MULTIPLE CHOICE QUESTIONS MULTIPLE CHOICE QUESTIONS
1.
1. Which of the follWhich of the following staowing statementtements about manags about managerial accounerial accountants is falsetants is false?? A.
A. ManageManagerial accorial accountantuntants more and ms more and more are conore are considersidered "busied "business parness partnerstners."." B.
B. ManageManagerial accrial accountountants ofants often are pten are part of crart of cross-foss-functiunctional teonal teams.ams. C.
C. An increaAn increasing numsing number of organber of organizatiizations are segrons are segregatinegating manageg managerial accourial accountants intants in separatn separatee managerial-accounting departments.
managerial-accounting departments. .
. !n a number of com!n a number of companiespanies manag managerial accouerial accountanntants ma#e sigts ma#e significanificant businnt business deciess decisionssions and resol$e operating problems.
and resol$e operating problems. %.
%. &he role of m&he role of managerianagerial accounal accountanttants has chans has changed consged considerabiderabl' o$er thl' o$er the past decae past decade.de. Answer(
Answer( C C )*( )*( 1 1 &'pe( &'pe( +C+C ,.
,. &he da'-to-da' &he da'-to-da' wor# of wor# of management teams management teams will t'piwill t'picall' comprise call' comprise all of all of the following the following acti$itiesacti$ities ecept(
ecept( A.
A. dedecicisision mon ma#a#ining.g. B
B.. ppllaannnniinngg.. C.
C. cocost mst mininimimizizining.g. .
. dirdirectecting oing operperatiationaonal actl acti$ii$itieties.s. % .
% . c oc onnt rt ro lo ll il inng .g . Answer(
Answer( C C )*( )*( , , &'pe( &'pe( +C+C .
. Which of Which of the following the following functions is functions is best described best described as choosing as choosing among a$ailable among a$ailable alternati$es?alternati$es? A.
A. eecicisision mon ma#a#ining.g. B
B.. //lla na nnniinngg.. C.
C. irirectecting oing operperatiationaonal actl acti$ii$itieties.s. .
. CoContntrorollllining.g. %
%.. BBuuddggeettiinngg.. Answer(
Answer( A A )*( )*( , , &'pe( &'pe( +C+C 0.
0. Which of Which of the following the following managerial functions managerial functions in$ol$es a in$ol$es a detailed financial detailed financial and operationaland operational description of anticipated operations?
description of anticipated operations? A.
A. eecicisision mon ma#a#ining.g. B
B.. //lla na nnniinngg.. C.
C. irirectecting oing operperatiationaonal actl acti$ii$itieties.s. .
. CoContntrorollllining.g. %
%.. MMeeaassuur ir inngg.. Answer(
Answer( B B )*( )*( , , &'pe( &'pe( +C+C
.Which of the following in$ol$es the coordination of dail' business functions within an organization? .Which of the following in$ol$es the coordination of dail' business functions within an organization?
A.
A. eecicisision mon ma#a#ining.g. B
B.. //lla na nnniinngg.. C.
C. irirectecting oing operperatiationaonal actl acti$ii$itieties.s. .
. CoContntrorollllining.g. % .
% . M oM ot it i$$a ta ti ni ngg.. Answer(
Answer( C C )*( )*( , , &'pe( &'pe( +C+C
2.&itan Compan' has set $arious goals and management is now ta#ing appropriate action to ensure 2.&itan Compan' has set $arious goals and management is now ta#ing appropriate action to ensure that thethat the
firm achie$es these goals.
firm achie$es these goals. *ne such action is to reduce outla's for o$erhead which ha$e*ne such action is to reduce outla's for o$erhead which ha$e eceeded budgeted amounts.
eceeded budgeted amounts. Which of the following functions best describes this process?Which of the following functions best describes this process? A.
A. eecicisision mon ma#a#ining.g. B
B.. //lla na nnniinngg.. C.
C. CoCoorordidinanatitingng.. .
. CoContntrorollllining.g.
% .
% . * r* rg ag an in iz iz in gn g.. Answer(
Answer( )*( )*( , , &'pe( &'pe( 33 4.
4. Which of the folWhich of the followinlowing is not an ob5ectg is not an ob5ecti$e of managi$e of managerial accoerial accountinunting?g? A.
A. /ro$i/ro$iding iding informnformation ation for defor decisiocision ma#in ma#ing and ng and planniplanning.ng. B.
B. AssisAssisting ting in din directirecting ing and and controcontrollinlling opg operatierations.ons. C.
C. MaMaimimiziizing prong profitfits and mins and minimiimizinzing costg costs.s. .
. MeasuMeasuring ring the pthe performerformance oance of manf managers agers and sand subuniubunits.ts. %.
%. MotiMoti$atin$ating mang managers agers towartoward thd the ore organizaganization6tion6s gos goals.als. Answer(
Answer( C C )*( )*( &'pe( &'pe( +C+C 7.
7. &he role of manage&he role of managerial accounrial accounting infoting informatirmation in assiston in assisting manageing management is a8n9(ment is a8n9( A.
A. finfinancancialial-di-directrecting ing rolrole.e. B.
B. attattententionion-di-directrecting ing rolrole.e. C.
C. plaplanninning ng and and concontrotrollilling ng rolrole.e. .
. ororgaganinizatzatioionanal rl rolole.e. %.
%. prproboblelem-m-sosol$l$ining rg rolole.e. Answer(
Answer( B B )*( )*( &'pe( &'pe( +C+C :.
:. %mplo'ee empowe%mplo'ee empowerment in$ol$rment in$ol$es encouraging es encouraging and authorizinand authorizing wor#ers g wor#ers to ta#e to ta#e initiati$es tinitiati$es to(o( A.
A. imimprpro$o$e oe opeperatratioionsns.. B .
B . r er ed ud uc e c e c oc osst st s.. C.
C. imimprpro$o$e prode producuct ;uat ;ualilit't'.. .
. imimprpro$o$e custe customomer seer ser$ir$icece.. %.
%. alall l of of ththe e ababo$o$e.e. Answer(
Answer( % % )*( )*( &'pe( &'pe( +C+C 1<.
1<. &he process o&he process of encouraging f encouraging and authorizing and authorizing wor#ers to wor#ers to ta#e appropriate ta#e appropriate initiati$es tinitiati$es to impro$eo impro$e the o$erall firm is commonl' #nown as(
the o$erall firm is commonl' #nown as( A.
A. plplanannining ng anand cd conontrtrolol.. B.
B. ememplplo'o'ee eee empmpowowermermenent.t. C.
C. pepersrsononnenel l aggaggresressisi$en$enesess.s. .
. dedecicisision mon ma#a#ining.g. %.
%. proprobleblem rm recogecognitnition ion and and solsolutiution.on. Answer(
Answer( B B )*( )*( &'pe( &'pe( +C+C 11.
11. Which of tWhich of the following he following business models business models considers financial considers financial customer customer internal operating internal operating andand other measures in the e$aluation of perf
other measures in the e$aluation of perf ormance?ormance? A.
A. etetermerminiinististic c simsimulaulatiotion.n. B.
B. BaBalalancnced ed scscororecaecardrd.. C.
C. /a/a'o'off ff mamatrtrii.. .
. eecicisision on trtreeee.. %.
%. ChaChart of ort of operperatiating peng perforformarmance 8nce 8C*C*/9./9. Answer(
Answer( B B )*( )*( &'pe( &'pe( +C+C 1,.
1,. Which of the folloWhich of the following perswing perspectipecti$es is normal$es is normall' absent in a balancl' absent in a balanced scorecarded scorecard?? A .
A . = i= in an annc ic ia la l.. B
B.. CCuussttoommeerr.. C.
C. !n!nteternarnal l opopereratatioionsns.. .
. )ea)earnirning ang and ind innonno$at$ationion>gr>growtowth.h. %.
%. 3o3one ne of of ththe ae abobo$e$e.. Answer(
1.
1. ManManageragerial aial accoccountuntinging(( A.
A. focfocuseuses ons onl' ol' on hin histostoricrical dal data.ata. B.
B. is is gogo$e$ernrned ed b' b' AAA/A/.. C.
C. focusefocuses prims primaril' oaril' on the nn the needs of peeds of personnersonnel witel within thhin the organe organizatiization.on. .
. pro$idpro$ides infoes informatirmation for pon for parties arties eterneternal to thal to the organe organizatiization.on. %.
%. focusefocuses on fs on financiinancial staal statementtements and os and other fther financinancial reial reports.ports. Answer(
Answer( C C )*( )*( 0 0 &'pe( &'pe( +C+C 10.
10. ManManageragerial aial accoccountuntinging(( A.
A. is is ununreregugulalateted.d. B.
B. produproduces inforces informatimation that is uon that is useful onseful onl' for manl' for manufactuufacturing orring organizaganizationstions.. C.
