Managerial Accounting Ch 1-5 Answers – Flashcards
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A distinguishing feature of managerial accounting is
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Very detailed reports
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What activities and responsibilities are NOT associated with management functions?
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Accountability
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Which of the following is Not a management function?
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Constraining
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The work of factory employees that can be physically and directly associated with converting raw material into finished goods is
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Direct Labor
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Manufacturing costs include
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Direct materials, Direct Labor, and Manufacturing Overhead
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A major purpose of cost accounting
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Measure, record, and report product costs
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The two basic types of cost accounting systems are
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Job order and process cost system
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Processing cost is used when
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The production process is continuous
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As December 31, 2008, Stand Still Industries had $1500 of raw materials inventory. At the beginning of 2008, there was $1,200, of raw material on hand. During the year the company purchased $183,000 of materials; However is paid for only $175,500. How much inventory was repositioned for use on jobs during 2008?
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$182,700 Beginning inventory- $1,200 Purchased- $183,000 Ending inventory- $1,500 Total- $183,000+ $1,200- $1,500= $182,700
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Which of the following best describes a job cost sheet?
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It is a form used to record the costs chargeable to a specific job and to determine the total and units cost of the job completed.
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In a process cost system,
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A work in process account is maintained for each process
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Which of the following manufacturing cost elements occurs in a process cost system?
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ALL OF THEM (Direct Material, Direct Labor Manufacturing Overhead)
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Material requisition are
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Generally used less frequently in process costing than job order costing
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A product requires processing in two departments, Department A and then Department B, before it is completed. Costs transferred out of Department A will be transferred to
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Work in process- Department B
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Granter company had the following department information about physical units and percentage of completion Physical Units Work in process, May 1 (60%) 36,000 Completed and transferred out 90,000 Work in process, May 31 (40%) 30,000 If material are added at the beginning of the production process, what is the total number of equivalent units for materials during May?
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120,000
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An activity that has a direct cause-effect relationship with the resource consumed is an
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Cost driver
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Activity based costing
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Allocates overhead to multiple activity cost pools and it assigns the activity cost pools to products and services by means of cost drivers
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Ordering materials, setting up ,machines, assembling products, and inspecting products are examples of
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Overhead cost pools
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The first step in activity based costing is to
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Identify and classify the major activities involved in the manufacturing of specific products
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One of Jetson company cost pools is inspecting with estimated overhead of $100,000 Jetson products throw rugs (700 inspections) and area rugs (1,300 inspections). How much of the inspecting cost pools should be assigned to the throw rugs?
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$35,000 100,000/2000= $50 $50*700= $35,000
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For an activity base to be useful in cost behavior analysis
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There should be a correlation between changes in the level of activity and change in costs
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A variable cost is a cost that
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Varies in total in proportion to changes in the level of activity
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Units variable cost Unit fixed cost (a) Increase Decrease (b) Remain constant Remain constant (c) Decrease Remain constant (d) Remain constant Decrease
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Remain Constant, Decrease
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A fixed cost is a cost which
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Remains constant in total with changes in the level of activity
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The equation which reflects a CVP income statement
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Sales- variable cost- Fixed cost= Net Income
