ACC T4 Quiz

As the volume of activity changes, a(n) __________ cost remains constant in total.

As the volume of activity changes, a(n) fixed cost remains constant in total.

Cost behavior implies that people accountable for costs would react negatively to increases in the cost. True False

False

In managerial accounting, the term _________ means different things depending on the situation.

In managerial accounting, the term cost means different things depending on the situation.

In the planning and control cycle, feedback is obtained by comparing planned activity with _____________ results.

In the planning and control cycle, feedback is obtained by comparing planned activity with actual results.

Which of the following are considered variable costs? (Check all that apply.) Advertising expenses Sales commissions Maintenance materials Depreciation expense

Sales commissions Maintenance materials

In managerial accounting, control is achieved by: comparing planned activity to actual performance results reporting the financial performance of the organization developing company policy manuals directly supervising every subordinate employee

comparing planned activity to actual performance results

An analytical technique that determines the impact on profit of volume and cost changes using knowledge about the behavior pattern of the costs involved is known as ______. managerial analysis financial analysis differential analysis cost-volume-profit analysis

cost-volume-profit analysis

The management activity that occurs in each phase of the planning and control cycle is: controlling decision making managing planning

decision making

_______________ accounting provides information to support an organization's planning, control and decision-making needs.

managerial

_________________ accountants work extensively with their colleagues in many functional areas of the organization to support the organization's planning, control, and decision-making activities.

managerial accountants work extensively with their colleagues in many functional areas of the organization to support the organization's planning, control, and decision-making activities.

_____________ accounting is focused on the future, whereas ____________ accounting is focused on the past.

managerial accounting is focused on the future, whereas financial accounting is focused on the past.

Managerial accounting supports the management process least significantly by: planning the goals and objectives of the entity. measuring and reporting financial results after the fact. helping management identify and measure the degree to which the goals have been accomplished. establishing budget practices to be followed during a period of time.

measuring and reporting financial results after the fact.

The logical sequence of the activities performed in the management planning and control cycle is: managing, planning, controlling controlling, managing, planning planning, controlling, managing planning, managing, controlling

planning, managing, controlling

As the volume of activity increases, fixed costs: decrease in total increase in total remain constant in total

remain constant in total

Expressing a fixed cost on a per unit basis of activity is misleading because: the fixed cost per unit decreases as the activity increases the fixed cost per unit increases as the activity increases the total fixed cost increases as the activity increases the total fixed cost decreases as the activity decreases

the fixed cost per unit decreases as the activity increases;'

Production labor wages are an example of a __________blank cost behavior pattern. fixed mixed variable semivariable

variable

If total cost is $12,000 and total fixed cost is $4,000, then: semivariable costs total $8,000 relevant costs total $8,000 variable costs total $8,000 mixed costs total $8,000

variable costs total $8,000

If the total cost is planned to be $12,000, the total fixed costs are $4,000, and the variable cost per unit of activity is $4, the total activity being planned for is ___________ units.

If the total cost is planned to be $12,000, the total fixed costs are $4,000, and the variable cost per unit of activity is $4, the total activity being planned for is 2,000 units.

In managerial accounting, planned activity is compared to actual performance results in order to ____________ the activities of the organization.

In managerial accounting, planned activity is compared to actual performance results in order to control the activities of the organization.

The relevant range assumption relating to fixed costs refers to: a firm's range of profitability a firm's range of rates of return a firm's range of sales a firm's range of activity

a firm's range of activity

The term to describe the concept that costs increase or decrease with changes in the volume of activity is known as: cost behavior cost classification cost avoidance cost incurrence

cost behavior

Managerial accounting provides information for: preparing an organization's balance sheet generally accepted accounting principles publishing an organization's income statement planning, control, and decision-making

planning, control, and decision-making

A ______ can be used to forecast the total cost expected to be incurred at various levels of activity. variable cost semivariable cost fixed cost cost formula

cost formula

Another term used to describe a semivariable cost behavior pattern is: indirect cost controllable cost mixed cost sunk cost

mixed cost

Managerial accounting in contrast to financial accounting: supports internal planning decisions is focused on the past performs a scorekeeping function is focused on the future

supports internal planning decisions is focused on the future

The management process is illustrated through a series of key management activities referred to as: the bookkeeping process the planning and control cycle financial statement preparation transaction analysis

the planning and control cycle

A cost behavior pattern describes the relationship of total cost to volume of ___________.

A cost behavior pattern describes the relationship of total cost to volume of activity.

As the volume of activity changes, a(n) __________ cost changes when expressed on a per unit basis.

As the volume of activity changes, a(n) fixed cost changes when expressed on a per unit basis.