C. is bais based esed eclclusiusi$el$el' on hi' on histostoricrical datal data.a. .
. is reguis regulated blated b' the @' the @ecuritecurities and ies and %chan%change Comge Commissimission 8@%Con 8@%C9.9. %.
%. generagenerall' focusll' focuses on reportes on reporting infoing informatirmation about thon about the enterpre enterprise in its entise in its entiret' ratiret' rather thanher than b' subunits.
b' subunits. Answer(
Answer( A A )*( )*( 0 0 &'pe( &'pe( 33 1.
1. Which of Which of the following the following would li#el' would li#el' be considered be considered an internal an internal user of accountiuser of accounting informationng information rather than an eternal user?
rather than an eternal user? A.
A. @t@tococ#h#hololdedersrs.. B.
B. CoConsnsumumer ger groroupups.s. C
C.. ))eennddeerrss.. .
. MiMiddddlele-l-le$e$el mael managnagersers.. %.
%. oo$e$ernrnmement nt agagenencicieses.. Answer(
Answer( )*( )*( 0 0 &'pe( &'pe( +C+C 12.
12. All of All of the following the following entities would entities would ha$e a need ha$e a need for managerial for managerial accounting informataccounting information ecept(ion ecept( A.
A. eell ll CoCompmpututerer.. B.
B. &he )&he )os Aos Angengeles les odgodgers bers basebaseball call clublub.. C
C.. * f* ff if ic e c e e pe po to t.. .
. &he =e&he =ederderal Bural Bureau of !n$eau of !n$estestigaigatiotion 8=B!n 8=B!9.9. %.
%. 3one of th3one of the abo$e rese abo$e responseponses is corres is correct as all oct as all of these entf these entities wities would usould use managee managerialrial accounting information.
accounting information. Answer(
Answer( % % )*( )*( 0 0 &'pe( &'pe( 33 14.
14. Which of the followiWhich of the following choices corrng choices correctl' depicectl' depicts whether Ban# of Amets whether Ban# of America Microrica Microsoft andsoft and =lorida @tate ni$ersit' would ha$e a need for
=lorida @tate ni$ersit' would ha$e a need for managerial accounting?managerial accounting? Ban#
Ban# o
of f AAmmeerriiccaa MMiiccrroossoofftt
=lorida @tate =lorida @tate ni$ersit' ni$ersit' A
A.. eess eess 33oo
B
B.. eess 33oo eess
C
C.. eess eess eess
.. 33oo eess 33oo
%
%.. 33oo eess eess
Answer(
Answer( C C )*( )*( 0 0 &'pe( &'pe( 33 17.
17. =inan=inancial accoucial accounting fonting focuses pricuses primarilmaril' on reporti' on reporting(ng( A.
A. to pato partirties oues outsitside of an ode of an orgarganiznizatiation.on. B.
B. to pato partirties wies withithin an orn an organganizaizatiotion.n. C.
C. to an oto an orgarganiznizatiation6on6s boas board of dird of directrectorsors.. .
. to to finfinancancial ial insinstittitutiutionsons.. %.
%. for for finfinanciancial al insinstittitutiutionsons.. Answer(
Answer( A A )*( )*( 0 0 &'pe( &'pe( +C+C
1:.
1:. Which of tWhich of the following he following statements represents statements represents a similarit' a similarit' between financial between financial and managerialand managerial accounting?
accounting? A.
A. Both Both are usare useful ieful in pro$n pro$iding iding inforinformatiomation for en for eternternal useral users.s. B.
B. BoBoth ath are gore go$e$ernrned bed b' A' AA/A/.. C.
C. Both dBoth draw uporaw upon data fn data from an orom an organirganizatiozation6s accon6s accountinunting s'stg s'stem.em. .
. Both Both rel' rel' hea$ihea$il' on l' on publipublished shed finanfinancial scial statemtatements.ents. %.
%. Both Both are soare solel' lel' concerconcerned wned with hith histoistorical rical transatransactionctions.s. Answer(
Answer( C C )*( )*( 0 0 &'pe( &'pe( 33 ,<.
,<. Which of the folWhich of the following emplo'ees lowing emplo'ees at American at American Airlines would not Airlines would not be considered as be considered as holding aholding a line position?
line position? A A.. //iilloott.. B.
B. ChiChief fef finainancincial al offofficeicer 8Cr 8C=*9=*9.. C.
C. =l=ligight atht attetendndanant.t. .
. &&i ci c# e# et a gt a ge ne nt .t . %.
%. BaBaggggagage he hanandldlerer.. Answer(
Answer( B B )*( )*( &'pe( &'pe( 33 ,1.
,1. Which of tWhich of the following he following emplo'ees would emplo'ees would be considered be considered as holding as holding a line a line position?position? A.
A. &he c&he contontrolroller oler of %f %on Coon Corporporatrationion.. B.
B. &he $i&he $ice-presce-president ident for gofor go$ernm$ernment relent relationations of Mis of Microsofcrosoft.t. C.
C. &he man&he manager of foager of food and bod and be$erage e$erage ser$icser$ices at ies at isne'6sne'6s Magic s Magic ingdingdom.om. .
. A secA secretretar' emar' emploplo'ed b' De'ed b' Dewlewlett-tt-/ac/ac#ar#ard.d. %.
%. 3o3one ne of of ththe ae abobo$e$e.. Answer(
Answer( C C )*( )*( &'pe( &'pe( 33 ,,.
,,. Which of the folWhich of the following emplo'ees lowing emplo'ees at @tarbuc#s woulat @tarbuc#s would li#el' be d li#el' be considered as holdinconsidered as holding a staffg a staff position?
position? A.
A. &he co&he compampan'6n'6s chies chief operf operatiating offng officeicer 8C**r 8C**9.9. B.
B. &he m&he manager anager of a stof a store loore located icated in ansn ansas Cias Cit' t' MissMissouri.ouri. C.
C. &he co&he compampan'6n'6s leads lead in-h in-housouse attoe attorne'rne'.. .
. &he co&he compampan'6n'6s chies chief finanf financiacial offil officer 8C=cer 8C=*9.*9. %.
%. Both thBoth the compane compan'6s lead'6s lead in-ho in-house attuse attorne' and torne' and the chief fihe chief financinancial offial officer.cer. Answer(
Answer( % % )*( )*( &'pe( &'pe( 33 ,.
,. &he chief man&he chief managerial anagerial and financid financial accounal accountant of an orgtant of an organizatanization is the(ion is the( A.
A. chichief ef eeeecutcuti$e i$e offofficeicer 8Cr 8C%*9%*9.. B .
B . ttr er ea sa su ru re re r.. C.
C. $ic$ice-pe-presresideident nt of of accaccounountinting.g. .
. ininteternrnal al auaudiditotorr.. %.
%. chichief ef finfinancancial ial offofficeicer 8r 8C=*C=*9.9. Answer(
Answer( % % )*( )*( &'pe( &'pe( +C+C ,0.
,0. Which of the folWhich of the followinlowing t'picalg t'picall' does not rell' does not relate to the role of a contate to the role of a controllerroller?? A.
A. A cA controontroller ller super$super$ises ises the athe accountccounting ding departmepartment.ent. B.
B. A A contrcontroller oller safegusafeguards ards an oan organirganizatiozation6s n6s assetsassets.. C.
C. A contA controller o$roller o$ersees the prersees the preparateparation of reportion of reports re;uires re;uired b' go$ernmd b' go$ernmental autental authorithorities.ies. .
. A contA controller noroller normall' asrmall' assumes a narrsumes a narrow role witow role within the orghin the organizatanization oftion often pre$enen pre$enting theting the indi$idual6s rise to top management ran#s.
indi$idual6s rise to top management ran#s. %.
%. ChChoioices ces "B"B" an" and "d "" ab" abo$o$e.e. Answer(
,.
,. A conA controlltroller is noer is normall' rmall' in$olin$ol$ed wit$ed with(h( A.
A. preprepariparing fing finannanciacial stl stateatemenments.ts. B.
B. mamananagiging ing in$n$esestmtmenentsts.. C.
C. raraisisining cag capipitatal.l. .
. sasafegfeguauardrdining ag assssetets.s. %.
%. manmanagiaging tng the fhe firmirm6s c6s crediredit pot policlic'.'. Answer(
Answer( A A )*( )*( 2 2 &'pe( &'pe( +C+C ,2.
,2. Which oWhich of the follf the following iowing is not a functs not a function of thion of the treasue treasurer?rer? A.
A. @a@afefeguguarardiding ng asassesetsts.. B.
B. MaMananagiging ing in$n$esestmtmenentsts.. C.
C. /re/reparparing ing finfinancancial ial stastatemtementents.s. .
. Being Being responresponsible sible for an for an entitentit'6s c'6s credit redit policpolic'.'. %.
