ACCT 2101 Exam 1

For the year, Red Company has cost of goods manufactured of $600,000, beginning finished goods inventory of $200,000, and ending finished goods inventory of $250,000. The cost of goods sold is:

$550,000

The cost accounting system provides data ______. Multiple select question. used only for financial accounting purposes that is part of the organization's overall accounting system used only in managerial reporting used in both managerial and financial reporting about the costs of producing goods and services

-that is part of the organization's overall accounting system -used in both managerial and financial reporting -about the costs of producing goods and services

indirect cost

A cost than cannot be traced to a particular department (e.g., at Walt Disney, cost of national advertising)

uncontrollable cost

A cost that a manager cannot control (e.g., manager of a branch of the Alamo Car Rental Company, cannot do anything to control national advertising costs)

controllable cost

A cost that can be controlled by managerial action (e.g., raw material costs can be controlled by purchasing manager purchasing more or less material)

direct cost

A cost that can be traced to a particular department (e.g., at Toyota, paint can be traced to paint department)

Managerial accounting information often assists management through its ______-_______ function.

Answer: attention directing

One means of motivating managers and other employees to direct their efforts towards achieving the organization's goals is by the preparation of a(n)

Answer: budget

The upper limit on the quantity of goods or services that can be produced in a given time period is called the organization's ____________.

Answer: capacity

Comparing actual data to budgeted data is an example of a(n) _______ activity.

Answer: controlling or control

Data about the costs of producing the company's outputs is accumulated in the ________ accounting system.

Answer: cost

Broadly defined, the correlation between costs and cost drivers is referred to as a(n) ______ ______

Answer: cost relationship

​​Making sure that big data is valid and usable is called _______ _______.

Answer: data governance

Choosing among available alternatives is called ______ ______.

Answer: decision making

The four activities of the management team involve planning, directing operational activities, controlling and _______ _______.

Answer: decision making DPDC

The balanced scorecard uses both _________ and _________ performance measures.

Answer: financial, nonfinancial

Preparation of a budget is part of the ______ activity.

Answer: planning

A set of linked, value-creating activities is called a(n)

Answer: value chain

If we rent a moving van for $100 per day, plus $.50 per mile, what is the cost driver? A.Total cost B.Miles driven C.Number of items being moved D.Days rented

B.Miles driven C.Number of items being moved D.Days rented

Cost of Goods Sold Equation (COGS)

Beginning Finished Goods Inventory + Cost of Goods Manufactured - Ending Finished Goods Inventory

Cost of Goods Manufactured Equation (COGM)

Beginning Work-In-Process Inventory (WIP) + Total Manufactured Costs (MC) - Ending Work-in-Process (WIP) *Total MC = DM + DL + OH

Improving product delivery timing best fits which of the following balanced scorecard performance measurement categories? A.Financial B.Customer C.Internal Operations D.Innovation and Learning E.None of the above

C.Internal Operations

Internal Auditor

Checks the work of accountants and finance personnel (e.g., review procedures, check accuracy of records).

Financial accounting information focuses on which of the following users? Multiple select question. Consumers Stockholders Managers Unions Investors

Consumers Stockholders Unions Investors

variable cost

Costs increase as quantity produced (or cost driver) increases

Which of the following statements are true regarding a value chain? Multiple select question. Customers must be willing to pay the cost of value chain activities plus profit or the company will fail. Companies define their value chains in different ways. Value creating activities can be provided by suppliers. Value creating activities can only be provided by the organization itself.

Customers must be willing to pay the cost of value chain activities plus profit or the company will fail. Companies define their value chains in different ways. Value creating activities can be provided by suppliers.