Some costs include elements that are both fixed and variable. Costs that have this type of mixed behavior pattern are known as _______________ costs.

Some costs include elements that are both fixed and variable. Costs that have this type of mixed behavior pattern are known as semivariable costs.

Which of the following are considered fixed costs? (Check all that apply.) Housekeeping materials Supervisory salaries Raw materials Sales commissions

Supervisory salaries

Using the high-low method produces a cost formula for expressing the total of a mixed cost at any level of activity, which is: Total cost = Fixed cost x Volume of activity Total cost = Fixed cost + Variable cost Total cost = Fixed cost x Variable rate Total cost = Fixed cost - Variable cost

Total cost = Fixed cost + Variable cost

The concept of different costs for different purposes means that costs must be viewed differently depending on the planning, control, or decision-making situation. True False

True

As the volume of activity changes, a(n) ______________ cost changes in total.

As the volume of activity changes, a(n) variable cost changes in total.

For a cost formula to forecast the total of fixed costs and variable costs expected to be incurred, it must be based on a specific level of ___________.

For a cost formula to forecast the total of fixed costs and variable costs expected to be incurred, it must be based on a specific level of activity.

As the volume of activity increases, fixed costs __ when expressed on a per unit basis. remain constant decrease increase

decrease

Managerial accounting helps support what kind of planning decisions made by an entity's management? External forward-looking decisions External present-day decisions Internal present-day decisions Internal forward-looking decisions

Internal forward-looking decisions

The simplifying assumption made when using variable cost behavior pattern data is: liquidity linearity semivariability variability

linearity

Which of the following elements are included in the contribution margin income statement format? Operating expenses Gross profit Cost of goods sold Variable expenses Fixed expenses Operating income Revenues

Variable expenses Fixed expenses Operating income Revenues

Which are true statements about cost-volume-profit (CVP) analysis? It is an analytical technique that explains the impact on profit for any changes in revenues, costs, or the volume of activity. It is an analytical technique that explains the impact on profit for any changes in current assets or current liabilities. It is useful for preparing financial statements as it emphasizes the recording of the historical cost of various assets and expenses. It is useful for planning and for evaluating the results of actual operations as it emphasizes the cost behavior pattern of various costs.

It is an analytical technique that explains the impact on profit for any changes in revenues, costs, or the volume of activity. It is useful for planning and for evaluating the results of actual operations as it emphasizes the cost behavior pattern of various costs.

The high-low method of analyzing the cost behavior of a mixed cost uses a(n) ______________ to illustrate cost and volume data relationships.

The high-low method of analyzing the cost behavior of a mixed cost uses a(n) scattergram to illustrate cost and volume data relationships.

The linearity assumption suggests that the cost behavior pattern will graph as a straight line within the __________ __________.

The linearity assumption suggests that the cost behavior pattern will graph as a straight line within the relevant range.

The relevant range assumption is about the level of production ______________ and suggests that the level of fixed costs will remain constant only within certain ranges of activity.

The relevant range assumption is about the level of production capacity and suggests that the level of fixed costs will remain constant only within certain ranges of activity.

When analyzing fixed costs, a fundamental assumption about the range of activity over which the fixed cost behavior pattern exists is known as the ____________ ______________ assumption.

When analyzing fixed costs, a fundamental assumption about the range of activity over which the fixed cost behavior pattern exists is known as the relevant range assumption.

When analyzing variable costs, it is assumed that cost behavior pattern is ____________, but in reality, because of other factors such as economies of scale and quantity purchase discount, per unit variable costs will typically change slightly.

When analyzing variable costs, it is assumed that cost behavior pattern is linear, but in reality, because of other factors such as economies of scale and quantity purchase discount, per unit variable costs will typically change slightly.

When classifying costs for managerial accounting purposes, it is important to recognize that each cost must be viewed _____________ for each planning, control, or decision-making situation. historically consistently accurately differently

differently

Simplifying assumptions identified for the use of cost behavior pattern data include: relevant range and liquidity. fixed activity and linearity. linearity and relevant range. fixed range and variability.

linearity and relevant range.

Which of the following best describes the management process? The process of steering an organization's activities to best support its goals The process of training and deploying human capital most efficiently The process of disseminating information throughout an organization The process of reviewing past performance to ensure an organization's future success

The process of steering an organization's activities to best support its goals

The need for management accountants to have a breadth of knowledge and interest about the organization and its operating environment in order to support planning, control, and decision making also suggests: management accountants will exercise control over people in other functional areas of the organization people in other functional areas of the organization should have a general understanding of managerial accounting management accountants are required to also have an MBA

people in other functional areas of the organization should have a general understanding of managerial accounting