%. +a+aisisining cg capapititalal.. Answer(
Answer( C C )*( )*( 2 2 &'pe( &'pe( +C+C ,4.
,4. ManManageragerial acial accoucountantantsnts(( A.
A. oftoften woen wor# on crr# on crossoss-fu-functnctionional teaal teams.ms. B.
B. are loare locatcated thred througoughouhout an orgt an organianizatzationion.. C.
C. are found tare found throughroughout an ohout an organirganizatiozation and wor# on cn and wor# on cross-fross-functiunctional teonal teams.ams. .
. are found pare found primaririmaril' at lowl' at lower le$els oer le$els of the orgaf the organizatnizational hiional hierarch'erarch'.. %.
%. are founare found primd primaril' aaril' at hight higher le$eler le$els of the os of the organrganizatioizational hinal hierarch'erarch'.. Answer(
Answer( C C )*( )*( 2 2 &'pe( &'pe( +C+C ,7.
,7. &he two &he two dimendimensions sions of manof managerial agerial accountaccounting areing are(( A.
A. a decisioa decision-facin-facilitatlitating diming dimensioension and a decision and a decision-infln-influencinuencing dimensg dimension.ion. B.
B. a decisioa decision-facin-facilitatlitating diming dimensioension and a financian and a financial-infll-influenciuencing dimenng dimension.sion. C.
C. a decisia decision-inon-influenfluencing dimcing dimensioension and a costn and a cost-mini-minimizinmizing dimensg dimension.ion. .
. a cost-ma cost-miniminimizing diizing dimensimension and a proon and a profit-mfit-maimiaimizing dimzing dimensioension.n. %.
%. a decisia decision-inon-influenfluencing dimcing dimensioension and a profn and a profit-mait-maimizimizing diming dimensioension.n. Answer(
Answer( A A )*( )*( 4 4 &'pe( &'pe( +C+C ,:.
,:. Much of mMuch of managerianagerial accounal accounting iting informnformation is bation is based on(ased on( A.
A. a coa costst-b-benenefiefit tt thehememe.. B.
B. prprofiofit mt maiaimimizatzatioion.n. C.
C. coscost t mimininimimizazatitionon.. .
. the gethe generneratiation of eon of eterternal innal inforformatmationion.. %.
%. effeffectecti$ei$enesness bus but not not eft efficficienienc'c'.. Answer(
Answer( A A )*( )*( 4 4 &'pe( &'pe( 33 <.
<. Which of the follWhich of the following is not normowing is not normall' consall' considered to be an elemenidered to be an element of e-businet of e-business?ss? A .
A . % -% -bbu du dgge te ti ni ng .g . B.
B. @u@uppppl'l'-c-chahain manain managegemementnt.. C
C.. % -% -cco mo mmme re rc ec e.. .
. BaBalalancnced ed scscororececarardsds.. %.
%. ChChoioiceces "Bs "B" an" and "d "" ab" abo$o$e.e. Answer(
Answer( )*( )*( 4 4 &'pe( &'pe( +C+C 1.
1. ManagManagerial accoerial accountiunting has changng has changed in recent 'eaed in recent 'ears becausrs because of(e of( A.
A. ththe groe growtwth of e-h of e-bubusisinenessss.. B.
B. incincreasreased ed gloglobal bal comcompetpetitiition.on. C.
C. the the emeemergergence nce of nof new iew indundustrstriesies.. .
. an inan increcreased ased focfocus on us on the cthe custustomeomer.r. %.
%. alall ol of tf the ahe abobo$e f$e factactorors.s.
Answer(
Answer( % % )*( )*( 4 4 &'pe( &'pe( +C+C ,.
,. ManageManagerial accorial accountinunting has changeg has changed in recent 'eard in recent 'ears becauss because of(e of( A.
A. a groa growing wing ser$iser$ice ecoce econom' nom' in thin the nie nited @ted @tatestates.. B.
B. the the growigrowing png populopularit' arit' of cof cross-fross-functiunctional onal teamsteams.. C.
C. comcomputputer-er-intintegregrateated d manmanufaufactucturinring g 8C!8C!M9.M9. .
. titimeme-b-basased comped competetititioion.n. %.
%. alall ol of tf the he ababo$o$e fe factactorors.s. Answer(
Answer( % % )*( )*( 4 4 &'pe( &'pe( +C+C .
. Which of tWhich of the following he following statement8s9 about statement8s9 about 5ust-in-time 8E5ust-in-time 8E!&9 in$entor' !&9 in$entor' management is management is 8are98are9 true?
true? I.
I. &he emphasis of E!& is on "pull" manufacturing.&he emphasis of E!& is on "pull" manufacturing. II.
II. +aw materials are purchased 5ust in time to +aw materials are purchased 5ust in time to be used in production.be used in production. III.
III. E!& is an in$entor' techni;ue that focuses on rE!& is an in$entor' techni;ue that focuses on r eduction of both in$entor' and relatededuction of both in$entor' and related in$entor' costs. in$entor' costs. A A.. ! o! onnll''.. B B.. !!! ! oonnll''.. C C.. !!!!! ! oonnll''.. .. !!! a! annd d !!!!!!.. % . % . ! ! ! !! ! a an d n d ! !! !! .! . Answer(
Answer( % % )*( )*( 4 4 &'pe( &'pe( +C+C 0.
0. *hio Corporation *hio Corporation recentl' implementrecentl' implemented a 5used a 5ust-in-time 8E!&9 t-in-time 8E!&9 production s'stem production s'stem along with along with aa series of continuous impro$ement programs.
series of continuous impro$ement programs. !f the firm is now considering adopting a total!f the firm is now considering adopting a total ;ualit' management 8&FM9 program it would li#el' find that &FM(
;ualit' management 8&FM9 program it would li#el' find that &FM( A.
A. is conis consistensistent witt with both both E!& h E!& and coand continuntinuous ious impro$mpro$ement.ement. B.
B. is consis consistent istent with E!& with E!& but incbut inconsisonsistent witent with contth continuouinuous impros impro$ement$ement.. C.
C. is consis consistent istent with conwith continutinuous impous impro$emenro$ement but incot but inconsistnsistent with Eent with E!&!&.. .
. is incis inconsisonsistent witent with botth both E!& anh E!& and contd continuouinuous imprs impro$emeno$ement.t. %.
%. is an anis an anti;ti;uatuated maned managemagement tent techechni;ni;ue.ue. Answer(
Answer( A A )*( )*( 4 4 &'pe( &'pe( 33 .
. Cost manCost management sagement s'stem'stems tend to focus tend to focus on an organis on an organizationzation6s(6s( A
A.. mma ca chhiinneess.. B
B.. eemmpplloo''eee se s.. C .
C . a ca ctti $i $iit it ie se s.. .
. c uc us ts to mo me re rs .s . %.
%. ruruleles as and nd regregululatatioionsns.. Answer(
Answer( C C )*( )*( 4 4 &'pe( &'pe( +C+C 2.
2. &he $alue ch&he $alue chain of a manufacain of a manufacturer wouturer would tend to incld tend to include actilude acti$iti$ities related tes related to(o( A.
A. mamanunufafactctururining.g. B.
B. resreseaearch arch and dend de$e$elolopmpmenent.t. C.
C. prprododucuct dt desesigign.n. .
. mma ra r##e te ti ni ngg.. %.
%. alall l of of ththe e ababo$o$e.e. Answer(
Answer( % % )*( )*( 7 7 &'pe( &'pe( +C+C 4.
4. Which of the folloWhich of the following choiwing choices correctces correctl' depictl' depicts acti$its acti$ities that woulies that would be included in ad be included in a manufacturer6s $alue chain?
manufacturer6s $alue chain? +esearch and +esearch and
e$elopment Mar#eting istribution
A. es es 3o
B. es 3o es
C. es es es
. 3o es 3o
%. 3o es es
Answer( C )*( 7 &'pe( +C
7. Which of the preceding acti$ities would li#el' not be considered part of &he ap clothing compan'Gs $alue chain?
A. esigning a new product line.
B. )ocating and then negotiating terms with a clothing manufacturer. C. Mar#eting an eisting product line.
. istributing goods from regional warehouses to local stores.
%. All of the abo$e acti$ities would be an element in the compan'Gs $alue chain. Answer( % )*( 7 &'pe( +C
:. &he acti$ities performed b' a manufacturing organization could be categorized as pre- production 8such as research and de$elopment and product design9 production-related and post- production 8such as mar#eting and customer ser$ice9. Which acti$ities should the firm focus on if
management understands the $alue chain concept and desires to meet organizational goals? A. /re-production acti$ities.
B. /roduction-related acti$ities. C. /ost-production acti$ities.
. /re-production production-related and post-production acti$ities. %. /re-production and production-related acti$ities.
