Acct 212 – Managerial Accounting – Flashcards

Unlock all answers in this set

Unlock answers
question
Reports prepared in financial accounting are general-purpose reports, whereas reports prepared in managerial accounting are usually special-purpose reports.
answer
True
question
Managerial accounting applies to all forms of business organizations.
answer
True
question
Managerial accounting internal reports are prepared more frequently than are classified financial statements.
answer
True
question
The Sarbanes-Oxley Act replaces generally accepted accounting principles in a manufacturing company.
answer
False
question
Decision-making is an integral part of the planning, directing, and controlling functions.
answer
True
question
Manufacturing costs that cannot be classified as direct materials or direct labor are classified as manufacturing overhead.
answer
True
question
Raw materials are equal to direct materials minus indirect materials.
answer
False
question
The total cost of a finished product does not generally contain equal amounts of materials, labor, and overhead costs.
answer
True
question
Period costs include selling and administrative expenses.
answer
True
question
Direct materials and direct labor are the only product costs.
answer
False
question
Total period costs are deducted from total cost of work in process to calculate cost of goods manufactured.
answer
False
question
Ending finished goods inventory appears on both the balance sheet and the income statement of a manufacturing company.
answer
True
question
In calculating gross profit for a manufacturing company, the cost of goods manufactured is deducted from net sales.
answer
False
question
Finished goods inventory does not appear on a cost of goods manufactured schedule.
answer
True
question
product cost
answer
components-direct material
question
beginning work in process inv + total manufacturing costs
answer
total work in process
question
total work in process- ending work in process=
answer
cog manufactured
question
The balanced scorecard approach attempts to maintain as little inventory on hand as possible
answer
false
question
Many companies have significantly lowered inventory levels and costs using just-in-time inventory methods.
answer
true
question
Planning involves coordinating the diverse activities and human resources of a company to produce a smooth running operation.
answer
false
question
Product costs are also called inventoriable costs.
answer
true
question
The sum of the direct materials costs, direct labor costs, and beginning work in process is the total manufacturing costs for the year.
answer
false
question
Cost accounting is primarily concerned with accumulating information about product costs.
answer
true
question
A process cost accounting system is appropriate for similar products that are continuously mass produced.
answer
true
question
a job order cost system and a process cost system are two alternative methods for valuing inventories
answer
true
question
A company may use either a job order cost system or a process cost system, but not both.
answer
false
question
Accumulating and assigning manufacturing costs are two important activities in a job order cost system.
answer
true
question
Manufacturing costs are generally incurred in one period and recorded in a subsequent period.
answer
false
question
When raw materials are received, there's no effort at this point to associate the cost of materials with specific jobs.
answer
true
question
When raw materials are purchased, the Work in Process Inventory account is debited.
answer
false
question
Fringe benefits and payroll taxes associated with factory workers should be accumulated as a part of Factory Labor.
answer
true
question
In a job order cost system, each entry to the Work In Process Inventory account should be accompanied by a posting to one or more job cost sheets.
answer
true
question
Manufacturing overhead is the only product cost that can be assigned to jobs as soon as the costs are incurred
answer
false
question
There should be a separate job cost sheet for each job.
answer
true
question
The formula for the predetermined overhead rate is: estimated annual overhead costs/ an expected annual operating activity.
answer
true
question
A good system of internal control requires that the job order cost sheet be destroyed as soon as the job is complete.
answer
false
question
When goods are sold, the Cost of Goods Sold account is debited and Work in Process Inventory account is credited
answer
false
question
Overapplied overhead means that actual manufacturing overhead costs were greater than the manufacturing overhead costs applied to jobs.
answer
false
question
A cost accounting system consists of manufacturing cost accounts that are fully integrated into the general ledger of a company.
answer
true
question
The cost of raw materials purchased is credited to Raw Materials Inventory when materials are received.
answer
false
question
The predetermined overhead rate is based on the relationship between estimated annual overhead costs and expected annual operating activity expressed in terms of a common activity base.
answer
true
question
At the end of the year, underapplied overhead is usually credited to Cost of Goods Sold.
answer
false
question
Traditional costing systems use multiple predetermined overhead rates.
answer
false
question
Traditionally, overhead is allocated based on direct labor cost or direct labor hours.
answer
true
question
Activity-based costing allocates overhead to multiple cost pools and assigns the cost pools to products using cost drivers.
answer
true
question
a cost driver does not generally have a direct cause-effect relationship with the resources consumed
answer
false
question
To achieve accurate costing, a high degree of correlation must exist between the cost driver and the actual consumption of the activity cost pool.
answer
true
question
Low-volume products often require more special handling than high-volume products.
answer
true
question
ABC leads to enhanced control over overhead costs.
answer
true
question
ABC usually results in less appropriate management decisions.
answer
false
question
ABC eliminates all arbitrary cost allocations.
answer
false
question
ABC is particularly useful when product lines differ greatly in volume and manufacturing complexity
answer
true
question
Activity-based management focuses on reducing costs and improving processes
answer
true
question
Any activity that increases the cost of producing a product is a value-added activity.
answer
false
question
Non-value-added activities increase the cost of a product but not its market value.
answer
true
question
Machining is a non-value-added activity.
answer
false
question
The overall objective of installing ABC in service firms is no different than it is in a manufacturing company.
answer
true
question
What sometimes makes implementation of activity-based costing difficult in service industries is that a smaller proportion of overhead costs are company-wide costs.
answer
false
question
Plant management is a batch-level activity.
answer
false
question
Painting is a product-level activity.
answer
false
question
Quality control is less important in just-in-time than in traditional manufacturing philosophies
answer
false
question
Inventory storage costs are reduced in just-in-time processing.
answer
true
question
Inventory system in which goods are manufactured or purchased just as they are needed for use.
answer
Just-in-time (JIT) inventory
question
A method of allocating overhead based on each product's use of activities in making the product
answer
Activity-based costing
question
Systems that are especially important to firms adopting just-in-time inventory methods.
answer
Total quality management (TQM)
question
One part of the value chain for a manufacturing company.
answer
Research and development, and product design
question
Research and development, and product design
answer
Service industries
question
A performance-measurement approach that uses both financial and nonfinancial measures, tied to company objectives, to evaluate a company's operations in an integrated fashion
answer
Balanced scorecard
question
manufacturing overhead rate for the year
answer
expected total cost for year / estimated hours
question
predetermined overhead rate
answer
estimated overhead / direct labor cost
Get an explanation on any task
Get unstuck with the help of our AI assistant in seconds
New