Managerial Accounting Final Study Cards – Flashcards

Which of the following items are part of financial reporting but are not included as part of general-purpose financial statements? -Stock price information and analysis -Statement of cash flows -Management discussion and analysis of financial performance -Income statement -Company news releases -Balance sheet -Financial statement notes -Statement of shareholders' equity -Prospectus

What are four possible standards of comparison used to analyze financial statement ratios? -Intracompany -Competitor -Industry -Guidelines (Rules of Thumb) -Horizontal analysis -Vertical analysis

Which of these is generally considered to be the most useful? -Intracompany. -Competitor -Industry -Guidelines (Rules of Thumb) -Horizontal analysis -Vertical analysis

Which one is least likely to provide a good basis for comparison?

Identify whether each description most likely applies to managerial or financial accounting: 1. Its primary focus is on the organization as a whole. 2. Its principles and practices are very flexible. 3. It is directed at external users in making investment, credit, and other decisions. 4. Its primary users are company managers. 5. Its information is often available only after an audit is complete.

Managerial accounting: A. Is directed at reporting aggregate data on the company as a whole. B. Must follow generally accepted accounting principles. C. Provides information that is widely available to all interested parties. D. Provides information to aid management in planning and controlling business activities.

Which of these statements is true regarding fixed and variable costs? A. Both fixed and variable costs increase as activity volume increases. B. Fixed costs increase and variable costs decrease in total as activity volume decreases. C. Both fixed and variable costs stay the same in total as activity volume increases. D. Fixed costs stay the same and variable costs increase in total as activity volume increases (within relevant range).

Kasey Anthony Company produces sporting equipment, including basketballs. Identify each of the following costs as direct or indirect if the cost object is a basketball produced by Kasey Anthony. 1. Materials used to produce basketballs. 2. Electricity used in the production plant. 3. Labor used on the basketball production line. 4. Salary of manager who supervises the entire plant. 5. Depreciation on equipment used to produce basketballs.

Which of these statements is true regarding product and period costs? A. Factory wages are a product cost and direct material is a period cost. B. Factory maintenance is a product cost and sales commission is a period cost. C. Sales commission is a product cost and factory rent is a period cost. D. Sales commission is a product cost and depreciation on factory equipment is a product cost.

Three inventory categories are reported on a manufacturing company's balance sheet: (i) raw materials, (ii) goods in process, and (iii) finished goods. Identify the usual order in which these inventory items are reported on the balance sheet.. A. (iii)(ii)(i) B. (ii)(i)(iii) C. (i)(ii)(iii) D. (ii)(iii)(i)

Identify the usual sequence of manufacturing activities by filling in the blank (with i, ii or iii) corresponding to its order: A. Production activities B. Sales activities C. Materials activities

Every manager and employee constantly looks for ways to improve company operations.

Flexible product designs can be modified to accommodate customer choices.

Focuses on quality throughout the production process.

Inventory is acquired or produced only as needed.

Indicate which products are most likely to be manufactured as a job and which as a job lot. 1. A hand-crafted table. 2. A 90-foot motor yacht. 3. Wedding dresses for a chain of stores. 4. A custom-designed home. 5. Hats imprinted with company logo. 6. Little League trophies.

What three types of costs are typically recorded on a job cost sheet?

For each of the following products and services, indicate whether it is most likely produced in a process operation or in a job order operation. 1. Luxury cars 2. Vanilla ice cream 3. Apple juice 4. Tennis courts

What are the four steps in accounting for production activities in order from first to last?

What are the headings of the three major sections of a process cost summary?

True or false. Job order and process operations both combine materials, labor, and overhead in producing products or services.

True or false. Costs per job are computed in both job order and process costing systems.

True or false. Service companies are not able to use process costing.

True or false. The cost per equivalent unit is computed as the total costs of a process divided by the number of equivalent units passing through that process.

Identify whether each of the following is best described as a fixed, variable, or mixed cost with respect to product units. 1. Maintenance of factory machinery. 2. Depreciation expense of warehouse. 3. Taxes on factory building. 4. Factory supervisor's salary. 5. Wages of an assembly-line worker paid on the basis of acceptable units produced. 6. Packaging expense. 7. Rubber used to manufacture athletic shoes.

Which one of the following is an assumption that underlies cost-volume-profit analysis? A. For costs classified as fixed, the costs per unit of output must remain constant. B. All costs have approximately the same relevant range. C. For costs classified as variable, the costs per unit of output must change constantly. D. The selling price per unit must change in proportion to the number of units sold.

Which one of the following sets of items are all necessary components of the master budget? A. Operating budgets, financial budgets, and capital expenditures budget. B. Operating budgets, historical income statement, and budgeted balance sheet. C. Sales budget, operating budgets, and historical financial budgets. D. Prior sales reports, capital expenditures budget, and financial budgets.

Ting Company is considering two alternative investments. The payback period is 3.5 years for investment A and 5 years for investment B. If management relies on the payback period, which investment is preferred? Investment B Investment A

Operating Department

Profit Center

Responsibility accounting system

Cost center

Investment center

Departmental accounting system

Service department

For each of the following types of indirect expenses and service department expenses, identify one allocation basis that could be used to distribute it to the departments indicated. A. Proportion of floor space occupied by each department; relative number of lights; or proportion of total wattage in each department. B. Relative number of employees; or proportion of total sales. C. Proportion of total time in each department for maintenance; or proportion of the number of machines. D. Proportion of total processing time for each factory department; or number of production run schedules prepared for each department as a percent of the total. 1. Electric utility expenses of all departments. 2. General office department expenses of the operating departments. 3. Maintenance department expenses of the operating departments. 4. Computer service expenses of production scheduling for operating departments.

Classify each of the performance measures below into the most likely balanced scorecard perspective it relates to. Select your answers using C (customer), P (internal process), I (innovation and growth), or F (financial). 1. Number of new products introduced 2. Length of time raw materials are in inventory 3. Profit margin 4. Customer wait time 5. Change in market share 6. Employee training sessions attended 7. Number of days of employee absences 8. Customer satisfaction index

Lopez Company has been approached by a new customer to provide 2,000 units of its regular product at a special price of $6 per unit. The regular selling price of the product is $8 per unit. Lopez is operating at 75% of its capacity of 10,000 units. Identify whether the following costs are relevant to Lopez's decision as to whether to accept the order at the special selling price. No additional fixed manufacturing overhead will be incurred because of this order. The only additional selling expense on this order will be a $0.50 per unit shipping cost. There will be no additional administrative expenses because of this order. Identify whether the cost is relevant or irrelevant to accepting this order. a. Selling price of $6.00 per unit b. Direct materials cost of $1.00 per unit c. Direct labor of $2.00 per unit d. Variable manufacturing overhead of $1.50 per unit e. Fixed manufacturing overhead of $0.75 per unit f. Regular selling expenses of $1.25 per unit g. Additional selling expenses of $0.50 per unit h. Administrative expenses of $0.60 per unit

True or false. An opportunity cost is the potential benefit that is lost by taking a specific action when two or more alternative choices are available.

True or false. A sunk cost will change with a future course of action.

True or false. An out-of-pocket cost requires a current and/or future outlay of cash.

True or false. Relevant costs are also known as unavoidable costs.

True or false. Incremental costs are also known as differential costs.