question

Managerial accounting supports the management process most significantly by: A. measuring and reporting financial results after the fact. B. determining the goals and objectives of the entity. C. helping management identify and achieve goals and measure the degree to which the goals have been accomplished. D. establishing operating policies to be followed during a period of time.

answer

c

question

Activities included in a generally accepted definition of management accounting include: A. planning, organizing, controlling. B. planning, operating, reporting. C. preparing, operating, creating. D. preparing, organizing, converting.

answer

A

question

Which of the following activities is not part of the management planning and control cycle? A. data collection and performance feedback. B. implementation of plans. C. providing information to investors and creditors. D. revisiting plans.

answer

C

question

Performance analysis in the planning and control cycle relates to the act of: A. planning. B. managing. C. controlling. D. revising plans.

answer

C

question

Which of the following statements does not describe a characteristic of management accounting? A. Management accounting must conform to GAAP. B. Approximate amounts rather than accurate amounts or refined estimates are often used in management accounting. C. Management accounting places a great deal of emphasis on the future. D. Management accounting is more concerned with units of the organization rather than with the organization as a whole.

answer

A

question

Managerial accounting, as compared to financial accounting: A. must conform to GAAP. B. places a great deal of emphasis on historical transactions. C. uses frequent and prompt control reports. D. focuses on information prepared for the investors and creditors.

answer

C

question

Management accounting is: A. a highly technical subject that people in personnel or engineering should not be expected to understand. B. performed by individuals who seldom work with people in other functional areas of the organization. C. the principal activity involved in determining the goals and objectives of the entity. D. an activity that gets involved with virtually all of the other functional areas of the organization.

answer

D

question

Managerial accounting, as opposed to financial accounting, is primarily concerned with: A. preparing the current balance sheet of the company. B. present and future planning and control. C. providing information to investors and creditors. D. historical results of operations.

answer

B

question

Managerial accounting can best be described as: A. the preparation and distribution of the financial statements. B. the preparation and distribution of the corporate tax return. C. the preparation and use of accounting information within the organization. D. meeting the requirements of generally accepted accounting principles.

answer

C

question

Simplifying assumptions made when using cost behavior pattern data include: A. relevant range and liquidity. B. fixed activity and linearity. C. relevant range and linearity. D. activity range and variability

answer

C

question

The relevant range concept refers to: A. a firm's range of profitability. B. a firm's range of sales. C. a firm's range of rates of return. D. a firm's range of activity.

answer

D

question

Which of the following is another term for mixed costs? A. semifixed costs. B. semivariable costs. C. component costs. D. none of the above.

answer

B

question

As the total volume of activity changes: A. the total of variable costs changes. B. the total of fixed costs changes. C. variable costs per unit change. D. fixed costs per unit stay the same.

answer

A

question

Expressing fixed costs on a per unit basis of activity is misleading because: A. total fixed costs decrease as activity decreases. B. total fixed costs increase as activity increases. C. fixed cost per unit increase as activity increases. D. fixed cost per unit decrease as activity increases.

answer

D

question

The formula for expressing the total of a fixed, variable, or mixed cost at any level of activity is: A. total cost = fixed cost + (variable rate * volume of activity). B. total cost = fixed cost * volume of activity. C. total cost = fixed cost * variable rate. D. total cost = fixed cost - variable cost.

answer

A

question

When a cost formula is used to describe a mixed (semi-variable) cost behavior pattern, total costs are expected to increase and per unit variable costs are expected to: A. increase as the level of activity increases. B. decrease as the level of activity decreases. C. decrease as the level of activity increases. D. remain constant as the level of activity increases.

answer

D

question

Cost behavior refers to: A. costs that are both good and bad. B. costs that increase at a quicker rate than others. C. costs that decrease at a quicker rate than others. D. costs that are variable or fixed. E. none of the above.

answer

D

question

When the cost behavior pattern has been identified as fixed at a certain volume of activity: A. any change in volume will probably cause the cost to change. B. it is appropriate to express the cost on a per unit of activity basis. C. the total cost will not change even if the volume of activity changes substantially. D. the total cost may change if the volume of activity changes substantially.

answer

D

question

Knowledge about the behavior pattern of a cost is important to understanding the effect on net income of a change in sales volume because as sales volume changes: A. net income will change proportionately. B. the effect on net income will depend on the behavior pattern of various costs. C. fixed costs will rise proportionately. D. variable costs will not change.

answer

B

question

As the level of activity increases: A. fixed cost per unit increases. B. variable cost per unit increases. C. variable cost per unit decreases. D. fixed cost per unit decreases.

answer

D

question

As the level of activity decreases: A. fixed cost per unit decreases. B. variable cost per unit decreases. C. fixed cost remains constant in total. D. variable cost remains constant in total.

answer

C

question

An example of a cost that is likely to have a variable behavior pattern is: A. sales force salaries. B. depreciation of production equipment. C. salaries of production supervisors. D. production labor wages.

answer

D

question

An example of a cost likely to have a fixed behavior pattern is: A. sales force commission. B. production labor wages. C. advertising cost. D. electricity cost for packaging equipment

answer

C

question

An example of a cost likely to have a mixed behavior pattern is: A. sales force commission. B. raw material cost. C. depreciation of production equipment. D. electricity cost for the manufacturing plant.

