Accounting Chapter 15 quiz

Managerial accounting reports must be prepared according to generally accepted accounting principles.

False

A product cost is

expensed in the period the product is sold

Horizontals are departments within a company that are responsible for developing products.

False

Which of the following terms is used to describe the process of developing the organization's objectives and translating those into courses of action?

Planning

Which of the following must be true in order for materials to be classified as direct materials?

They must be an integral part of the finished product and be a significant portion of the total product cost.

A cost is a sacrifice made to obtain some benefit.

True

A diagram of the operating structure of an organization is called an organization chart.

True

Although finance and accounting professionals often work within verticals and other horizontals, they do not normally report directly to the heads of those units or departments.

True

Controlling is the process of monitoring operating results and comparing actual results with the expected results.

True

Conversion cost is the combination of direct labor cost and factory overhead cost.

True

Managerial accounting information includes both historical and estimated data.

True

Planning is the process of developing the company's objectives or goals and translating these objectives into courses of action.

True

The cost of a manufactured product generally consists of direct materials cost, direct labor cost, and factory overhead cost.

True

In order to be useful to managers, managerial accounting reports should possess all of the following characteristics except

be prepared in accordance with generally accepted accounting principles

Which of the following terms is used to describe the process of monitoring operating results and comparing actual results with the expected results?

controlling

Which of the following costs are conversion costs?

direct labor cost and factory overhead cost

The cost of a manufactured product generally consists of which of the following costs?

direct labor cost, direct materials cost, and factory overhead cost

Prime costs are

direct materials and direct labor

Indirect labor and indirect materials are classified as

factory overhead and product costs

A plant manager's salary is a(n)

indirect cost

Accounting designed to meet the needs of decision makers inside the business is

managerial accounting

Which of the following is most associated with managerial accounting?

may rely on estimates and forecasts

Period costs include

operating costs that are shown on the income statement in the period in which they are incurred

Which of the following are basic phases of the management process?

planning and controlling

Which of the following is most associated with financial accounting reports?

prepared in accordance with GAAP