers. Cost accounting measures information related to the costs of acquiring or using resources in an organization, whereas financial accounting measures a financial position of a company to investors, banks, and external parties. Cost accounting deals with product design, production, and marketing strategies, whereas financial accounting deals mainly with pricing of the products. Cost accounting measures only the financial information related to the costs of acquiring fixed assets in an organization, whereas financial accounting measures financial and nonfinancial information of a company's business transactions Don't know? 23 of 25

Term Which of the following groups would be least likely to receive detailed management accounting reports? Choose matching definition stockholders sales managers distribution managers production supervisors Don't know? 24 of 25

Term The value chain is the sequence of business functions in which ________. Choose matching definition value is deducted from the products or services of an organization producing and delivering the product or service is of prime importance usefulness is added to the products or services of an organization products and services are evaluated with respect to their value to the supply chain Don't know? 25 of 25