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    EXERCISECHAPTER1

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    Bạch Thanh
    The document contains multiple choice and writing exercises on managerial accounting concepts: 1) The multiple choice questions test understanding of key managerial accounting terms like variable and fixed costs, opportunity costs, and the differences between managerial and financial accounting. 2) The writing exercises require explaining the irrelevance of sunk costs, preparing a production budget, analyzing a performance report, and determining which costs would increase and remain constant given unexpected increased production levels. 3) Managerial accounting focuses on providing internal information to managers for planning, control, and decision making, whereas financial accounting provides external information to investors, creditors, and regulators.

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    EXERCISECHAPTER1

    Uploaded by

    Bạch Thanh
    81 views5 pages
    The document contains multiple choice and writing exercises on managerial accounting concepts: 1) The multiple choice questions test understanding of key managerial accounting terms like variable and fixed costs, opportunity costs, and the differences between managerial and financial accounting. 2) The writing exercises require explaining the irrelevance of sunk costs, preparing a production budget, analyzing a performance report, and determining which costs would increase and remain constant given unexpected increased production levels. 3) Managerial accounting focuses on providing internal information to managers for planning, control, and decision making, whereas financial accounting provides external information to investors, creditors, and regulators.

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    managerial accounting

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    The document contains multiple choice and writing exercises on managerial accounting concepts: 1) The multiple choice questions test understanding of key managerial accounting terms like variable and fixed costs, opportunity costs, and the differences between managerial and financial accounting. 2) The writing exercises require explaining the irrelevance of sunk costs, preparing a production budget, analyzing a performance report, and determining which costs would increase and remain constant given unexpected increased production levels. 3) Managerial accounting focuses on providing internal information to managers for planning, control, and decision making, whereas financial accounting provides external information to investors, creditors, and regulators.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    81 views5 pages

    EXERCISECHAPTER1

    Uploaded by

    Bạch Thanh
    The document contains multiple choice and writing exercises on managerial accounting concepts: 1) The multiple choice questions test understanding of key managerial accounting terms like variable and fixed costs, opportunity costs, and the differences between managerial and financial accounting. 2) The writing exercises require explaining the irrelevance of sunk costs, preparing a production budget, analyzing a performance report, and determining which costs would increase and remain constant given unexpected increased production levels. 3) Managerial accounting focuses on providing internal information to managers for planning, control, and decision making, whereas financial accounting provides external information to investors, creditors, and regulators.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 5

    EXERCISE CHAPTER 1:

    I. Mutiple-choice test
    1. The primary goal of managerial accounting is to:
    a. Provide information to current and potential investors in the company.
    b. Provide information to creditors as well as current
    and prospective investors.
    c. Provide information to creditors, taxing authorities,
    and current and prospective investors.
    d. Provide information for planning, control, and decision making.

    2. Goals of managerial accounting are:


    a. Planning
    b. Control
    c. Decision making
    (1) This management activity involves changing operations, revising plans, or
    rewarding/punishing managers.
    (2) This management activity compares actual results with planned outcomes as a
    basis for corrective action.
    (3) This management activity formulates goals, communicates them to employees,
    and specifies the resources needed to achieve them.
    d. all of them

    3. Which of the following statements about budgets is false?


    a. Budgets may be expressed in dollars, quantities, or both.
    b. Budgets may reflect projected revenues, projected
    expenses, projected cash flows, or projected quantities of inputs or outputs.
    c. Budgets must be prepared in accordance with GAAP.
    d. Budgets are useful both for planning and control

    4. Which of the following statements is false?


    a. Managerial accounting statements do not necessarily comply with GAAP.

    1
    b. Financial accounting statements normally reflect
    more detail than would be found in managerial accounting reports.
    c. Managerial accounting reports emphasize future activities and future costs.
    d. Financial accounting data are directed primarily at external users rather than internal
    users.

    5. Which of the following is most likely to be a variable cost?


    là chi phí thay đổi theo quy mô sản xuất
    a. Depreciation.
    b. The cost of material used in production.
    c. Rent.
    d. Advertising.

    6. Which of the following is most likely to be a fixed cost?


    a. The cost of material used in production.
    b. Rent.
    lắp ráp
    c. Assembly labor cost.
    d. Commissions.hoa hồng

    phát sinh
    7. Costs incurred in the past are:
    a. Opportunity costs.
    b. Direct costs.
    c. Sunk costs.
    d. Variable costs.

    8. ______________ costs increase or decrease in proportion to increases or decreases in


    the level of business activity whereas _____________ costs are not.
    a. Variable/Fixed
    b. Direct/Indirect
    c. Fixed/Variable
    d. Indirect/Direct

    2
    9. The salary a student forgoes while in college is an example of:
    a. Opportunity cost.
    b. Direct cost.
    c. Sunk cost.
    d. Variable cost.

    10. Which of the following is not one of the seven questions in the framework for ethical
    decision making?
    a. Will an individual or an organization be harmed by any of the decision alternatives?
    b. Would someone I respect find any of the alternatives objectionable?
    c. At a gut level, am I comfortable with the decision I am about to make?
    d. Are any of the alternatives illegal?

    II. Writing test


    Exercise 1: What are the different points between the financial accounting and managerial
    accounting? Please provide specific proof?

    Exercise 2:
    Rachel Cook owns Campus Copies, a copy business with several high-speed copy
    machines. One is a color copier that was purchased just last year at a cost of $25,000.
    Recently a salesperson got Rachel to witness a demo of a new $23,000 color copier that
    promises higher speed and more accurate color representation. Rachel is interested but she
    can’t get herself to trade in a perfectly good copier for which she paid $25,000 and replace
    it with one that will cost $23,000.
    Require: Write a paragraph explaining why the cost of the old copier is irrelevant to
    Rachel’s decision.

    Exercise 3: Santiago’s Salsa is in the process of preparing a production cost budget


    for May. Actual costs in April were:

    3
    Required:
    a. Using this information, prepare a budget for May. Assume that production will increase
    to 30,000 jars of salsa, reflecting an anticipated sales increase related to a new marketing
    campaign.
    b. Does the budget suggest that additional workers are needed? Suppose the wage rate is
    $20 per hour. How many additional labor hours are needed in May? What would happen
    if management did not anticipate the need for additional labor in May?
    c. Calculate the actual cost per unit in April and the budgeted cost per unit in May. Explain
    why the cost per unit is expected to decrease.

    Exercise 4: A performance report that compares budgeted and actual profit in the
    sporting goods department of Maxwell’s Department Store for the month of
    December follows:

    4
    Required
    a. Evaluate the department in terms of its increases in sales and expenses. Do you believe
    it would be useful to investigate either or both of the increases in expenses?
    b. Consider storewide electricity cost. Would this cost be a controllable or a
    noncontrollable cost for the manager of sporting goods? Would it be useful to include a
    share of storewide electricity cost on the performance report for sporting goods?

    Exercise 5: At the end of 2017, Cyril Fedako, CFO for Central Products, received a report
    comparing budgeted and actual production costs for the company’s plant in Forest Lake,
    Minnesota:

    His first thought was that costs must be out of control since actual costs exceed the budget
    by $585,000. However, he quickly recalled that the budget was set assuming a production
    level of 60,000 units. The Forest Lake plant actually produced 65,000 units in 2017.

    Required
    Given that production was greater than planned, should Cyril expect that all actual costs
    budget
    will be greater than budgeted? Which costs would you expect to increase, and which costs
    would you expect to remain relatively constant?
    actual

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