ACCT225 EX1

The focus of management accounting is on?

Internal reporting

ERP stands​ for:

Enterprise Resource Planning

Which of the following are the internal decision makers of a​ company?

Managers

Overseeing the day-to-day operations of a company is an example of which of the following management​ functions?

Directing

An external party receives information about past performance from

financial statements

The primary goal of managerial accounting is to provide information to

internal-decision makers

Under​ SOX, a CPA firm is permitted to perform which of the following services for an audit client with pre-approval from the​ client's audit​ committee?

Tax

Creating budgets are part of which primary management​ responsibility?

Planning

Which of the following is being fulfilled when management compares the budget to actual​ results?

Controlling

CPA firms are permitted to provide which of the following services to audit​ clients?

Tax preparation

How often should managerial accounting reports be​ prepared?

As needed

Budgets are a way for managers to communicate​ their:

Plans

Which of the following statements is true regarding managerial accounting​ information?

A. Managerial accounting information emphasizes relevance.

B. Managerial accounting information must be prepared in conformity with Generally Accepted Accounting Principles​ (GAAP).

C. Managerial accounting information is prepared annually and quarterly.

D. Managerial accounting information is audited by CPAs.

Managerial accounting information emphasizes relevance

Which of the following is not one of the primary responsibilities of​ management?

A. Directing

B. Adhering to GAAP

C. Controlling

D. Planning

Adhering to GAAP

When management analyzes whether to move production to another country or to keep the production located where it currently​ is, which of the following management responsibilities is being​ performed?

Planning

When management uses feedback to take corrective action on the​ budgets, which of the following management responsibilities are being​ fulfilled?

Controlling

All of the following are advantages of an ERP​ except:

A. Replaces different software allowing for more uniformity across functions and regions.

B. Helps the company respond to changes quickly.

C. Streamlines operations which saves money for the company.

D. Automates reporting which makes the role of the managerial accountant​ obsolete, in turn saving money.

Automates reporting which makes the role of managerial accountant obsolete, in turn saving money

Which of the following persons or groups would be least likely to receive detailed managerial accounting​ reports?

A. Current shareholders

B. Plant managers

C. Sales territory managers

D. CEO

Current shareholders

The management accountant at Global​ Enterprises, Inc. determined​ $500,000 is the​ organization's earning goal to accommodate the organizational plan during the first quarter during a new year. The accountant realizes that to achieve the new earning​ goal, the operations manager needs to increase the price of parts charged to a consumer to​ $250.00 per unit. The manager is scheduling a new staff meeting to determine if they need to increase the marketing efforts at the​ firm, or if they need to design a new part that uses materials that are less expensive to produce.

Which of the following management responsibilities is the managerial accountant using in this​ example?

Planning

The value chain is used by:

service, manufacturing, and merchandising businesses.

Before these materials are used to manufacture its​ cars, Honda classifies​ steel, glass, and plastic as

Raw materials inventory

How do total variable costs​ behave?

They decrease as production decreases.

A​ salesperson's salary would be classified as​ ________ when determining the cost of a manufactured product.

A period cost

All of the following would be considered a direct material for a kitchen cabinet except

A. wood.

B. sandpaper.

C. stain.

D. hinges

sandpaper

The income statement of a retailer would include which of the​ following?

A. Cost of goods sold

B. Value of inventory

C. Accounts payable

D. Accounts receivable

Cost of goods sold

An example of a controllable cost is
A. property taxes. 

B. advertising.

C. depreciation on headquarters building.

D. property insurance.

Advertising

Before operating income can be determined for a​ manufacturer, which of the following is​ calculated?

A. Cost of goods available for sale

B. Cost of goods manufactured

C. Cost of goods sold

D. All of the above

All of the above

Which of the following is not an example of an indirect cost incurred in manufacturing​ automobiles?

A. Cost of the automobile engines

B. Plant supervisor salary

C. Plant utilities

D. Machinery depreciation in the factory

Cost of automobile engines

Which type of company typically produces its own​ inventory?

Manufacturer

If the Ford Focus is the cost​ object, classify each of the following costs as indirect or​ direct, respectively: property taxes for the manufacturing​ plant, engines for the​ cars, and janitor wages for the factory.

Indirect, direct, indirect

Manufacturing overhead costs for a product include

Indirect manufacturing costs

Hollister classifies the denim jeans on the shelves at its retail locations as

Merchandise inventory

Which element of the value chain would a technical support hotline for customers be​ considered?

Customer Service

Which of the following types of cost include all of the costs associated with production of a​ product?

Product costs

Nordstrom​ (the department store​ chain) classifies its clothing held for sale as

Merchandise inventory

All companies have the same types of inventories.

True or False?

False

Maxwell​ & Associates, a public accounting firm that provides business consulting to a​ consumer, is what type of​ company?

Service company

An example of a fixed cost for a manufacturer would be which of the​ following?

