Managerial Accounting – Flashcards
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What is managerial accounting?
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The provision of accounting information for a company's internal users
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Setting objectives and identifying methods to achieve those objectives is called
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planning
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The process of choosing among competitive alternatives is called
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decision making
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Which of the following is a characteristic of managerial accounting?
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There is an internal focus
Subjective information may be used
There is an emphasis on the future
It is broad based and multidisciplinary
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An effective managerial accounting system should track information about an organizations activities in which of the following areas?
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Development
Marketing
Production
Design
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In terms of strategic positioning, which two general strategies may be chosen by a company?
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Cost leadership and product differentiation
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What is not a common form of certification for managerial accountants?
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certificate in external auditing
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The chief accounting officer for a firm is the
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Controller
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What is typically found in a corporation's code of ethics?
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Compliance with the rule of law
Integrity
Honesty
Competence
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Accumulating costs means that
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costs must be measured and tracked
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Product (or manufacturing) costs consist of
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prime costs and manufacturing overhead
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Which of the following is an indirect cost?
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The cost of restriping a the parking lot at a perfume factory
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Bobby Dee's is an owner operated company that details automobiles. Bobby Dee's is which of the following?
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Service Firm
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Kellogg's makes a variety of breakfast cereal. Kellogg's is which of the following?
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Manufacturing
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Target is which of the following?
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Retailer (only sells, doesn't make anything)
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Stone Inc. is a company that purchases goods from overseas and resells them to gift shops in the United States. Stone Inc. is which of the following?
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Wholesaler
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Which of the following is a period expense?
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CEO Salary
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A factor that causes or leads to a change in a cost or activity is a
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Cost Driver
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Which of the following would probably be a variable cost in a soda bottling plant?
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Bottles
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Which of the following would be a fixed cost in an automobile insurance company?
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The salary of customer service representatives
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An advantage of the high low method is that it
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is objective
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An advantage of the scattergraph method is that it
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is descriptive of nonlinear data
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The total cost for monthly supervisory cost in a factory is $4,500 regardless of how many hours the supervisor works or the quantity of output achieved. This cost
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is strictly fixed
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If the variable cost per unit goes down,
Contribution Margin does what?
Break-Even Point does what?
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Increases
Decreases
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The amount of revenue required to earn a targeted profit is equal to
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total fixed cost plus targeted profit divided by contribution margin ratio
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Break-even revenue for the multiple-product firm can
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be calculated by dividing total fixed cost by the overall contribution margin ratio
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An important assumption of cost-volume-profit analysis is that
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both costs and revenues are linear functions
all cost and revenue relationships are analyzed within the relevant range
there is no change in inventories
the sales mix remains constant
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The use of fixed costs to extract higher percentage changes in profits as sales activity changes involves
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operating leverage
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If the margin of safety is 0, then
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the company is precisely breaking even
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The contribution margin is the
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difference between sales and the total variable cost
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If a company's total fixed cost decreases by $10,000, which of the following will be true?
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The variable cost ratio will be unchanged
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Solemon Company has total fixed cost of $15,000, variable cost per unit is 6%, and a price of $8. If Solemon wants to earn a targeted profit of $3,600, how many units must be sold?
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9,300
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The ending balance of which of the following accounts is calculated by summing the totals of the open (unfinished) job-order cost sheets?
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Work In Process
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In a normal costing system, the cost of a job includes
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actual direct materials, actual direct labor, and estimated (applied) overhead
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The predetermined overhead rate equals
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estimated overhead divided by estimated activity level for a period
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The job-order cost sheet is a subsidiary account to
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Work In Process
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Applied Overhead is
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an important part of normal costing
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The overhead variance is overapplied if
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actual overhead is less than applied overhead
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Which of the following is typically a job-order costing firm?
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Large regional medical center
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Which of the following is typically a process-costing firm?
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Paint Manufacturer
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When materials are requisitioned for use in production in a job-order costing firm, the cost of materials is added to the
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work-in-process account
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When a job is completed, the total cost of the job is
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added to the finished goods account
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The costs of a job are accounted for on the
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job-order cost sheet
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Wilson Company has a predetermined overhead rate of $5 per direct labor hour. The job-order cost sheet for Job 145 shows 500 direct labor hours costing $10,000 and materials requisitions totaling $17,500. Job 145 had 1,000 units completed and transferred to Finished Goods. What is the cost per unit for Job 145?
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$30
