ACCCOB3 Module 1/2 - Quiz 1 Theory Review (2)

True or False: Managerial accounting information is not important for not-for-profit organizations.

False - MA information IS STILL important for not-for-profit organizations.

True or False: Management accounting information is only used by manufacturing organizations.

False - MA information is used by ALL types of organizations.

True or False: The value chain is the set of activities required to design, develop, produce, market, and deliver products and service to customers.

True

True or False: The detailed formulation of action to achieve a particular end is the management activity called decision making.

False - the detailed formulation of action to achieve a particular end is called PLANNING.

True or False: Financial accounting is the provision of accounting information for a company’s internal users.

False - FA is the provision of accounting information for a company’s EXTERNAL users.

True or False: A cost object is any item such as products, customers, departments, regions, and so on, for which costs are measured and assigned.

True

True or False: Direct costs are those costs that cannot be easily and accurately traced to a cost object.

False - direct costs are those costs that CAN be easily and accurately traced to a cost object.

True or False: A variable cost is one that does not increase in total as output increase and does not decrease in total as output decreases.

False - a variable cost is one that DOES INCREASE/DECREASE IN TOTAL as output increases/decreases.

True or False: All product costs other than direct materials and indirect labor are called overhead.

False - all product costs other than DIRECT MATERIALS and DIRECT LABOR are called overhead.

True or False: Cost of goods manufactured represents the cost of direct materials, direct labor, and overhead incurred during the current accounting period.

False - TOTAL MANUFACTURING COSTS represents the cost of direct materials, direct labor, and overhead incurred during the current accounting period.

*Total manufacturing costs (TMC) = DM + DL + MOH

*Cost of goods manufactured = TMC + WIP (beg) - WIP (end)

Which of the following is NOT an objective of managerial accounting?

A. To prepare external reports for investors, creditors, government agencies, and other outside users.

B. To provide information for the costing of services, products, and other objects of interest to management.

C. To provide information for planning, controlling, evaluating, and continuous improvement.

D. To provide information for decision-making.

A. To prepare external reports for investors, creditors, government agencies, and other outside users.

Which of the following is an example of the management activity referred to as planning?

A. Developing a strategy for disposing of hazardous waste.

B. The decision to eliminate an unprofitable segment of an organization.

C. The decision to outsource an organization's payroll processing.

D. All of these are correct

A. Developing a strategy for disposing of hazardous waste.

The primary objective of managerial accounting is

A. To provide stockholders and potential investors with useful information for decision-making.

B. To provide banks and other creditors with information useful in making credit decisions.

C. To provide management with information useful for planning and control of operations.

D. To provide the Internal Revenue Service with information about taxable income.

C. To provide management with information useful for planning and control of operations.

Assigning costs

A. Involves the way that a cost is linked to some cost object.

B. Occurs in both manufacturing and service businesses

C. To a cost object using a reasonable and convenient method is allocation

D. All of these.

D. All of these.

Materials in the raw materials account do not become direct materials

A. Until they are withdrawn from inventory for use in production.

B. Until the finished product is sold.

C. Until they are purchased from a vendor.

D. None of these are correct.

A. Until they are withdrawn from inventory for use in production.

The unit cost

A. Is the total product costs divided by the number of units produced.

B. Includes period costs.

C. Is the total prime costs divided by the number of units produced.

D. Is the total conversion costs divided by the number of units produced.

A. Is the total product costs divided by the number of units produced.

Cost of goods manufactured equals

A. The cost of indirect materials used in production.

B. The product cost of goods completed during the current period and transferred to finished goods.

C. The period costs for the current period.

D. The cost of direct materials and direct labor used during the current period.

A. The cost of indirect materials used in production.

Which of the following would be found on the balance sheet of a manufacturer

A. Work in process

B. Raw material

C. Finished goods

D. All of these are correct

D. All of these are correct

Product Cost or Period Cost: Depreciation on automobiles used by the sales staff.

Period Cost

Product Cost or Period Cost: Salary of a manufacturer’s chief executive officer.

Period Cost

Product Cost or Period Cost: Glue used in the production process.

Product Cost

Product Cost or Period Cost: Supplies for factory washroom.

Product Cost

Product Cost or Period Cost: Research and development costs.

Period Cost

Product Cost or Period Cost: Property taxes on factory building.

Product Cost

Product Cost or Period Cost: Salary of company controller.

Period Cost