A. Salary of plant manager

B. Sales commissions

C. Delivery costs

D. Direct materials

Salary of a plant manager

Management can use job cost information for each of the following except

A. all of the listed choices are possible uses of job cost information.

B. determining cost of goods sold.

C. bidding on custom jobs.

D. determining the profitability of different jobs.

all of the listed choices are possible used of job cost information

When is the predetermined manufacturing overhead rate​ computed?

before the time period starts

Which product costing system would capture the manufacturing costs more accurately for a unique​ product?

job costing system

A​ ________ is used to accumulate all of the direct materials and direct labor used on the​ job, as well as the manufacturing overhead allocated to the job.

job cost record

Which of the following is an example of an industry that would use a process

costing — rather than a job costing — system?

A. Coca-Cola

B. SpaceX

C. Centex Custom Homes

D. Snyder​ & Lewis, Attorneys at Law

Coca-Cola

A​ ________ is used to accumulate the costs of a job.

job cost record

Which of these documents notifies the storeroom to send specific materials to the factory​ floor?
A. Materials requisition

B. Purchase order

C. Bill of materials

D. Receiving report

Materials requisition

The two basic types of costing systems are

job costing and process costing systems

Which of the following industries would be most likely to use a job costing​ system?

A. Commercial building construction

B. Food and beverage

C. Pharmaceuticals

D. Chemicals

commercial building construction

​A(n) ________ is an estimated manufacturing overhead rate computed at the beginning of the year.

predetermined manufacturing overhead rate

A​ ___________ is the primary factor that causes a cost to be incurred.  

cost driver

Which of the following is not a way in which management can use job cost​ information?

A. Determining the balance in raw materials inventory

B. Assessing and comparing the profitability of each product type

C. Using the cost information in determining the bid price for custom orders

D. Preparing the financial statements

determining the balance in raw materials inventory

Manufacturing overhead can be allocated on the basis of

A. direct labor costs.

B. direct labor hours.

C. machine hours.

D. all of the above.

all of the above

A bill of materials indicates

what materials are needed to complete the job

A​ ________ is a source document used to track employee hours.

labor time record

Which of these documents authorizes the purchase of specific raw materials from a specific​ supplier?

A. Purchase order

B. Job cost record

C. Labor time record

D. Materials inventory requisition form

Purchase order

A job costing system can be used by which types of​ companies?

service, merchandising, and manufacturing businesses

Which of the following systems focuses on activities as the fundamental cost objects and uses the costs of those activities as building blocks for compiling the indirect costs of products and other cost​ objects?

Activity Based Costing System (ABC)

All of the following describe an ABC system except

A. ABC systems may only be used by service companies.

B. ABC systems are used in both manufacturing and nonmanufacturing companies.

C. ABC systems can create more accurate product costs.

D. ABC systems are more complex and costly than traditional costing systems.

ABC systems may only be used by service companies

Indications that a product cost system needs revision include
A. the company uses a single-allocation-base system developed long ago.

B. employees do not believe the cost numbers are accurate.

C. managers lose bids they expected to win and win bids they expected to lose.

D. all of the above.

all of the above

What will the use of departmental overhead rates generally result​ in?

The use of a separate cost allocation base for each department in the factory.

Regarding activity-based costing​ systems, which of the following statements is​ true?

A. ABC costing systems are less complex​ and, therefore, less costly than traditional systems.

B. ABC costing systems can be used in manufacturing firms only.

C. ABC systems accumulate overhead costs by departments.

D. ABC costing systems have separate indirect cost allocation rates for each activity.

ABC costing systems have separate indirect cost allocation rates for each activity

Most companies adopt ABC in order to

A. cut costs.

B. get a more accurate price of products.

C. help make product mix decisions.

D. all of the above are correct.  

all of the above are correct

The benefits of using the ABC costing system are higher if the company

A. has high indirect costs.

B. produces only one product.

C. has high indirect costs and produces many different products that use differing amounts of resources.

D. produces many different products that use differing amounts of resources.

has high indirect costs and produces many different products that use differing amounts of resources

Which of the following is not likely to be a cost driver of activities associated with determining product​ cost?

A. Number of material requisitions

B. Number of production orders

C. Number of cost​ accountant's labor hours

D. Number of product inspections

Number of cost accountant’s labor hours

ABC can be used by which of the following​ companies?

A. Merchandisers

B. Service Providers

C. Manufacturers

D. All of these companies can use ABC.  

All of these companies can use ABC

Which of the following is most likely to be the cost driver for the packaging and shipping​ activity?

A. Number of units produced

B. Number of setups

C. Number of orders shipped

D. Hours of testing

Number of orders shipped

Which of the following is a result of cost​ distortion?

A. Over-costing of all products

B. Under-costing of all products

C. Accurate costing of all products

D. Over-costing of some products and under costing of other products

Over-costing of some products and under-costing of other products

The first step in developing an ABC system is

A. calculate an activity cost allocation rate for each activity.

B. select an allocation base for each activity.

C. identify the primary activities and estimate a total cost pool for each.

D. allocate the costs to the cost object using the activity cost allocation rates.

identify the primary activities and estimate a total cost pool for each