Which of the following equations is used to calculate the cost of goods sold during the period? A.Beginning finished goods + cost of goods manufactured + ending finished goods B.Beginning finished goods - ending finished goods C.Beginning finished goods + cost of goods manufactured D.Beginning finished goods + cost of goods manufactured - ending finished goods E.Beginning finished goods + ending finished goods - cost of goods manufactured

D.Beginning finished goods + cost of goods manufactured - ending finished goods

Direct Material/Raw Material (DM/RM) Used equation

DM/RM used = Beginning RM + RM Purchased - End RM

Which of the following is not an objective of managerial accounting? A.Providing information for decision making and planning B.Assisting in directing and controlling operations C.Motivating managers toward the organization's goals D.Measuring the performance of managers and subunits E.All of the above are objectives of managerial accounting

E. All of the above are objectives of managerial accounting

Which of the following is a product cost? A.Glass in an automobile B.Advertising C.The salary of the vice president-finance D.Rent on the manufacturing factory E.Both A and D

E.Both A and D

True or false: In order for a company to achieve a sustainable competitive advantage, it must perform its value chain activities at a higher quality and lower cost than competitors. True false question. True False

False

True or false: There is a strong trend towards replacing financial data with nonfinancial data in managerial accounting systems. True false question. True Reason: There is a strong trend towards the presentation of both financial and nonfinancial data. False

False

What type of accounting is used to gather information in pursuit of an organization's goals? Multiple choice question. Cost Reason: Cost accounting is the identifying of costs incurred to achieve a particular goal Regular Reason: This is not a type of accounting Managerial Financial Reason: Financial accounting provides information for external users.

Managerial

What types of organizations use managerial accounting information? Multiple choice question. Manufacturing entities only Retail entities only Profit seeking enterprises only Profit seeking & nonprofit enterprises

Profit seeking & nonprofit enterprises

Even if the balance sheet for a manufacturing company shows only one category of "inventory," this amount is really a total of three types of inventory:

Raw materials inventory Work-in-process inventory Finished goods inventory

Chief Financial Officer (CFO)

Responsible for all accounting and finance operations. All accountants and finance personnel report to this individual.

Treasurer

Responsible for raising capital (selling shares, issuing debt).

Controller

Responsible for the company's financial statements and its accounting system.

True or false: Decision making involves choosing among available alternatives. True False

True

Contemporary managerial accounting systems are focusing more and more on ______. Multiple choice question. activities that occur at all levels of the organization presenting financial data to managers Reason: Although financial data make up a large part, there is a strong trend towards the presentation of nonfinancial data. replacing financial data with nonfinancial data Reason: Both financial and nonfinancial data are important components of managerial accounting systems. providing information the the organization's creditors and stockholders Reason: These are users of financial accounting information.

activities that occur at all levels of the organization

Managerial accounting information is vital in ______. Multiple choice question. all organizations that pursue certain types of activities profit-seeking enterprises only nonprofit enterprises only all types of organizations

all types of organizations

cost driver

an activity that causes a cost to be incurred (e.g., cost of assembly labor caused by the quantity of products manufactured)

sunk costs

are costs that have been incurred in the past. Consequently, they do not affect future costs and cannot be changed by any current or future action.

The upper limit on the quantity of goods or services that can be produced in a given time period is called the organization's ______. Multiple choice question. resources used resources supplied value chain capacity

capacity

Determining if the company is operating in accordance with the developed plans and in the intended manner to achieve its goals is __. Multiple choice question. directing operational activities This is running the organization on a day-to-day basis. planning This is developing detailed financial and operational descriptions of anticipated operations. decision making This is choosing among alternatives. controlling

controlling

Cost-causing factors are called ______. Multiple choice question. product costs cost relationships direct costs cost drivers

cost drivers

An objective of managerial accounting is providing information for ______. Multiple choice question. for competitors Reason: This is not an objective of any organization. governmental agencies, such as the IRS Reason: This is a financial accounting objective. creditors and investors Reason: This is a financial accounting objective. decision making and planning

decision making and planning

The day-to-day work activities of the management team are ______. Multiple choice question. decision making, buying assets, hiring decision making, planning, directing operational activities, controlling making the best use of an organization's resources, firing people, meeting with potential investors funding, acquiring assets, hiring, controlling

decision making, planning, directing operational activities, controlling

Controlling is __. Multiple choice question. determining if the company is operating in accordance with the developed plans and in the intended manner to achieve its goals choosing among alternatives This is decision making. running the organization on a day-to-day basis This is directing operational activities. developing detailed financial and operational descriptions of anticipated operations This is planning.

determining if the company is operating in accordance with the developed plans and in the intended manner to achieve its goals

