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    Correct Answers Are Marked in Yellow

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    Nitin
    Managerial accounting is used primarily by internal users, is optional, and is a form used to accumulate the cost of producing an item is called a job-cost sheet. Equivalent units are computed separately for raw materials and conversion costs because they enter the production process at different rates. The margin of safety is the difference between the expected level of sales and the break-even point. Avoidable costs are fixed costs that will be eliminated if a particular course of action is undertaken.

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    Correct Answers Are Marked in Yellow

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    Nitin
    23 views6 pages
    Managerial accounting is used primarily by internal users, is optional, and is a form used to accumulate the cost of producing an item is called a job-cost sheet. Equivalent units are computed separately for raw materials and conversion costs because they enter the production process at different rates. The margin of safety is the difference between the expected level of sales and the break-even point. Avoidable costs are fixed costs that will be eliminated if a particular course of action is undertaken.

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    Managerial accounting is used primarily by internal users, is optional, and is a form used to accumulate the cost of producing an item is called a job-cost sheet. Equivalent units are computed separately for raw materials and conversion costs because they enter the production process at different rates. The margin of safety is the difference between the expected level of sales and the break-even point. Avoidable costs are fixed costs that will be eliminated if a particular course of action is undertaken.

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    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    23 views6 pages

    Correct Answers Are Marked in Yellow

    Uploaded by

    Nitin
    Managerial accounting is used primarily by internal users, is optional, and is a form used to accumulate the cost of producing an item is called a job-cost sheet. Equivalent units are computed separately for raw materials and conversion costs because they enter the production process at different rates. The margin of safety is the difference between the expected level of sales and the break-even point. Avoidable costs are fixed costs that will be eliminated if a particular course of action is undertaken.

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    of 6

    Correct answers are marked in yellow

    1. Managerial accounting a. is used primarily by external users ,b.must follow GAAP ,c. is required by
    taxing authorities such as the IRS ,d. is optional

    2.Which of the following is a period expense? a.rent on factory building ,b.raw materials ,c.depreciation
    on production equipment ,d.commissions paid to sales personnel

    3.A form used to accumulate the cost of producing an item is called a(n) a.job-cost sheet, b.material
    requisition ,c.balance sheet ,d.invoice

    4.Why do we compute equivalent units differently for raw materials and conversion costs? a. raw
    materials are more difficult to count, b. conversion costs are more difficult to count , c.they are
    introduced into the process at different times , d. none of the above

    5.Why is it necessary to compute equivalent units for separtely for materials and conversion costs? a.
    mistakes are made in the accounting for these costs, b. materials and conversion enter the production
    process at different rates, c. conversion costs are more difficult to estimate d.none of the above reasons
    are true.

    6. the margin of safety is the difference between (Points: 5)

    a.total revenue and total fixed costs

    b.expected level of sales and the break-even point

    c.budgeted fixed costs and actual fixed costs

    d.selling price and variable cost per unit

    7.The contribution margin per unit is the difference between (Points: 5)


    a.total revenue and total fixed costs

    b.selling price and variable costs per unit

    c.anticipated level of sales and break-even sales

    d.budgeted fixed costs and actual fixed costs

    8.Which of the following items on a variable costing income statement will change in direct proportion to
    a change in units sold? (Points: 5)

    a.sales, contribution margin, income

    b.sales, variable costs, contribution margin

    c.sales, variable costs, fixed costs

    d.sales, fixed costs, net income

    9.If the number of units sold is less than the number of units produced (Points: 5)

    a.full costing and variable costing will yield the same net income

    b.full costing will assign some fixed manufacturing overhead to the units in the ending inventory

    c.net income will be higher under variable costing than under full costing

    d.inventory levels will decrease

    10.A major problem with cost-plus contracts is that they (Points: 5)

    a.are not acceptable under GAAP

    b.cause suppliers to significant financial risks

    c.require suppliers to use variable costing

    d.create an incentive to allocate as much cost as possible to the goods produced under the cost-plus
    contract

    11.Which of the following steps is not involved in the ABC approach? (Points: 5)
    a.identify activities which cause costs to be incurred.

    b.allocate costs to products based on activity usage

    c.group costs of activities into cost pools

    d.Improve processes based on benchmarking

    12.Which of the following is never considered in incremental analysis? (Points: 5)

    a.incremental revenues

    b.sunk costs

    c.incremental profit

    d.differential costs

    13Fixed costs that will be eliminated if a particular course of action is undertaken are called (Points: 5)

    optional costs

    opportunity costs

    direct costs

    avoidable costs

    14.Target costing (Points: 5)

    a.starts with the features a customer wants and what they will pay for them

    b.is used after the product is designed

    c.focuses on including all features in a product that a customer may want

    d.all of the above

    15.Customer profitability analysis would trace which of the following to each customer? (Points: 5)

    sales revenue
    cost of goods sold

    cost of filling the customer order

    all of the above

    16.Present value techniques (Points: 5)

    ignore cash flows that will occur more than ten years in the future

    are a way of converting future dollars into equivalent current dollars

    provide more conservative results than similar time value of money computations

    treat dollars received today the same as dollars received in the future.

    17.Which of the following techniques uses time value of money? (Points: 5)

    payback period

    internal rate of return

    accounting rate of return

    relative sales value method

    18. TCO10. The ratio that measures the return earned independently of how the firm is financed is the
    (Points: 5)

    return on stockholders' equity

    price earnings ratio

    earnings per share

    return on assets

    19. TCO10. Asset turnover is a measure of (Points: 5)


    a.how quickly a company is moving its inventory

    b.how quickly a company is turning it accounts receivable into cash

    c.the overall efficiency with which the company uses its assets to generate revenues

    d.how rapidly the market believes the company will grow

    20. TCO10. Which ratio measures the rate earned on total capital provided by the owners? (Points: 5)

    return on assets

    return on stockholders' equity

    earnings per share

    price earnings ratio

    21. TCO10. In general, an unfavorable material variance arises from (Points: 5)

    using more material than planned

    paying a higher price for material than planned

    both A and B

    none of the above

    22. TCO10. Why is ROI better than income as a measurement of performance for an investment center?
    (Points: 5)

    ROI follows GAAP

    ROI is simpler to compute than income

    ROI considers the amount invested as well as the net income

    ROI is forward looking


    23. TCO10. Which of the following is a responsibility that distinguishes an investment center manager
    from a profit center manager? (Points: 5)

    setting prices for products

    controlling costs

    generating revenues

    significant influence over investment decisions

    24. TCO10. A subunit that has responsibility for controlling cost but not revenues is a(n)? (Points: 5)

    profit center

    cost center

    investment center

    business center

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