question

________ gathers, summarizes, and reports on the financial impact of changes to business operations.

answer

managerial accounting

question

Creating budgets are part of which primary management responsibility?

answer

Planning

question

Which of the following is being fulfilled when management compares the budget to actual results?

answer

Controlling

question

When management uses feedback to take corrective action on the budgets, which of the following management responsibilities are being fulfilled?

answer

Controlling

question

Using product cost information to determine sales prices is an example of

answer

directing

question

When management reviews product sales reports to set goals and objectives and then evaluates the results of sales operations against the plan and performance results, which of management's three primary responsibilities is fulfilled?

answer

Directing, controlling, and planning

question

Overseeing the day-to-day operations of a company is an example of which of the following management functions?

answer

directing

question

How often should managerial accounting reports be prepared?

answer

as often as necessary

question

Which of the following statements is true regarding managerial accounting information?

answer

Managerial accounting information emphasizes relevance.

question

The standards in the IMA Statement of Ethical Professional Practice includes

answer

Competence, Confidentiality, Integrity, and Credibility

question

Inflating your expenses for a company-sponsored conference that discredits the profession is a violation of what ethical standard?

answer

Integrity

question

What ethical standard is being violated when you tell a friend that the company you work for is going to report lower than expected earnings next week?

answer

Confidentiality

question

Which of the following types of companies has raw materials, work in process and finished goods inventory?

answer

Manufacturers

question

Schlabig & Associates, a public accounting firm that provides business consulting to a consumer, is what type of company?

answer

Service

question

What type of company resells tangible products it purchases ready-made from suppliers?

answer

Merchandiser

question

Conversion costs consist of

answer

direct labor and manufacturing overhead

question

Prime costs consist of

answer

direct materials and direct labor

question

Rent on a factory building would be considered to be a ________ cost.

answer

product

question

Manufacturers consider selling and administrative costs to be

answer

period

question

The two basic types of costing systems are

answer

job costing and process costing

question

A manufacturer of plywood would use what type of product costing system?

answer

process costing

question

A manufacturer of luxury yachts would use which type of costing system?

answer

job costing

question

Underallocated manufacturing overhead results when

answer

actual overhead is greater than allocated overhead

question

In ABC, how is the activity allocation rate computed?

answer

The total estimated activity cost pool is divided by the total estimated activity allocation base

question

Variable costs are described by which of the following statements?

answer

They are fixed per unit and vary in total.

question

With respect to total fixed costs, which of the following statements is true?

answer

They will remain the same as production levels change within the relevant range.

question

When the number of units produced is less than the number of units sold, how does operating income under variable costing differ from operating income under absorption costing?

answer

It is higher than operating income under absorption costing

question

How is operating income affected if the number of units sold exceeds the number of units produced?

answer

Operating income would be higher under a variable costing income statement.

question

Contribution margin ratio is computed by

answer

dividing contribution margin by sales revenue.

question

The unit contribution margin is computed by

answer

subtracting the variable cost per unit from the sales price per unit.

question

To find the number of units that need to be sold in order to breakeven or generate a target profit, the formula used is

answer

(fixed expenses + operating income) ÷ contribution margin per unit.

question

If the sales price per unit increases while the variable cost per unit and total fixed costs remain constant, which of the following statements is true?

answer

The contribution margin increases and the breakeven point decreases.

question

If the variable cost per unit decreases while the sales price per unit and total fixed costs remain constant, which of the following statements is true?

answer

The contribution margin increases and the breakeven point decreases.

question

If the variable cost per unit increases while the sale price per unit and total fixed costs remain constant, which of the following statements is true?

answer

Breakeven point in units increases.

question

A "relevant cost" is best described by which of the following?

answer

Expected future costs that differ among alternatives

question

Managers should consider ________ when making any sort of decision.

answer

revenues that differ among alternatives

question

When the extra revenue from processing further is less than the extra cost of processing further, the best decision would be to

answer

not process further

question

In a sell or process further decision, the company should process further if

answer

the extra cost of processing further is less than the extra revenue.

question

In which of the following company types would the manager combine cost of goods sold, inventory, and purchases into one budget?

answer

merchandising

question

The human resources department for Kohl's Department Stores may be classified as a(n)

answer

cost center

question

All of the following are potential advantages of decentralization except

answer

potential duplication of costs

question

Which of the following is the operating income an investment center generates before subtracting common fixed costs that are allocated to the center?

answer

segment margin

question

The difference between the actual revenues and expenses and the master budget is known as a

answer

master budget variance

question

A favorable direct materials price variance and an unfavorable direct materials quantity variance might indicate which of the following?

answer

Less expensive, inferior materials requiring more than the standard amount were used in production.

question

How do you calculate the predetermined manufacturing overhead rate used to allocate manufacturing overhead costs?

answer

By dividing the total estimated manufacturing overhead costs by the total estimated amount of the allocation base

question

If manufacturing overhead has been overallocated during the period, and most of the jobs produced have been sold, then

answer

Cost of Goods Sold on the income statement should be decreased.

question

Absorption costing formula

answer

Sales Revenue - COGS = Gross Profit -Operating Expenses =Operating Income

question

Variable Costing formula

answer

Sales Revenue - Variable Costs = Contribution Margin - Fixed Costs =Operating Income

question

contribution margin

answer

sales rev- variable expenses

question

contribution margin ratio

answer

contribution margin/ sales rev

question

sales margin

answer

operating income/sales

question

capital turnover

answer

sales/total assets

question

ROI

answer

operating income/ total assets -sales margin * capital turnover

question

DM Price variance

answer

(AP-SP) *AQP

question

DM Quantity variance

answer

(AQ-SQ) *AH

question

DL rate variance

answer

(AR-SR) * AH

question

DL efficiency variance

answer

(AH worked - SH) * SR

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