The components of the planning process are ______. Multiple choice question. developing detailed financial and operational descriptions of anticipated operations developing a cost structure and implementing that cost structure developing detailed financial and operational plans and implementing those plans choosing an alternative and ensuring that alternative is implemented

developing detailed financial and operational descriptions of anticipated operations

Running an organization on a day-to-day basis is ______. Multiple choice question. planning for anticipated operations Reason: This is developing financial and operational descriptions of anticipated operations. decision making Reason: This is choosing among alternatives. controlling Reason: This is ensuring the organization operates in the intended manner and achieves its goals. directing operational activities

directing operational activities

Managerial accounting measures the performance of ______. Multiple select question. employees departments investors Reason: managerial accounting measures internal performance creditors Reason: managerial accounting measures internal performance product lines

employees, departments and product lines

Most of the purely accounting issues in ethical scandals involve ______ accounting. Multiple choice question. financial both financial and managerial managerial Reason: While the scandals are generally related to financial accounting, many of the same individual are involved in both types of accounting.

financial

Managerial accounting ______. is used for external reporting helps managers achieve the organization's goals is only used by top management provides no value to the management team

helps managers achieve the organization's goals

A balanced scorecard ______. Multiple choice question. is a term for the combination of the income statement and balance sheet includes both financial and nonfinancial performance measures is another term for an organization's budget is another term for an organization's planning process

includes both financial and nonfinancial performance measures

When assessing an organization's competitiveness, managers are concerned with ______. Multiple choice question. financial viability, motivating, customer opinions motivating, innovation, financial viability customer opinions, financial viability, planning innovation, customer opinions, financial viability

innovation, customer opinions, financial viability

An important role in a company's data governance is played by ______ accounting. Multiple choice question. managerial both managerial and financial financial

managerial

The process of identifying, measuring, analyzing, interpreting, and communicating information in pursuit of an organization's goals is __________ accounting.

managerial

Tools and perspectives to help managers achieve their organization's goals are provided by _________ accounting.

managerial

In order for a company to achieve a sustainable competitive advantage, it may perform ______. Multiple select question. one or more value chain activities at the same quality as competitors, but at a lower cost its value chain activities at a higher quality level than competitors, at no greater cost one or more value chain activities at higher quality and cost than competitors one or more value chain activities at a significantly lower cost coupled with lower quality

one or more value chain activities at the same quality as competitors, but at a lower cost its value chain activities at a higher quality level than competitors, at no greater cost

When managers consider factors such as equipment downtime, employee fatigue and unexpected interruptions, they are determining ______ capacity. actual practical theoretical resource

practical

Management accountants are responsible for ______. providing information for decision making day to day operation of the business the supervision of production making marketing decisions

providing information for decision making

The cost of unused capacity is the same as the cost of ______. Multiple choice question. used plus unused resources resources supplied but unused resources supplied plus resources unused the difference between theoretical and practical capacity

resources supplied but unused

Directing operational activities means ______. Multiple choice question. ensuring the organization operates in the intended manner and achieves its goals Reason: Although this may be involved in directing day-to-day operations, this is controlling only. Directing operational activities involves more than just controlling. developing financial and operational descriptions of anticipated operations Reason: This is planning. choosing among alternatives Reason: Although this may be involved in directing day-to-day operations, this is decision making only. Directing operational activities involves more than just decision making. running the organization on a daily basis

running the organization on a daily basis

The overall recognition of the importance of cost relationships among the activities in the value chain, and the process of managing those relationships to the firm's advantage is called ______ ________ management.

strategic cost

The Sarbanes-Oxley Act was passed by Congress as a result of ______. Multiple choice question. the Enron scandal the high cost of corporate financial reporting pressure from Arthur Anderson and other accounting firms

the Enron scandal

The upper limit on production of goods and services if everything works perfectly is called ______ capacity. Multiple choice question. resource theoretical practical actual

theoretical

The focus of managerial accounting is on the needs of ______. Multiple choice question. users inside the organization governmental agencies interested parties outside the organization the organization's competitors

users inside the organization

opportunity cost

whatever must be given up to obtain some item