answer

D

question

The term "relevant range" refers to: A. the range of activity where costs will fluctuate. B. the range of activity where fixed costs change as activity changes. C. the range of activity where total variable cost remains constant as activity changes. D. the range of activity where cost relationships are valid.

answer

D

question

When the firm's activity requires it to operate at a level above the upper boundary of the relevant range, fixed expenses are likely to: A. increase. B. decrease. C. remain the same. D. be eliminated.

answer

A

question

Which of the following is the correct calculation for the contribution margin ratio? A. sales revenue divided by variable costs. B. sales revenue divided by contribution margin. C. contribution margin divided by sales revenue. D. contribution margin divided by variable costs.

answer

C

question

The cost of a single unit of production in excess of the break-even point in units is: A. its fixed cost and variable cost. B. its fixed cost only. C. its variable cost only. D. none of the above.

answer

C

question

What percentage of the contribution margin is profit on units sold in excess of the break-even point? A. It's 50% to the contribution margin ratio. B. It's equal to the variable cost ratio. C. It's equal of the gross profit ratio. D. It's 100%.

answer

D

question

To which function of management is CVP analysis most applicable? A. Planning. B. Organizing. C. Directing. D. Controlling.

answer

A

question

The scattergram allows cost-volume relationships to be visually scanned for outlier observations that should be: A. included in the calculation of the cost formula of a mixed cost. B. ignored in the calculation of the cost formula of a mixed cost. C. included in the calculation of the fixed cost component of the mixed cost. D. included in the calculation of the variable rate component of the mixed cost.

answer

B

question

When the high-low method of estimating a cost behavior pattern is used: A. cost and volume data must be reviewed for outliers. B. the direct result of the high-low calculations is the fixed expense amount. C. the highest and lowest sales price and volume amounts are used in the calculation. D. the resulting cost formula will explain total cost accurately for every value between the high and low volumes.

answer

A

question

An income statement organized by cost behavior does not include: A. operating income. B. gross profit. C. contribution margin. D. revenues

answer

B

question

Operating income using the contribution margin format income statement is calculated as: A. revenue - variable expenses = contribution margin - fixed expenses. B. revenue - variable expenses = gross profit - fixed expenses. C. revenue - cost of goods sold = contribution margin - fixed expenses. D. revenue - cost of goods sold = contribution margin - operating expenses.

answer

A

question

The contribution margin format income statement: A. results in a larger amount of operating income than the traditional income statement format. B. uses a behavior pattern classification for costs rather than a functional cost classification approach. C. is most frequently used for financial statement reporting purposes. D. emphasizes that all costs change in proportion to any change in revenues

answer

B

question

Which of the following terms do not appear on the contribution margin format income statement? A. gross profit. B. contribution margin. C. operating income. D. variable expenses.

answer

A

question

The contribution margin format income statement is organized by: A. responsibility centers. B. functional classifications. C. sales territories. D. cost behavior classifications.

answer

D

question

A 10% change in a firm's revenues is likely to result in a change of more than 10% in the firm's operating income because: A. not all of the firm's costs will change in proportion to the revenue change. B. the firm has financial leverage. C. the contribution margin ratio will change in proportion to the revenue change. D. only fixed expenses will change in proportion to the revenue change.

answer

A

question

A management decision that would have a long term influence on the operating leverage of a firm would be: A. increasing the advertising budget. B. substituting robots for hourly paid production workers. C. increasing prices in proportion to raw material cost increases. D. having a season-end sale of seasonal products

answer

B

question

The contribution margin ratio always decreases when the: A. break-even point decreases. B. fixed expenses increase. C. selling price increases and the variable costs remain constant. D. variable cost increase and the selling price remains constant.

answer

D

question

ABU Co. has several products, each with a different contribution margin ratio. If the same number of units were sold in July as in June, but the sales mix changed: A. operating income would be the same in June and July. B. fixed expenses in July would be in a different relevant range than in June. C. the company's overall contribution margin ratio would be the same in June and July. D. total contribution margin in July would be different from that in June.

answer

D

question

Each of a company's two product lines has a different contribution margin ratio. If the company's total sales remain the same but the sales mix shifts toward selling more of the product with the higher contribution ratio, which of the following is true? A. operating income will increase. B. the average contribution margin ratio will increase. C. the break-even point will decrease. D. all of the above are true.

answer

D

question

Each of a company's several product lines has a different contribution margin ratio. Total sales in 2017 were 20% higher than total sales in 2016. Total contribution margin for 2017 will be: A. the same as it was in 2016, regardless of changes in sales mix. B. 20% higher than it was in 2016, regardless of changes in sales mix. C. more than 20% higher than it was in 2016, if the sales mix changes and proportionately more high contribution margin ratio products are sold in 2017 than in 2016. D. less than 20% higher than it was in 2016, if the sales mix changes and proportionately more high contribution margin ratio products are sold in 2017 than in 2016.

answer

C

question

Which activity of the management planning and control process occurs in each phase of the cycle? A. planning. B. managing. C. controlling. D. decision making.

answer

D

question

Management salaries are an example of a ____________ cost behavior pattern. A. variable B. semivariable C. fixed D. mixed

answer

C

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