Answer( )*( 7 &'pe( 3
0<. !n order for a compan' to achie$e a sustainable competiti$e ad$antage it must perform $alue chain acti$ities(
A. at the same ;ualit' le$el as competitors at the same cost. B. at the same ;ualit' le$el as competitors but at a lower cost. C. at a higher ;ualit' le$el than competitors at a higher cost. . at a higher ;ualit' le$el than competitors but at no greater cost.
%. at either the same ;ualit' le$el as competitors but at a lower cost or at a higher ;ualit' le$el than competitors but at no greater c ost.
Answer( % )*( 7 &'pe( +C
01. &he process of managing the $arious acti$ities in the $alue chain along with the associated costs is commonl' #nown as(
A. acti$it'-based costing. B. strategic cost management. C. total ;ualit' management. . computer-integrated costing. %. sound management practices 8@M/9. Answer( B )*( 7 &'pe( +C
0,. A compan' has a bottlenec# operation that slows production. Which of the following tools or approaches could the firm use to determine the most cost-effecti$e wa's to eliminate this problem?
A. )inear programming. B. &heor' of constraints. C. ecision-tree diagrams. . /a'off matrices.
%. @trategic path anal'sis 8@/A9. Answer( B )*( 7 &'pe( +C
0. Which of the following can be lin#ed to the relati$el' recent wa$e of corporate scandals? A. reed' corporate eecuti$es.
B. Managers who ma#e o$er-reaching business deals.
C. )ac# of o$ersight b' companies6 audit boards and boards of directors. . @hodd' wor# b' eternal auditors.
%. All of the abo$e. Answer( % )*( : &'pe( +C
00. Which of the following acts stri$es to impro$e corporate go$ernance and the ;ualit' of corporate accounting>reporting? A. +obinson-/atman. B. &aft-Dartle'. C. @arbanes-*le'. . Bush-Chene'. %. =ran#s-Ashcroft. Answer( C )*( : &'pe( +C
0.Which of the following statements about the ethical climate of business is false? A. reed' corporate eecuti$es are in part to blame for the relati$el' recent rash of
corporate scandals.
B. nethical business beha$ior can ha$e a negati$e impact on our econom'.
C. &he @arbanes-*le' Act stri$es to impro$e the o$erall ;ualit' of corporate reporting. . &he +obinson-/atman Act stri$es to impro$e the o$erall ;ualit' of corporate reporting. %. Corporate scandals ha$e ser$ed as the accounting professionGs wa#e-up call to pa'
increased attention to ethical issues in the conduct of business. Answer( )*( : &'pe( +C
02. Which of the following is not an ethical standard of managerial accounting? A . Co mp et en ce . B. Confidentialit'. C . % ff ic ie nc '. . ! nt egr it '. % . Cr ed ib il it '. Answer( C )*( : &'pe( +C
04. Which of the following is not an element of competenc'? A. &o de$elop appropriate #nowledge about a particular sub5ect. B. &o perform duties in accordance with rele$ant laws.
C. &o perform duties in accordance with rele$ant technical standards.
. &o refrain from engaging in an acti$it' that would discredit the accounting profession. %. &o prepare clear reports after an anal'sis of rele$ant and reliable information.
07. Assume that a managerial accountant regularl' communicates with business associates to a$oid conflicts of interest and ad$ises rele$ant parties of potential conflicts. !n so doing the accountant will ha$e applied the ethical standard of (
A. ob5ecti$it'. B. confidentialit'. C . in te gr it'. . credibilit'. %. unified beha$ior. Answer( C )*( : &'pe( +C
Balanced Scorecard
&he balanced scorecard is a business model that helps to assess a firm6s competiti$e position and ensures that the firm is progressing toward long-term sur$i$al. Balanced scorecards differ from organization to organizationH howe$er in addition to customer-satisfaction measures most ha$e a combination of financial measures internal operating measures and measures of inno$ation>growth and learning.
Managerial Accounting vs. inancial Accounting
0. Briefl' distinguish between managerial accounting and financial accounting. Be sure to comment on the general focus users and regulation related to the two fields.
)*( 0 &'pe( +C Answer(
Managerial accounting is concerned with pro$iding information to personnel within an organization so that the' can plan ma#e decisions e$aluate performance and control operations. &here are no rules and regulations associated with this field since the information is intended solel' for use within the firm.
MULTIPLE CHOICE QUESTIONS
1. Which of the following statements is true?
A. &he word "cost" has the same meaning in all situations in which it is used.
B. Cost data once classified and recorded for a specific application are appropriate for use in an' application.
C. ifferent cost concepts and classifications are used for different purposes. . All organizations incur the same t'pes of costs.
%. Costs incurred in one 'ear are alwa's meaningful in the following 'ear. Answer( C )*( 1 &'pe( +C
,. /roduct costs are(
A. epensed when incurred. B. i n$e nto ri ed .
C. treated in the same manner as period costs. . treated in the same manner as ad$ertising costs. %. subtracted from cost of goods sold.
Answer( B )*( , &'pe( +C
. Which of the following is a product cost? A. lass in an automobile.
B. A d$ er tis in g.
C. &he salar' of the $ice president-finance. . +ent on a factor'.
%. Both "A" and "." Answer( % )*( , &'pe( 3
0. Which of the following would not be classified as a product cost? A. irect materials.
B. ir ec t la bo r. C. !ndirect materials.
. !nsurance on the manufacturing plant. %. @ales commissions.
Answer( % )*( , &'pe( +C 3
. &he accounting records of &acoma Compan' re$ealed the following costs( direct materials used I14<<<<H direct labor I<<<<H manufacturing o$erhead I0<<<<<H and selling and
administrati$e epenses I,,<<<<. &acoma6s product costs total( A. I,<<<<.
B. I4<<<<. C. I:,<<<<. . I 1 10< << <. %. some other amount. Answer( C )*( , &'pe( A
2. Costs that are epensed when incurred are called( A. product costs. B . d ir ec t c os ts . C. in$entoriable costs. . p er io d co st s. %. indirect costs. Answer( )*( , &'pe( +C 4. Which of the following is a period cost?
A. irect material. B. Ad$ertising epense.
C. epreciation on cars dri$en b' a firm6s president and treasurer. . Miscellaneous supplies used in production acti$ities. %. Both "B" and "C."
Answer( % )*( , &'pe( 3
7. Which of the following is not a period cost? A . ) ega l c os ts .
B. /ublic relations costs. C. @ales commissions.
. Wages of assembl'-line wor#ers.
%. &he salar' of a compan'6s chief financial officer 8C=*9. Answer( )*( , &'pe( +C 3
:. &he accounting records of Dill Corporation re$ealed the following selected costs( @ales commissions I0<<<<H plant super$ision I:0<<<H and administrati$e epenses I17<<<. Dill6s period costs total(
A. I0<<<<. B. I:0<<<. C. I17<<<. . I,,<<<. %. I1:<<<. Answer( )*( , &'pe(
1<. Which of the following entities would most li#el' ha$e raw materials wor# in process and finished goods?
A. %on Corporation. B. Mac'6s epartment @tore. C. We nd'6s.
. @outhwest Airlines. %. Columbia ni$ersit'. Answer( A )*( &'pe( 3
11. @elling and administrati$e epenses would li#el' appear on the balance sheet of( A. &he ap.
B. &eas !nstruments. C. &urner Broadcasting @'stem. . all of the abo$e firms. %. none of the abo$e firms. Answer( % )*( &'pe( 3
1,. Which of the following in$entories would a discount retailer such as Wal-Mart report as an asset?
A. +aw materials. B. Wor# in process. C. =inished goods. . Merchandise in$entor'. %. All of the abo$e. Answer( )*( &'pe( +C
1. Which of the following in$entories would a compan' ordinaril' hold for sale? A. +aw materials.
B. Wor# in process. C. =inished goods.
. +aw materials and finished goods. %. Wor# in process and finished goods. Answer( C )*( &'pe( +C
10. Jeno Corporation engages in mass customization and direct sales the latter b' accepting customer orders o$er the !nternet. As a result Jeno(
A. would probabl' begin the manufacturing process upon receipt of a customer6s order. B. would t'picall' ha$e fairl' low in$entor' le$els for the amount of sales re$enue
generated.
C. would t'picall' ha$e fairl' high in$entor' le$els for the amount of sales re$enue generated.
. would li#el' find choices "A" and "B" to be applicable. %. would li#el' find choices "A" and "C" to be applicable. Answer( )*( 0 &'pe( +C
1. Companies that engage in mass customization( A. tend to ha$e a relati$el' low production $olume.
B. tend to ha$e a high production $olume that in$ol$es highl' standardized end-products. C. tend to ha$e a high production $olume man' standardized components and
customer-specified combinations of components.
