Acctg202: Exam 1 – Flashcards
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American Red Cross
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Which of the following organizations would be least likely to have a company objective involving the maximization of shareholder value? -The Walt Disney Company -Marriot Hotels -Southwest Airlines -The American Red Cross -All of the above would be equally likely to establish the objective described.
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Managerial accountants play an integral leadership role on an organization's management team.
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Which of the following statements is true? A) Managerial Accountants are "number crunchers" who provide critical information to decision makers but do not themselves contribute to the decision making process. B) The role of the managerial accountant has not changed in the last twenty years. C) Managerial accountants play an integral leadership role on an organization's management team. D) The activities performed by the management accountant are administrative in nature and typically do not add value to the company. E) A and D are both true.
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Decision making, planning, directing operational activities, controlling
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In your assigned readings the authors described four fundamental management processes that help organizations to attain their goals. Which of the below choices correctly depicts these four day-to-day management activities? -Decision making -Planning -Innovation & Feedback -Directing operational activities -Controlling
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Managerial accounting reports typically focus on the enterprise in its entirety.
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Which of the following statements is false? -Managerial accounting need not conform to GAAP. -Managerial accounting reports typically focus on the enterprise in its entirety. -Managerial accounting is not required. -Financial accounting is required. -Managerial accounting does not require a separate accounting system.
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None of the above
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Which of the following positions is most likely a staff position? - Production manager - Marketing manager - Inventory manager - Sales manager - None of the above
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It is not possible to provide too much detail.
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Which of the following is false? - An understanding of human behavior is essential to management accountants. - The cost of gathering information should be less than the benefit derived. - Information can be purchased, produced, and consumed. - It is not possible to provide too much detail. - The need for information is the driving force behind managerial accounting.
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ABM = activity-based manufacturing (ABM = activity-based management)
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Which of the following is false? - Just-in-time systems rely on a "pull" approach to controlling manufacturing. - TQM = total quality management - One objective of a cost management system is to identify and eliminate non-value added activities. - ABM - activity-based manufacturing - Eliminating waste is one of the efforts sustained in continuous improvement
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Value chain
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An organization's set of linked activities, from securing basic raw materials to the ultimate delivery of the product or service is called the organization's...? -theory of constraints -value chain -activity-based management of activities -strategic cost management -cost drivers
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theory of constraints
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The approach that examines an organization's chain of linked activities, and seeks to find optimal cost-effective ways to alleviate the most constraining activities is called which of the following? -theory of constraints -value chain -Activity-based management of activities -Strategic costs management -Bottleneck operations
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Strategic cost management
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The overall recognition of the importance of cost relationships among the activities in the value chain, and the process of managing those cost relationships to the firm's advantage is called which of the following? -The theory of constraints -The value chain -Activity-based management of activities -Strategic cost management -Downstream and upstream contributions
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Sarbanes-Oxely Act
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Which of the following limits the type of nonaudit work that auditing firms can do for their clients? A) Security and Exchange Commission (SEC) B) Sarbanes-Oxely Act C) Public Company Accounting Oversight Board (PCAOB) D) Institute of Management Accountant's Statement of Ethical Professional Practice E) Strategic cost management
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CMA (Certified Management Accountant)
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Which of the below acronyms describes the professional certification unique to managerial account in the United States? A) IMA B) CPA C) RIA D) CMA E) CFO
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Product managers
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Which of the following end user(s) would be most likely to include information provided by the managerial accounting system in their decision making process? -Stockholders -Lenders -Consumer groups -Product managers -All the above would likely consider managerial accounting information in their decision making process.
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All of the above
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The managerial accounting adds value to an organization by pursuing five major objectives. Which of the following is an objective of managerial accounting? - Providing information for decision making and planning. - Assisting managers in directing and controlling operational activities. - Measuring the performance of activities within an organization. - Assessing the organization's competitive position. - All of the above
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Integrity
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Under which ethical standard of conduct does the managerial accountant have the responsibility to abstain from engaging in or supporting any activity that might discredit the profession? -Competence -Confidentiality -Integrity -Credibility -None of the above
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a cost
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The sacrifice made usually measured by the resources given up, to active a particular purpose is called which of the following? -a cost -an expense -a product cost -an inventoriable cost -a period cost
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initially capitalized on the balance sheet
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Product costs are: (which of the following?) -expensed in the period incurred -initially capitalized on the balance sheet -treated in the same manner as period costs -always classified as an indirect cost -immediately subtracted from a cost of goods sold
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Product costs eventually affect both the balance sheet and the income statement.
