ASSIGNMENT - STRACOMA

This refers to the kind of accounting concerned with providing information to management for decision-making purposes about the operations of the business:

Responsibility accounting

Cost accounting

Management accounting

Financial accounting

Management accounting

Which of the following characteristics does not relate to management accounting?

Accounting reports may include non-monetary information

It is subject to restrictions imposed by GAAP

Reports are often based on estimates and are seldom useful for anything other than the purpose for which

they are prepared

It provides data for internal users within the business organization

It is subject to restrictions imposed by GAAP

Which of the following characteristics relate to financial accounting?

Reports are promptly prepared and submitted to preserve its usefulness

Data may be both historical and estimates

It must adhere to the generally accepted accounting principles

It provides information needed by management in making decisions

It must adhere to the generally accepted accounting principles

Which of the following is a responsibility of the controller?

Tax planning and accounting

Custodian of funds

In charge of credit and collection

Arranging short-term financing

Tax planning and accounting

Which of the following is referred to as the top accountant in an organization?

Treasurer

Controller

Associate

Partner

Controller

S1: Management accounting reports are strictly presented every year to internal users only.

S2: Financial accounting reports are required to be presented in accordance with relevant accounting standards.

S3: Both management accounting and financial accounting requires reports to be prepared periodically such as

monthly, quarterly, or annually.

S4: External users read information provided by both financial accounting and management accounting.

How many statements are true?

1

2

3

4

1

This pertains to costs that are expensed only when goods have already been sold, but are considered part of inventory when goods are not yet sold.

Product cost

Period cost

Opportunity cost

Sunk cost

Product cost

This refers to a cost where income or benefit was given up or sacrificed when one alternative is selected over another.

Differential cost

Relevant cost

Opportunity cost

Sunk cost

Opportunity cost

S1: Product costs are expensed outright.

S2: Period costs are expensed when the product is sold; otherwise, they remain part of the inventory.

S3: Sunk costs are irrelevant for decision-making.

S4: Relevant costs are considered in decision-making and must pertain to a future, differential cost.

S5: The salary of a factory supervisor is considered part of direct labor.

How many statement/s is/are true?

1

2

3

4

2

Total manufacturing cost is computed as:

Direct materials plus direct labor

Direct labor plus factory overhead

Prime cost plus conversion cost

Direct materials plus conversion cost

Direct materials plus conversion cost

Mixed costs can be segregated into its fixed and variable components using various cost segregation techniques.

These techniques include the following, except?

High-low method

Scatter-graph method

Least squares regression method

Most squares progression method

Most squares progression method

Which of the following is an advantage of the high-low method in segregating mixed costs?

Its results merely provide estimates, not exact numbers

It is easy and simple to use

It can still yield accurate results despite the highest or lowest output levels being abnormal deviations

It relies heavily on only two data points which can be limiting and may not provide a full picture of cost

behavior

It is easy and simple to use

Which of the following statements about management or financial accounting is false?

Management accounting should be flexible

Financial accounting must follow GAAP

Management accounting is not subject to regulatory reporting standards

Both management and financial accounting are subject to mandatory record-keeping requirements

Both management and financial accounting are subject to mandatory record-keeping requirements

Which of the following statements is false?

Management accounting is an integral part of the controller's function in an organization

The Standards of Ethical Conduct for Management Accountants include concepts related to competence,

confidentiality, integrity, and objectivity/credibility

Modern cost accounting plays a role in planning new products, evaluating operational processes, and controlling costs

The COO (Chief Operating Officer) is primarily responsible for management accounting and financial accounting

The COO (Chief Operating Officer) is primarily responsible for management accounting and financial accounting

15. In cost accounting, the term relevant range refers to the range over which:

Relevant costs are incurred -

Production should be confined

Total fixed costs fluctuate

Cost relationships are valid

Cost relationships are valid

Iana Company manufactures 50,000 units of a product and sells 40,000 units of the same. Total manufacturing

cost per unit is P50 (variable manufacturing cost, P10; fixed manufacturing cost, P40). Assuming no beginning

inventory, the effect on net income if absorption costing is used instead of variable costing is that:

Net income is P400,000 lower

Net income is P400,000 higher

Net income is the same

Net income is P200,000 higher

Net income is P400,000 higher

Under variable costing:

All product costs are variable

All period costs are variable

All product costs are fixed

Product costs are both fixed and variable

All product costs are variable

Calculating income under variable costing does not require knowing:

Units sales

Unit variable manufacturing costs

Selling price

Unit production

Unit production

The following statements about the adoption of variable costing are true, except?

All fixed manufacturing costs are recognized as period costs

It only considers variable manufacturing costs as product costs

It is an acceptable method for general reporting purposes

A portion of factory overhead may be assigned as part of product cost

It is an acceptable method for general reporting purposes

Chloe Company's 2024 fixed manufacturing overhead costs totaled P100,000, and variable selling costs totaled

P80,000. Under variable costing, how should those costs be classified?