. tend to ha$e a high production $olume man' uni;ue components and customer-specified combinations of components.
%. could be t'pified b' the refining operations of @hell *il. Answer( C )*( 0 &'pe( +C
12. Midwest Motors manufactures automobiles. Which of the following would not be classified as direct materials b' the compan'?
A. @heet metal used in the automobile6s bod'. B. &ires.
C. !nterior leather. . C pla 'e r. %. Wheel lubricant. Answer( % )*( &'pe( 3
14. Which of the following emplo'ees of a commercial printer>publisher would be classified as
direct labor? A . Bo o# bi nd er. B. /lant securit' guard. C. @ales representati$e. . /lant super$isor. %. /a'roll super$isor. Answer( A )*( &'pe( 3
17. 3orwood Appliance produces washers and dr'ers in an assembl'-line process. )abor costs incurred during a recent period were( corporate eecuti$es I1<<<<<H assembl'-line wor#ers I7<<<<H securit' guards I17<<<H and plant super$isor I<<<<. &he total of 3orwood6s direct labor cost was(
A. I7<<<<. B. I:7<<<. C. I11<<<<. . I1,7<<<. %. I,,7<<<. Answer ( A )*( &'pe( A
1:. Which of the following emplo'ees would not be classified as indirect labor? A . Cu st od ia n.
B . @ ale sp er son .
C. Assembler of wooden furniture. . /lant securit' guard.
%. Choices "B" and "C." Answer( % )*( &'pe( +C 3
,<. epreciation of factor' e;uipment would be classified as( A. operating cost. B . " ot he r" c os t. C. manufacturing o$erhead. . depreciation epense. %. administrati$e cost. Answer( C )*( &'pe( +C
,1. Which of the following costs is not a component of manufacturing o$erhead? A. !ndirect materials.
B. =actor' utilities. C. =actor' e;uipment. . !ndirect labor.
%. /ropert' taes on the manufacturing plant. Answer( C )*( &'pe( +C
,,. &he accounting records of Westcott Compan' re$ealed the following costs(
=actor'utilities I<<<
Wages of assembl'-line personnel 14<<<<
Customer entertainment 0<<<
!ndirect materials used 1:<<<
epreciation on salespersons6 cars 1<<< /roduction e;uipment rental costs 11<<<< Costs that would be considered in the ca lculation of manufacturing o$erhead total( A. I120<<<.
C. I7<<<. . I0<<<<. %. some other amount. Answer( A )*( &'pe( A
,. Which of the following statements is 8are9 correct?
A. *$ertime premiums should be treated as a component of manufacturing o$erhead. B. *$ertime premiums should be treated as a component of direct labor.
C. !dle time should be treated as a component of direct labor. . !dle time should be accounted for as a special t'pe of loss. %. Both "B" and "C" are correct.
Answer( A )*( &'pe( +C ,0. Con$ersion costs are(
A. direct material direct labor and manufacturing o$erhead. B. direct material and direct labor.
C. direct labor and manufacturing o$erhead. . p ri me co st s.
% . p er io d c os ts . Answer( C )*( &'pe( +C ,. /rime costs are comprised of(
A. direct materials and manufacturing o$erhead. B. direct labor and manufacturing o$erhead.
C. direct materials direct labor and manufacturing o$erhead. . direct materials and direct labor.
%. direct materials and indirect materials. Answer( )*( &'pe( +C
,2. Which of the following statements is true? A. /roduct costs affect onl' the balance sheet. B. /roduct costs affect onl' the income statement. C. /eriod costs affect onl' the balance sheet.
. /eriod costs affect both the balance sheet and the income statement.
%. /roduct costs e$entuall' affect both the balance sheet and the income statement. Answer( % )*( 2 &'pe( 3
,4. !n a manufacturing compan' the cost of goods completed during the period would include which of the following elements?
A. +aw materials used.
B. Beginning finished goods in$entor'. C. Mar#eting costs.
. epreciation of deli$er' truc#s. %. More than one of the abo$e. Answer( A )*( 2 &'pe( +C
,7. Which of the following e;uations is used to calculate cost of goods sold during the period? A. Beginning finished goods K cost of goods manufactured K ending finished goods. B. Beginning finished goods - ending finished goods.
C. Beginning finished goods K cost of goods manufactured.
. Beginning finished goods K cost of goods manufactured - ending finished goods. %. Beginning finished goods K ending finished goods - cost of goods manufactured. Answer( )*( 2 &'pe( +C
,:. Wor#-in-process in$entor' is composed of( A. direct material and direct labor. B. direct labor and manufacturing o$erhead. C. direct material and manufacturing o$erhead. . direct material onl'.
%. direct material direct labor and manufacturing o$erhead. Answer( % )*( 2 &'pe( +C
<. =ort Walton !ndustries began Eul' with a goods in$entor' of I07<<<. &he finished-goods in$entor' at the end of Eul' was I01<<< and the cost of finished-goods sold during the month was I1,<<<. &he cost of goods manufactured during Eul' was(
A. I44<<<. B. I70<<<. C. I117<<<. . I1,<<<. %. some other amount. Answer( C )*( 2 &'pe( A
1. ansas /lating Compan' reported a cost of goods manufactured of I,2<<<< with the firm6s 'ear-end balance sheet re$ealing wor# in process and finished goods of I<<< and I24<<< respecti$el'. !f supplemental information disclosed raw materials used in production of I0<<<< direct labor of I4<<<< and manufacturing o$erhead of I1,<<<< the compan'6s beginning wor# in process must ha$e been(
A. I<<<. B. I4<<<. C. I2<<<. . I:4<<<. %. some other amount. Answer( C )*( 2 &'pe( A
,. &he accounting records of Bronco Compan' re$ealed the following information(
+awmaterialsused I 2<<<<
irectlabor 1,<<< Manufacturing o$erhead 2<<<< Wor#-in-process in$entor' 1>1 <<<< =inished-goods in$entor' 1>1 17:<<< Wor#-in-process in$entor' 1,>1 42<<< =inished-goods in$entor' 1,>1 10<<<< Bronco6s cost of goods manufactured is(
A. I1:<<<. B. I,,<<<. C. I27<<<. . I41<<<. %. some other amount. Answer ( A )*( 2 &'pe( A
. &he accounting records of olphin Compan' re$ealed the following information(
&otal manufacturing costs I<<<< Wor#-in-process in$entor' Ean. 1 2<<< Wor#-in-process in$entor' ec. 1 47<<< =inished-goods in$entor' Ean. 1 102<<< =inished-goods in$entor' ec. 1 1,<<<
olphin6s cost of goods sold is( A. I<7<<<.
B. I,:<<<. C. I1<<<. . I<<<. %. some other amount. Answer( C )*( 2 &'pe( A
0. =or the 'ear 5ust ended Cole Corporation6s manufacturing costs 8raw materials used direct labor and manufacturing o$erhead9 totaled I1<<<<<. Beginning and ending wor#-in-process in$entories were I2<<<< and I:<<<< respecti$el'. Cole6s balance sheet also re$ealed respecti$e beginning and ending finished-goods in$entories of I,<<<< and I17<<<<. *n the basis of this information how much would the compan' report as cost of goods manufactured
8CM9 and cost of goods sold 8C@9? A. CM I10<<<<H C@ I102<<<<. B. CM I104<<<<H C@ I10<<<<. C. CM I1<<<<H C@ I102<<<<. . CM I14<<<<H C@ I10<<<<. %. @ome other amounts.
Answer( B )*( 2 &'pe( A
. )eggio !ndustries reported the following data for the 'ear 5ust ended( sales re$enue I:<<<<H cost of goods sold I0,<<<<H cost of goods manufactured I<<<<H and selling and administrati$e epenses I14<<<<. )eggio6s gross margin would be(
A. I<<<<. B. I,<<<<<. C. I2<<<<. . I<<<<. %. I2,<<<<. Answer( )*( 2 &'pe( A
2. /ump#in %nterprises began operations on Eanuar' 1 ,<1 with all of its acti$ities conducted from a single facilit'. &he compan'6s accountant concluded that the 'ear6s building depreciation should be allocated as follows( selling acti$ities ,<LH administrati$e acti$ities LH and manufacturing acti$ities 0L. !f /ump#in sold 2<L of ,<1 production during that 'ear what percentage of the depreciation would appear 8either directl' or indirectl'9 on the ,<1 income
statement? A. ,4L. B. 0L. C. L. . 7,L. %. 1<<L. Answer( )*( 2 &'pe( A
4. An emplo'ee accidentall' o$erstated the 'ear6s ad$ertising epense b' I<<<<. Which of the following correctl' depicts the effect of this error?