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Which of the following statements is true? -Product costs affect only the balance sheet. -Product costs affect only the income statement. -Period costs affect only the balance sheet. -Product costs eventually affect both the balance sheet and the income statement. -None of the above
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Raw Materials, Work-in-Process, Finished Goods
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Manufacturers, such as Caterpillar, have three broad types of inventory accounts showing up on their Balance Sheet. Which of the following statements correctly depicts these accounts? -Direct Materials, Work-in-Process, Finished Goods -Indirect Material, Job Shop, Manufacturing Overhead -Raw Materials, Work in Process, Cost of Goods Manufactured -Direct Materials, Direct labor, Manufacturing Overhead -Raw Materials, Work-in-Process, Finished Goods
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service provider
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Which of the following types of business would not incur a product cost? -retailer -wholesaler -manufacturer -service provider -all of the above would incur a product cost
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All of the above would incur a period cost.
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Which of the following types of business would not incur a period cost? -retailer -wholesaler -manufacturer -service provider -All of the above would incur a period cost.
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Overtime premiums should be treated s a component of manufacturing overhead.
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Which of the following statements is (are) correct? -Overtime premiums should be treated s a component of manufacturing overhead. -Overtime premiums should be treated s a component of direct labor. -Idle time should be treated as a component of direct labor. -Idle time should be accounted for as a special type of loss. -Both "B" and "C" are correct
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C) Mass customization
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Which of the following production processes is described as a production process with high production volume, and with many standardized components and/or customized combination of components? A) Batch B) Assembly line C) Mass customization D) Continuous flow E) Job shop
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A) Batch
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Which of the following production processes is described as a process with multiple products and low volume? A) Batch B) Assembly line C) Mass customization D) Continuous flow E) Job shop
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C) Salary paid to production line worker
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Which of the following costs is a conversion cost? A) Direct materials B) Salary paid to sales manager C) Salary paid to production line worker D) Only (B) and (C) E) Only (A) and (C)
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D) Controllable cost.
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Which of the following refers to a cost that can be substantially influenced by a manager? A) Sunk cost. B) Direct cost. C) Opportunity cost. D) Controllable cost. E) Sunk cost
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C) Opportunity cost.
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Which of the following refers to a cost that is a benefit sacrificed when the choice of one action precludes taking an alternative course of action? A) Out-of-pocket cost. B) Direct cost. C) Opportunity cost. D) Controllable cost. E) None of the above
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A) A product-costing system accumulates the costs incurred in the production process.
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Which of the following statements is true? A) A product-costing system accumulates the costs incurred in the production process. B) A retailer would not incur product cost. C) Information produced by a product-costing system is used only for internal decision making. D) All of the above are true E) Only A and B are true
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E) All of the above
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A product-costing system is needed for which of the following? A) Financial accounting B) Managerial accounting C) Cost management D) Report to interested organizations E) All of the above
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B) Raw-materials inventory, work-in-process inventory, and finished-goods inventory.
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The typical inventories carried by a manufacturer include which of the following? A) Raw-materials inventory, work-in-process inventory, and merchandise. B) Raw-materials inventory, work-in-process inventory, and finished-goods inventory. C) Office supplies inventory, work-in-process inventory, and merchandise. D) Raw-materials inventory, finished-goods inventory, and cost of goods sold. E) None of the above
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C) Disney Animation Studios when it produces Tangled an animated feature scheduled to be released in November of 2010.
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Which of the following businesses is most likely to use a job order costing system? A) Kodak when it produces its TRI-X 400 black and white film used by professional photographers. B) Nabisco when it produces Oreo brand sandwich cookies for retail grocery chains. C) Disney Animation Studios when it produces Tangled an animated feature scheduled to be released in November of 2010. D) All of the above businesses would use a job order costing system. E) None of the above
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C) Job-cost record
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Which of the following is used to accumulate the costs of direct material, direct labor, and manufacturing overhead costs for a particular job or batch? A) Bill of materials B) Material requisition form C) Job-cost record D) Purchase order E) Purchase requisition
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D) Both (B) and (C)
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Which of the following is a source document? A) Bill of materials B) Material requisition form C) Job-cost records D) Both (B) and (C) E) Both (A) and (C)
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C) Finished-Goods Inventory
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In a job-order costing system, which account would be debited when recording the cost of goods manufactured in a particular period? A) Work-in-Process Inventory B) Raw-Material Inventory C) Finished-Goods Inventory D) Cost of Goods Manufactured E) Cost of Goods Sold
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B) Manufacturing Overhead
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Time records for the two-week pay period total $34,500, of which $31,000 can be charged to specific jobs. The required accounting entry will include a debit for $3,500 to which of the following accounts? A) Work-in-Process Inventory B) Manufacturing Overhead C) Wages Payable D) Indirect Labor E) Wages Expense
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E) 200%
