MS Theories

Which of the following is true?

Economic events are the raw data for both financial and managerial accounting. Some managerial accounting reports contain costs not incorporated in the basic accounting system. Generally accepted accounting principles govern financial accounting but not managerial accounting. All of the above.

A basic tenet of direct or variable costing is that fixed overhead should be currently expensed. What is the rationale behind this procedure?

Fixed overhead costs will occur whether or not the production occurs, it is improper to allocate these costs to production and defer the current costs of doing business

The variance most useful in evaluating plant utilization is the:

Fixed overhead volume variance

The usage of Management Accounting information is considered to be successful if

It assists managers in decision making

Which statement about the degree of detail in a report is not true?

It depends on the level of the accountant preparing the report.

Which activity is not normally performed by managerial accountants?

Maintaining the current level of resource utilization as well as internal and external communication

Which of the following statements is correct?

Net income will increase by the unit contribution margin for each additional unit sold once the break-even point has been reached.

Determine the correct statement

Product cost includes direct materials and cost of conversion

Which of the following is an example of a mixed cost?

Rental costs of P7,000 per month plus P0.10 per machine hour of use

The IMA Code of Ethics includes an objectivity standard which requires the management accountant to

Report any relevant information that could influence users of financial statements.

A difference between standard costs used for cost control and budgeted costs can exist because

Standard costs represent what costs should be while budgeted costs represent expected actual costs.

Cost-Volume-Profit analysis is most vital in determining

The relationship of revenue and cost of the firm at different levels of operation

Which of the following is false?

The sole role of Management accountant in the business is managing and controlling significant cost

The fundamental purpose of management advisory service is

To help improve the client's use of its resources to achieve its goals

Which of the following statements can be true?

Absorption costing net income does not exceed variable costing net income when units produced and sold are equal

A debit balance in the material usage variance indicates that the

Actual quantity used is higher than standard quantity allowed.

Under absorption costing, which of the following costs would not be included in finished goods inventory?

Advertising costs for a furniture manufacturer

Net profit under absorption costing may differ from net profit determined under variable costing. How is this difference computed?

Change in the quantity of all units in inventory times the relevant fixed costs per unit

Which of the following statements best describes the contribution approach to the income statement?

it is helpful to managers in planning, organizing and decision making

A favorable fixed overhead volume variance occurs if

production is greater than planned

Cost and management accounting

provide product and service cost information and other information for internal decision making

Which of the following statements is correct regarding management functions?

When carrying out their planning activities, managers select a course of action and specify how the action will be implemented. When carrying out controlling activities, managers rely on feedback to ensure that the plan is actually carried out and is appropriately modified as circumstances change. When carrying out their directing and motivating activities, managers mobilize the organization's human and other resources so that the organization's plans are carried out.

An increase in the activity level within the relevant range will result to

a decrease in fixed cost per unit

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

be prepared in compliance with generally accepted accounting principles

Which of the following statements best describes the margin of safety?

difference between forecasted sales and sales needed to break-even

The variance least significant for purposes of controlling costs is the

fixed overhead volume variance.

If a firm produces more units than it sells, absorption costing, relative to variable costing, will result in

higher income and assets

The cost associated with idle time should be

included as part of factory overhead

Which line separates the variable and fixed costs in the contribution income statement?

total contribution margin