A. Cost of goods manufactured will be o$erstated b' I<<<<. B. Cost of goods sold will be o$erstated b' I<<<<.
C. Both cost of goods manufactured and cost of goods sold will be o$erstated b' I<<<<. . Cost of goods sold will be o$erstated b' I<<<< and cost of goods manufactured will be
understated b' I<<<<. %. 3one of the abo$e. Answer( % )*( 2 &'pe( A
7. Which of the following would li#el' be a cost dri$er for the amount of direct materials used? A. &he number of units sold.
B. &he number of direct labor hours wor#ed. C. &he number of machine hours wor#ed. . &he number of emplo'ees wor#ing in the factor'. %. &he number of units produced.
Answer( % )*( 4 &'pe( 3
:. &he choices below depict fi$e costs of Benton Corporation and a possible dri$er for each cost. Which of these choices li#el' contains an inappropriate cost dri$er?
A. asoline consumedH number of miles dri$en.
B. Manufacturing o$erhead incurred in a hea$il' automated facilit'H direct labor hours. C. @ales commissionsH gross sales re$enue.
. Building maintenance costH building s;uare footage. %. /ersonnel department costH number of emplo'ees. Answer( B )*( 4 &'pe( 3
0<. ariable costs are those costs that( A. $ar' in$ersel' with changes in acti$it'. B. $ar' directl' with changes in acti$it'. C. remain constant as acti$it' changes.
. decrease on a per-unit basis as acti$it' increases. %. increase on a per-unit basis as acti$it' increases. Answer( B )*( 7 &'pe( +C
01. As acti$it' decreases unit $ariable cost( A. increases proportionatel' with acti$it'. B. decreases proportionatel' with acti$it'. C. remains constant.
. increases b' a fied amount. %. decreases b' a fied amount. Answer( C )*( 7 &'pe( +C
0,. Which of the following is not an eample of a $ariable cost?
A. @traight-line depreciation on a machine that has a fi$e-'ear ser$ice life. B. Wages of manufacturing wor#ers whose pa' is based on hours wor#ed. C. &ires used in the production of tractors.
. Aluminum used to ma#e patio furniture. %. Commissions paid to sales personnel. Answer( A )*( 7 &'pe( 3
0. =ied costs are those costs that(
A. $ar' directl' with changes in acti$it'. B. $ar' in$ersel' with changes in acti$it'. C. remain constant on a per-unit basis.
. increase on a per-unit basis as acti$it' increases. %. remain constant as acti$it' changes.
Answer( % )*( 7 &'pe( +C 00. &he fied cost per unit(
A. will increase as acti$it' increases. B. will increase as acti$it' decreases. C. will decrease as acti$it' increases. . will remain constant.
%. will ehibit the beha$ior described in choices "B" and "C." Answer( % )*( 7 &'pe( 3
0. Which of the following is an eample of a fied cost? A. /aper used in the manufacture of tetboo#s.
B. /ropert' taes paid b' a firm to the Cit' of )os Angeles. C. &he wages of part-time wor#ers who are paid I7 per hour. . asoline consumed b' salespersons6 cars.
%. @urgical supplies used in a hospital6s operating room. Answer( B )*( 7 &'pe( 3
02. &he $ariable costs per unit are I0 when a compan' produces 1<<<< units of product. What are the $ariable costs per unit when 7<<< units are produced?
A. I0.<<. B. I0.<. C. I.<<. . I.<.
%. @ome other amount. Answer( A )*( 7 &'pe( A
04. &he fied costs per unit are I1< when a compan' produces 1<<<< units of product. What are the fied costs per unit when 1,<< units are produced?
A. I0. B. I2. C. I7. . I1<.
%. @ome other amount. Answer( C )*( 7 &'pe( A
07. &otal costs are I1,<<<< when 1<<<< units are producedH of this amount $ariable costs are I07<<<. What are the total costs when 1,<<< units are produced?
A. I42<<. B. I4,<<<. C. I1,<<<<. . I1,:2<<. %. I100<<<. Answer( )*( 7 &'pe( A
0:. Bater Compan' which pa's a 1<L commission to its salespeople reported sales re$enues of I,1<<<< for the period 5ust ended. !f fied and $ariable sales epenses totaled I2<<< what would these epenses total at sales of I127<<<?
A. I127<<. B. I<<<. C. I007<<. . I17<<.
%. @ome other amount. Answer( )*( 7 &'pe( A
<. Which of the following would not be characterized as a cost ob5ect? A. An automobile manufactured b' eneral Motors.
B. &he 3ew or# =ire epartment.
C. A Burger ing restaurant located in Cle$eland *hio. . A elta Airlines flight from Atlanta to Miami. %. All of the abo$e are eamples of cost ob5ects.
Answer( % )*( : &'pe( 3
1. Costs that can be easil' traced to a specific department are called( A . d ir ec t co sts . B. indirect costs. C. product costs. . manufacturing costs. %. processing costs. Answer ( A )*( : &'pe( +C
,. Which of the following would not be considered a direct cost with respect to the ser$ice department of a new car dealership?
A. Wages of repair techni;ues. B. /ropert' taes paid b' the dealership. C. +epair parts consumed.
. @alar' of the department manager.
%. epreciation on new e;uipment used to anal'ze engine problems. Answer( B )*( : &'pe( 3
. !ndirect costs(
A. can be traced to a cost ob5ect.
B. cannot be traced to a particular cost ob5ect. C. are not important.
. are alwa's $ariable costs.
%. ma' be indirect with respect to isne' World but direct with respect to one its ma5or components %pcot Center.
Answer( B )*( : &'pe( +C 3
0. &he salar' that is sacrificed b' a college student who pursues a degree full time is a8n9( A. sun# cost. B. out-of-poc#et cost. C. opportunit' cost. . differential cost. % . ma rg in al c ost . Answer( C )*( 1< &'pe( 3
. &he tuition that will be paid net semester b' a college student who pursues a degree is a8n9( A. sun# cost. B. out-of-poc#et cost. C. indirect cost. . a $e ra ge c ost . % . ma rg in al c ost . Answer( B )*( 1< &'pe( 3
2. Which of the following costs should be ignored when choosing among alternati$es? A. *pportunit' costs.
B. @un# costs. C. *ut-of-poc#et costs. . ifferential costs. %. 3one of the abo$e. Answer( B )*( 1< &'pe( +C
I12<<< is termed the( A. opportunit' cost. B. a $e ra ge co st. C. sun# cost. . out-of-poc#et cost. %. differential cost. Answer( % )*( 1< &'pe( 3 se the following to answer ;uestions 7-:(
Wee Care is a nurser' school for pre-#indergarten children. &he school has determined that the following biwee#l' re$enues and costs occur at different le$els of enrollment(
3umber of
@tudents %nrolled &otal +e$enue &otal Costs
1< I<<< $2,100
1 0<< 2,700
12 07<< 2,800
,< 2<<< 3,200
,1 2<< 3,255
7. &he marginal cost when the twent'-first student enrolls in the school is( A. I. B. I1. C. I<<. . I<0. %. I,. Answer( A )*( 1< &'pe( A
:. &he a$erage cost per student when 12 students enroll in the school is( A. I1<<. B. I1,. C. I14. . I<<. %. I0<<. Answer( C )*( 1< &'pe( A
2<. &he costs that follow all ha$e applicabilit' for a manufacturing enterprise. Which of the choices listed correctl' denotes the costsG applicabilit' for a ser$ice pro$ider?
/eriod Cost ncontrollable Cost *pportunit' Cost
Applicable Applicable 3ot applicable
Applicable 3ot applicable Applicable
Applicable Applicable Applicable
3ot applicable Applicable Applicable
3ot applicable Applicable 3ot applicable
Answer( C )*( 1< &'pe( +C
MULTIPLE CHOICE QUESTIONS
1. &he relationship between cost and acti$it' is termed( A. cost estimation. B. cost prediction. C. cost beha$ior. . cost anal'sis. %. cost approimation. Answer( C )*( 1 &'pe( +C
,. Which of the following costs changes in direct proportion to a change in the acti$it' le$el? A. ariable cost. B . =i e d co st . C. @emi$ariable cost. . @tep-$ariable cost. %. @tep-fied cost. Answer( A )*( , &'pe( +C
. Montgomer' Compan' has a $ariable selling cost. !f sales $olume increases how will the total $ariable cost and the $ariable cost per unit beha$e?
&otal ari able Cost ari able Cost /er nit
A. !ncrease !ncrease
B. !ncrease +emain constant
C. !ncrease ecrease
. +emain constant ecrease
%. ecrease !ncrease
Answer( B )*( , &'pe( +C
0. What t'pe of cost ehibits the beha$ior that follows? Manufacturing
olume 8nits9 Cost /er nit <<<< I1.: 4<<<< 1.: A. ariable cost.