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Job 196 was charged $45,000 for direct materials and $20,000 for direct labor. The total charges to the job-cost record for Job 196 were $105,000. What was the manufacturing overhead application rate as a percentage of direct-labor dollars? A) 50% B) 75% C) 100%% D) 150% E) 200%
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C) By department
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Under process-costing systems, how are costs accumulated? A) By product B) By job C) By department D) By time period E) None of the above
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D) A credit to Work-in-Process Inventory—Production Department A
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When Production Department A transfers units to Production Department B for further processing the journal entry will include which of the following? A) A debit to Work in Process, Production Department A B) A credit to Transferred-Out Costs, Production Department A C) A debit to Finished Goods Inventory—Production Department A D) A credit to Work-in-Process Inventory—Production Department A E) None of the above
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B) Cost of Goods Sold and Finished Goods Inventory
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Which accounts are affected when finished goods are sold? A) Cost of Goods Sold and Work-in-Process Inventory B) Cost of Goods Sold and Finished Goods Inventory C) Finished Goods Inventory and Work-in-Process Inventory D) Manufacturing Overhead and Work-in-Process Inventory E) None of the above
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B) 9,900
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The beginning work-in-process inventory consists of 1,500 units that are 30% complete with respect to conversion costs, and 100% complete with respect to direct material costs. Ten thousand units were started during the period. There are 2,000 units in process at the end of the accounting period, which are 20% complete with respect to conversion costs, and 100% complete with respect to direct material costs. Using the weighted-average method of process costing, calculate the equivalent units of conversion. A) 13,500 B) 9,900 C) 10,450 D) 12,450 E) 11,500
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D) 11,500
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The beginning work-in-process inventory consists of 1,500 units that are 30% complete with respect to conversion costs and 100% complete with respect to direct material costs. Ten thousand units were started during the period. There are 2,000 units in process at the end of the accounting period, which are 20% complete with respect to conversion costs, and 100% complete with respect to direct material costs. Under the weighted-average method of process costing, what are the equivalent units of direct materials? A) 13,500 B) 12,000 C) 10,450 D) 11,500 E) 9,900
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C) Departmental Production Report
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What is the key document in a typical process-costing system called? A) Job-cost Record or Job-cost Sheet B) Schedule of Cost of Goods Manufactured C) Departmental Production Report D) Income Statement E) Balance Sheet
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A) As units and costs of the current period
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When using the weighted-average method of process costing, how are the beginning work-in-process units and costs treated? A) As units and costs of the current period B) As units and costs of the subsequent period C) As units and costs of a previous period D) Ignored in the calculation of the cost per equivalent unit E) None of the above
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D) Either (B) or (C)
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A traditional product-costing system, in which a single cost driver is used to assign overhead costs to products, is often referred to as which of the following? A) Activity-based costing system B) Through-put costing system C) Volume-based costing system D) Either (B) or (C) E) None of the above
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C) Identifying activity cost pools
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Stage one of an activity-based costing (ABC) system involves which of the following? A) Identifying cost drivers B) Computing pool rates C) Identifying activity cost pools D) Both A and B E) All of the above
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B) An activity based costing system will typically utilize more cost drivers than a volume based costing system.
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Identify the true statement(s) below. A) A volume based costing system will typically utilize more cost drivers than an activity based costing system. B) An activity based costing system will typically utilize more cost drivers than a volume based costing system. C) A volume based costing system will typically utilize more cost pools than an activity based costing system. D) The number of cost pools and cost drivers does not typically differ significantly between an activity based costing system and a volume based costing system. E) Both A and C are true.
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A) (1) Compute the pool rate, (2) compute total activity cost for each product line, and (3) compute product cost per unit for each product line.
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Which is the proper order of ABC calculations during the completion of stage two of an ABC system when there are diverse product lines? A) (1) Compute the pool rate, (2) compute total activity cost for each product line, and (3) compute product cost per unit for each product line. B) (1) Compute total activity cost for each product line, (2) compute the pool rate, and (3) compute product cost per unit for each product line. C) (1) Compute product cost per unit for each product line, (2) compute the pool rate, and (3) compute total activity cost for each product line. D) (1) Compute product cost per unit for each product line, (2) compute total activity cost for each product line, and (3) compute the pool rate. E) (1) Compute product cost per unit for each product line, (2) compute the pool rate, and (3) compute the cost driver.
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D) All of the above
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Which of the following should be considered when choosing the proper cost-driver bases? A) Cause and effect relationship between the activity and the cost B) Cost-benefit trade offs C) Behavioral effects D) All of the above E) None of the above
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B) Activity dictionary
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Which is a complete listing of activities identified and used in ABC analysis? A) Bill of activities B) Activity dictionary C) Storyboarding D) Paper trail E) None of the above
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C) Activity-based costing
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Customer-profitability analysis uses which of the following to determine the costs and profit associated with serving particular customers? A) Volume-based costing B) Through-put costing C) Activity-based costing D) Activity-based management E) None of the above