P0 as period costs, P180,000 as product costs

P80,000 as period costs, P100,000 as product costs

P100,000 as period costs, P80,000 as product costs

P180,000 as period costs, P0 as product costs

P180,000 as period costs, P0 as product costs

If a company is earning a profit, then its fixed costs:

Are less than total contribution margin

Are equal to total contribution margin

Are greater than total variable costs

Can be greater than or less than total contribution margin

Are less than total contribution margin

In regression analysis, which of the following

correlation represents the strongest relationship

between the independent and dependent variable?

A. 1.03

B. -.02

C. .75

D. -.89

D. -.89

What cost segregation technique requires the use

of mere observation to split the variable and fixed

components of a mixed cost?

A. High-low method

B. Step-down method

C. Scatter-graph method

D. Least squares regression method

C. Scatter-graph method

Which of the following is normally not assumed to be constant when

expressed on a per-unit amount?

A. Fixed cost

B. Variable cost

C. Selling price

D. Contribution margin

A. Fixed cost

Peter Company paid the following during March and April:

March April

Rent expense for factory 800,000 800,000

Selling expense for product 120,000 160,000

Assess the following statements:

I. Rent expense is a fixed cost.

II. As of May, the selling expenses made during March and April are

sunk costs.

III. As of May, the selling expense to be made in June is a sunk cost.

A. Only I is true

B. Only I and II are true

C. All are true

D. Only I and III are true

B. Only I and II are true

Ayen is deciding whether to take a jeep costing P13 or walk on the way

home from school.

Ayen decided to ride a jeep.

Had Ayen decided to take a walk, she would have saved P13. What

cost is being described in this scenario?

A. Opportunity cost

B. Variable cost

C. Direct cost

D. Product cost

A. Opportunity cost

Which of the following is false?

A. At zero production level, fixed costs is zero

B. At zero production level, fixed costs is positive

C. At zero production level, variable costs is zero

D. At zero production level, total costs equal fixed costs

A. At zero production level, fixed costs is zero

Product costs consist of which of the following:

A. Conversion cost and unexpired expense

B. Prime costs and manufacturing overhead

C. Selling and administrative expenses

D. Prime costs plus conversion costs

B. Prime costs and manufacturing overhead

A staff position:

A. Is superior in authority to a line position

B. Relates directly to the carrying out the basic

objectives of the organization

C. Is not in any way associated with the primary

role of the chief management accountant

D. Is supporting in nature, providing service and

assistance to other parts of the organization

D. Is supporting in nature, providing service and

assistance to other parts of the organization

The person most likely to use only financial

accounting information is a:

A. Current shareholder

B. Department manager

C. Factory shift supervisor

D. Vice president for operations

A. Current shareholder

Management accounting is an integral part of the

_______ function in an organization:

A. Treasurer’s

B. Controller’s

C. President’s

D. Internal audit

B. Controller’s

The person directly responsible for attaining

organizational objectives is:

A. Controller

B. Chief Financial Officer

C. Line management

D. Staff management

C. Line management

Managers that are making economic decisions are

more concerned with receiving information that is:

A. Relevant, flexible, and immediately available

B. Relevant, completely accurate, and precise

C. Always financial in nature

D. Completely accurate and precise

A. Relevant, flexible, and immediately available

This primary purpose of management accounting

is to provide relevant information to:

A. Both internal and external users

B. Internal users

C. External users

D. Those charged with governance

B. Internal users

This field of accounting involves preparing reports

to internal users to aid in decision-making

A. Financial accounting

B. Cost accounting

C. Management accounting

D. Internal auditing

C. Management accounting

Using the variable costing method, which of the following costs are

assigned to inventory: (a) variable selling and administrative costs; (b)

variable factory overhead costs.

A. Yes; Yes

B. Yes; No

C. No; No

D. No; Yes

D. No; Yes

A principal difference between variable and absorption costing centers on:

A. Whether variable manufacturing costs should be included as product costs

B. Whether fixed manufacturing costs should be included as product costs

C. Whether fixed manufacturing costs and fixed selling and administrative costs should be included as product costs

D. None of these

B. Whether fixed manufacturing costs should be included as product costs

The costing method that treats all fixed costs as period costs is:

A. Absorption costing

B. Job-order costing

C. Variable costing

D. Process costing

C. Variable costing

Net income computed using variable costing would exceed net

income computed using absorption costing if:

A. Units sold exceed units produced

B. Units sold are less than units produced

C. Units sold equal units produced

D. The unit fixed cost is zero

A. Units sold exceed units produced

Absorption costing and variable costing are the same when it comes

to:

A. Income statement presentation

B. Selling expense treatment

C. Profit computation

D. Inventory costing

B. Selling expense treatment