B . =i e d co st . C. @emi$ariable cost. . iscretionar' fied cost. %. @tep-fied cost. Answer( A )*( , &'pe( 3
. /laza Corporation obser$ed that when ,<<< units were sold a particular cost amounted to I4<<<< or I,.7< per unit. When $olume increased b' 1L the cost totaled I7<<< 8i.e. I,.7< per unit9. &he cost that /laza is stud'ing can best be described as a(
A. $ariable cost. B . fied cost. C. semi$ariable cost. . discretionar' fied cost. %. step-fied cost. Answer( A )*( , &'pe( 3
2. A compan' obser$ed a decrease in the cost per unit. All other things being e;ual which of the following is probabl' true?
A. &he compan' is stud'ing a $ariable cost and total $olume has increased. B. &he compan' is stud'ing a $ariable cost and total $olume has decreased. C. &he compan' is stud'ing a fied cost and total $olume has increased. . &he compan' is stud'ing a fied cost and total $olume has decreased. %. &he compan' is stud'ing a fied cost and total $olume has remained constant. Answer( C )*( , &'pe( 3
4. Webster has the following budgeted costs at its anticipated production le$el 8epressed in hours9( $ariable o$erhead I1<<<<H fied o$erhead I,0<<<<. !f Webster now re$ises its anticipated production slightl' downward it would epect( A. total fied o$erhead of I,0<<<< and a lower hourl' rate for $ariable o$erhead. B. total fied o$erhead of I,0<<<< and the same hourl' rate for $ariable o$erhead. C. total fied o$erhead of I,0<<<< and a higher hourl' rate for $ariable o$erhead. . total $ariable o$erhead of less than I1<<<< and a lower hourl' rate for
$ariable o$erhead.
%. total $ariable o$erhead of less than I1<<<< and a higher hourl' rate for $ariable o$erhead.
Answer( B )*( , &'pe( 3
7. What t'pe of cost ehibits the beha$ior that follows? Manufacturing olume 8nits9 &otal Cost Cost /er nit <<<< I1<<<< I.<< 7<<<< 1<<<< 1.77 A. ariable cost. B . = i ed c os t. C. @emi$ariable cost. . @tep-$ariable cost. % . M i ed c os t. Answer( B )*( , &'pe( 3
:. When graphed a t'pical $ariable cost appears as( A. a horizontal line.
B. a $ertical line. C. a u-shaped line.
. a diagonal line that slopes downward to the right. %. a diagonal line that slopes upward to the right. Answer( % )*( , &'pe( +C
1<. 3orman Compan' pa's a sales commission of L on each unit sold. !f a graph is prepared with the $ertical ais representing per-unit cost and the horizontal ais
representing units sold how would a li ne that depicts sales commissions be drawn? A. As a straight diagonal line sloping upward to the right.
B. As a straight diagonal line sloping downward to the right.
C. As a horizontal line. . As a $ertical line. %. As a cur$ilinear line. Answer( C )*( , &'pe( 3
11. When graphed a t'pical fied cost appears as( A. a horizontal line.
B. a $ertical line. C. a u-shaped line.
. a diagonal line that slopes downward to the right. %. a diagonal line that slopes upward to the right. Answer( A )*( , &'pe( +C
1,. Costs that remain the same o$er a wide range of acti$it' but 5ump to a different amount outside that range are termed(
A. step-fied costs. B. step-$ariable costs. C. semi$ariable costs. . cur$ilinear costs. % . m i ed cos ts . Answer( A )*( , &'pe( +C
1. @traight-line depreciation is a t'pical eample of a( A. $ariable cost. B. step-$ariable cost. C . f i ed c ost . . m i ed cos t. %. cur$ilinear cost. Answer( C )*( , &'pe( +C
10. Which of the following choices denotes the t'pical cost beha$ior of ad$ertising and sales commissions?
Ad$ertising @ales Commissions
A. ariable ariable B. ariable =ied C. =ied ariable . =ied =ied %. @emi$ariable ariable Answer( C )*( , &'pe( 3
1. ouglas Corporation recentl' produced and sold 1<<<<< units. =ied costs at this le$el of acti$it' amounted to I<<<<H $ariable costs were I1<<<<<. Dow much cost would the compan' anticipate if during t he net period it produced and sold 1<,<<< units?
A . I 1 < << <. B . I11<<<. C . I1,<<<. . I 1 << <.
Answer( C )*( , &'pe( A
12. %tron !nc. has onl' $ariable costs and fied costs. A re$iew of the compan'6s records disclosed that when 1<<<<< units were produced fied manufacturing costs amounted to I,<<<<< and the cost per unit manufactured totaled I. *n the basis of this information how much cost would the firm anticipate at an acti$it' le$el of :4<<< units?
A . I 07 << <. B . I 0:1 << <. C . I 0:0 << <. . I << << <.
%. @ome other amount not listed abo$e. Answer( B )*( , &'pe( A
14. A re$iew of /arr' Corporation6s accounting records found that at a $olume of :<<<< units the $ariable and fied cost per unit amounted to I7 and I0 respecti$el'. *n the basis of this information what amount of total cost would /arr' anticipate at a
$olume of 7<<< units? A. I1<,<<<<. B . I 1 <0 < <<< . C . I 1 <2 < <<< . . I1<7<<<<.
%. @ome other amount not listed abo$e. Answer( B )*( , &'pe( A
17. %ach of a$idson6s production managers 8annual salar' cost I0<<<9 can o$ersee 2<<<< machine hours of manufacturing acti$it'. &hus if the compan' has <<<< hours of manufacturing acti$it' one manager is neededH for 4<<< hours two managers are neededH for 1,<<< hours three managers are neededH and so forth. a$idson6s salar' cost can best be described as a(
A. $ariable cost. B. semi$ariable cost. C. step-$ariable cost. . f ie d co st . %. step-fied cost. Answer( % )*( , &'pe( 3
1:. A cost that has both a fied and $ariable component is termed a( A. step-fied cost. B. step-$ariable cost. C. semi$ariable cost. . cur$ilinear cost. %. discretionar' cost. Answer( C )*( , &'pe( +C ,<. A mied cost is often #nown as a(
A. semi$ariable cost. B. step-fied cost. C. $ariable cost. . cur$ilinear cost. %. discretionar' cost. Answer( A )*( , &'pe( +C
,1. +ichard Damilton has a fast-food franchise and must pa' a franchise fee of I<<< plus L of gross sales. !n terms of cost beha$ior the fee is a(
A. $ariable cost. B . f i ed c ost . C. step-fied cost. . semi$ariable cost. %. cur$ilinear cost. Answer( )*( , &'pe( 3
,,. Which of the following are eamples of a mied cost?
I. A building that is used for both manufacturing and sales acti$ities. II. An emplo'ee6s compensation which consists of a fl at salar' plus a
commission.
III. epreciation that relates to fi$e different machines.
IV. Maintenance cost that must be split between sales and administrati$e offices. A. ! onl'. B. !! onl'. C . ! and !!!. . ! !!! and !. %. ! !! !!! and !. Answer( B )*( , &'pe( 3
,. Which of the following costs ehibits both decreasing and increasing marginal costs o$er a specific range of acti$it'?
A. @emi$ariable cost. B. Cur$ilinear cost. C. @tep-fied cost. . @tep-$ariable cost. % . =i e d co st . Answer( B )*( , &'pe( +C
,0. &he rele$ant range is that range of acti$it'(
A. where a compan' achie$es its maimum efficienc'. B. where units produced e;ual units sold.
C. where management epects the firm to operate. . where the firm will earn a profit.
%. where epected results are abnormall' high. Answer( C )*( &'pe( +C
,. Within the rele$ant range of acti$it' costs( A. can be estimated with reasonable accurac'. B. can be epected to change radicall'.
C. ehibit decreasing marginal cost patterns. . ehibit increasing marginal cost patterns. %. cannot be estimated satisfactoril'. Answer( A )*( &'pe( +C
,2. Within the rele$ant range a cur$ilinear cost function can sometimes be graphed as a( A. straight line. B . 5 ag ge d l in e. C. $ertical line. . cur$ed line. %. horizontal line. Answer( A )*( &'pe( +C
,4. As a firm begins to operate outside the rele$ant range the accurac' of cost estimates for fied and $ariable costs(
=ied Variable
A. increases increases
B. increases decreases
C. decreases increases
. decreases decreases
%. decreases remains unchanged
Answer( )*( &'pe( 3
,7. A $ariable cost that has a definiti$e ph'sical relationship to the acti$it' measure is called a8n9( A. discretionar' cost. B. engineered cost. C. managed cost. . programmed cost. %. committed cost. Answer( B )*( 0 &'pe( +C
,:. Costs that result from an organization6s ownership or use of facilities and its basic organizational structure are termed(
A. discretionar' fied costs. B. committed fied costs. C. discretionar' $ariable costs. . committed $ariable costs. %. engineered costs. Answer( B )*( 0 &'pe( +C <. /ropert' taes are an eample of a8n9(
A. committed fied cost. B. committed $ariable cost. C. discretionar' fied cost. . discretionar' $ariable cost. %. engineered cost.
Answer( A )*( 0 &'pe( +C
1. Which of the following is not an eample of a committed fied cost? A. /ropert' taes.
B. epreciation on buildings. C. @alaries of management personnel. . *utla's for ad$ertising programs. %. %;uipment rental costs.
Answer( )*( 0 &'pe( +C ,. Committed fied costs would include(
A. ad$ertising.
B. research and de$elopment.
C. depreciation on buildings and e;uipment. . contributions to charitable organizations. %. ependitures for direct labor.
Answer( C )*( 0 &'pe( +C
. Amounts spent for charitable contributions are an eample of a8n9( A. committed fied cost.
B. committed $ariable cost. C. discretionar' fied cost. . discretionar' $ariable cost. %. engineered cost.
Answer( C )*( 0 &'pe( +C
0. Which of the following would not t'picall' be classified as a discretionar' fied cost? A. %;uipment depreciation.
B. %mplo'ee de$elopment 8education9 programs. C . A d$e rt is in g.
. *utla's for research and de$elopment. %. Charitable contributions.
Answer( A )*( 0 &'pe( +C
. Which of the following choices correctl' classifies a committed fied cost and a discretionar' fied cost?
Committed iscretionar'
A. /romotion Management salaries
B. Building depreciation Charitable contributions
C. Management training /ropert' taes
. %;uipment rentals %;uipment depreciation
%. +esearch and de$elopment Ad$ertising
Answer( B )*( 0 &'pe( +C
2. Which t'pe of fied cost 819 tends to be more long-term in nature and 8,9 can be cut bac# more easil' in bad economic times without doing serious harm to organizational
goals and ob5ecti$es? )ong &erm in
3ature
Can be Cut Bac# More %asil' !n Bad %conomic &imes
A. Committed Committed
C. iscretionar' Committed
. iscretionar' iscretionar'
%. Committed 3o difference between
committed and discretionar' Answer( B )*( 0 &'pe( 3
4. Digh-tech automation combined with a downsizing of a compan'6s hourl' labor force often results in(
A. increased fied costs and increased $ariable costs. B. increased fied costs and reduced $ariable costs. C. reduced fied costs and increased $ariable costs. . reduced fied costs and reduced $ariable costs.
%. increased discretionar' fied costs and reduced committed fied costs. Answer( B )*( 0 &'pe( +C
7. Which of the following techni;ues is not used to anal'ze cost beha$ior? A. )east-s;uares regression. B. Digh-low method. C. isual-fit method. . )inear programming. %. Multiple regression. Answer( )*( 2 &'pe( +C
:. &he high-low method and least-s;uares regression are used b' accountants to( A. e$aluate di$isional managers for purposes of raises and promotions. B. choose among alternati$e courses of action.
C. maimize output. . estimate costs. %. control operations. Answer( )*( &'pe( +C
0<. Which of the following statements about the $isual-fit method is 8are9 true? I. &he method results in the creation of a scatter diagram.
II. &he method is not totall' ob5ecti$e because of the manner in which the cost line is determined.
III. &he method is especiall' helpful in the determination of outliers. A. ! onl'. B. !! onl'. C. ! and !!. . ! and !!!. % . ! ! ! an d ! !!. Answer( % )*( &'pe( +C
01. &he nonstatistical method of cost estimation that calls for the creation of a scatter diagram is the(
A. least-s;uares regression method.
B. high-low method. C. $isual-fit method. . account anal'sis method. %. multiple regression method. Answer( C )*( &'pe( +C
0,. Which of the following methods of cost estimation relies on onl' two data points? A. )east-s;uares regression.
B. &he high-low method. C. &he $isual-fit method. . Account anal'sis. %. Multiple regression. Answer( B )*( &'pe( +C se the following to answer ;uestions 0-00(
@wanson and Associates presentl' leases a cop' machine under an agreement that calls for a fied fee each month and a charge for each cop' made. @wanson made 4<<< copies and paid a total of I2< in MarchH in Ma' the firm paid I,7< for <<< copies. &he compan' uses the high-low method to anal'ze costs.
0. @wanson6s $ariable cost per cop' is( A. I<.<0<.
B. I<.<1. C. I<.<. . I<.<2.
%. an amount other than those gi$en abo$e. Answer( A )*( &'pe( A
00. @wanson6s monthl' fied fee is( A. I7<.
B. I1<,. C. I1<2. . I11,.
%. an amount other than those gi$en abo$e. Answer( A )*( &'pe( A
se the following to answer ;uestions 0-04(
Atlanta !nc. which uses the high-low method to anal'ze cost beha$ior has determined that machine hours best eplain the compan'6s utilities cost. &he compan'6s rele$ant range of acti$it' $aries from a low of 2<< machine hours to a high of 11<< machine hours with the following data being a$ailable for the first si months of the 'ear(
Month tilities Machine Dours
Eanuar' I74<< 7<<
=ebruar' 72< 4,<
March 7:< 71<
April :2< :,<
Eune :1< :<< 0. &he $ariable utilities cost per machine hour is(
A. I<.17. B. I0.<. C. I.<<. . I.<.
%. an amount other than those listed abo$e. Answer( )*( &'pe( A
02. &he fied utilities cost per month is( A. I420.
B. I00<<. C. I042<. . I1<<.
%. an amount other than those listed abo$e. Answer( B )*( &'pe( A
04. sing the high-low method the utilities cost associated with :7< machine hours would be(
A. I:1<. B. I:22<. C. I:4<<. . I:4:<.
%. an amount other than those listed abo$e. Answer( )*( &'pe( A
07. Ditchcoc# !nc. uses the high-low method to anal'ze cost beha$ior. &he compan' obser$ed that at 1,<<< machine hours of acti$it' total maintenance costs a$eraged I4.<< per hour. When acti$it' 5umped to 1<<< machine hours which was still within the rele$ant range the a$erage cost per machine hour totaled I2.0<. *n the basis of this information the $ariable cost per machine hour was(
A. I0.<<. B. I2.0<. C. I2.4<. . I4.<<.
%. an amount other than those listed abo$e. Answer( A )*( &'pe( A
0:. 3orthridge !nc. uses the high-low method to anal'ze cost beha$ior. &he compan' obser$ed that at ,<<<< machine hours of acti$it' total maintenance costs a$eraged I1<.< per hour. When acti$it' 5umped to ,0<<< machine hours which was still within the rele$ant range the a$erage cost per machine hour totaled I:.4. *n the basis of this information the compan'6s fied maintenance costs were(
A. I,0<<<. B. I:<<<<. C. I,1<<<. . I ,0 << <.
%. an amount other than those listed abo$e.
Answer( B )*( &'pe( A
<. &he following data relate to the Dodges Compan' for Ma' and August of the current 'ear(
Ma' August
Maintenance hours 1<<<< 1,<<< Maintenance cost I,2<<<< I<<<<<
Ma' and August were the lowest and highest acti$it' le$els and Dodges uses the high-low method to anal'ze cost beha$ior. Which of the following statements is true? A. &he $ariable maintenance cost is I, per hour.
B. &he $ariable maintenance cost is I,.< per hour. C. &he $ariable maintenance cost is I,2 per hour. . &he fied maintenance cost is I2<<<< per month. %. More than one of the abo$e statements is true. Answer( )*( &'pe( A
se the following to answer ;uestions 1-(
ang Manufacturing which uses the high-low method ma#es a product called in. &he compan' incurs three different cost t'pes 8A B and C9 and has a rele$ant range of operation between ,<< units and 1<<<< units per month. /er-unit costs at two different acti$it' le$els
for each cost t'pe are presented below.
&'pe A &'pe B &'pe C &otal
<<<units I0 I: I0 I14
4<<units I0 I2 I I1
1. &he cost t'pes shown abo$e are identified b' beha$ior as(
&'pe A &'pe B &'pe C
A. =ied ariable @emi$ariable
B. =ied @emi$ariable ariable
C. ariable @emi$ariable =ied
. ariable =ied @emi$ariable
%. @emi$ariable ariable =ied
Answer( )*( , &'pe( A 3
,. !f ang produces 1<<<< units the total cost would be( A. I:<<<<.
B . I1<<<<<. C . I 11 < <<< . . I 1, << <.
%. an amount other than those gi$en abo$e. Answer( C )*( &'pe( A
. &he cost formula that epresses the beha$ior of ang6s total cost is( A . N I< K I 14 O.
B. N I,<<<< K I1O. C. N I0<<<< K I:O. . N I0<<< K I0O.
