Test 1
Which of the following would job costing NOT be appropriate?
A: Manufacturer of mass-produced carbonated beverages Appropriate for: - law firm -electrician -Manufacturer of custom-ordered production equipment
Which of the following is a calculated amount, rather than a general ledger account
A: costs of goods manufactured calculated general ledger accounts: finished goods inventory, sales revenue, cost of goods sold
Which of the following is NOT an activity in the value chain?
Administration Design, customer service, and marketing are activities in value chain
Which of the following documents specifies the materials needed to produce a job
Bill of materials
Calculate the cost of a product
Controller
Create an analysis about whether to lease or buy a delivery truck
Controller
Oversee accounts payable activities
Controller
Performing cash counts at branch offices
Controller
Prepares company tax returns
Controller
Preparing journal entries for month end closing
Controller
Work with various departments in preparing operating budgets for the upcoming year
Controller
Management conducts variance analysis by comparing budget to actual
Controlling
To lower product costs, management moves production to Mexico
Controlling Directing
Cost of a customer support center website
Customer service
Salary of engineers who are redisigning the printers on-off switch
Design
Management reviews hourly sales reports to determine the level of staffing needed to service customers
Directing
Management uses information on product costs to determine sales price
Directing
Depreciation on delivery vehicles
Distribution
Transportation costs to deliver laser printers to retailers such as Best Buy
Distribution
???? provides information on a company's past performance to external parties
Financial accounting
???? statements of public companies are audited annually by CPAs
Financial accounting
When a job is completed, the total cost of manufacturing the job should be moved to which of the following general ledger accounts?
Finished Goods Inventory
Which of the following organizations is the professional association for management accountants?
IMA
The first step in computing and using ABC is which of the following
Identifying the company's primary activities
Which of the following professional standards requires management accountants to mitigate conflicts of interest?
Integrity
Check to make sure that company risk management procedures are being followed
Internal Auditing Department
Ensure that the company's internal controls are functioning properly
Internal Auditing Department
Report to the audit committee of the board of directors and to a senior executive, such as the CFO or CEO
Internal Auditing Department
???? systems are not restricted by GAAP or IFRS but are chosen by comparing the costs versus the benefits of the system
Managerial accounting
???? systems report on various segments or business units of the company
Managerial accounting
???? are decision makers inside a company
Managers
Which of the following types of companies would carry raw materials, work in process, and finished goods inventory?
Manufacturing
Cost of a prime-time TV ad featuring the new HP logo
Marketing
Company president;s annual bonus
Period
Depreciation on Marketing Departments computers
Period
Gasolone used to operate refrigerated trucks delivering finished dairy products to grocery stores
Period
Research and development on improving milk pasteurization process
Period
Television advertisements for DairyPlains products
Period
Which of the following is NOT part of the manufacturing overheard?
Period costs, such as depreciation on office computers. What is mart of manufacturing overheard? - indirect materials, such as machine lubricants -indirect labor, such as forklift operator's wages - other indirect manufacturing costs, such as plant utilities
Management decides to increase sales growth by 10% next year
Planning
Wages and salaries paid to machine operators at dairy processing plant
Product- DL
Cost of milk purchased from local dairy farmers
Product- DM
Plastic gallon containers in which milk is packaged
Product- DM
Depreciation on refrigerated trucks used to collect raw milk from local dairy farmers
Product- MOH
Lubricants used in running bottling machines
Product- MOH
Property tax on dairy processing plant
Product- MOH
Depreciation on Roseville, CA plant
Production
Plant manager's salary
Production
Purchase of plastic used in printer casings
Production
Depreciation on research lab
Research and Developmnet
Which of the following requires the company's CEO and CFO to assume responsibility for the company's financial statements and disclosures?
Sarbanes-Oxley Act of 2002 (SOX)
Invest company funds
Treasurer
Issue company bonds
Treasurer
Issue company stock
Treasurer
Which of the following corporate positions is responsible for raising capital and investing funds?
Treasurer
Whenever direct material, direct labor, and manufacturing overhead are recorded on a job cost record, an associated entry is made to debit which of the following accounts?
Work in Process Inventory
Of the following skills, which are needed by today's management accountants?
all the above oral and written communication skills, knowledge of how a business functions, knowledge of both financial and managerial accounting
The amount of manufacturing overhead recorded on a job cost record for a particular job is found by
allocating manufacturing overhead to the job
Period costs are often referred to as
both selling, general, and administrative expense and operating expenses
Failing to read the specifications of the software package before purchasing it violates the ???? standard
competence
Skipping continuing education sessions could violate the requirement to maintain professional ???? Since your company paid for you to attend the conference, skipping the sessions also violates the ???? standard
competence integrity
Providing earnings information to your brother before it is publicly announced violates the ???? standard
confidentiality
When managers evaluate the company's performance compared to the plan, they are performing the ???? role of management
controlling
Failing to provide job description information to management because you fear it may be used to cut a position in your department violates the ???? standard
credibility
Financial accounting develops reports for external parties such as ??? and ????
creditors, shareholders
Cost distortion is more likely to occur when
departments incur different types of overheard and the products or jobs use the departments to a different extent
A cost that can be traced to a cost object is known as a
direct cost
Managerial accounting differs from financial accounting in that managerial accounting
emphasizes data relevance over data objectivity
Activities incurred regardless of how many units, batches, or products are produced are called ???? activities
facility-level
Job cost information is not useful for assessing the profitability of different products
false
Management accountants should be technically proficient, but they don't need strong oral and written communication skills
false
Management accounting is geared toward external stakeholders, such as investors and creditors
false
Sunk costs are generally relevant to decisions
false
TQM is a standardized coding system used to lag financial and business data so that it can be read by computer programs
false
The AICPA issues the CMA certification
false
The average cost per unit is valid for predicting total costs at many different output levels
false
Us companies must follow GAAp or IFRS in their ???? systems
financial accounting
Stealing from your employer is a violation of the ???? standard
integrity
Choosing goals and the means to achieve them is ??? function of management
planning
Which of the following management responsibilities often involves the use of budgets?
planning
A cost-plus price is determined by adding a markup to the cost
true
Direct costing focuses on only the direct costs found on the job cost record
true
Direct materials are considered to be variable costs
true
ERP systems integrate information from all company functions into a centralized data warehouse
true
Fixed costs stay constant in total over a wide range of activity levels
true
Globalization has increased the necessity for more detailed and accurate cost information
true
Lean operations is a philosophy and business strategy of operating without waste
true
Management accountants are now more often looked upon as internal business advisors, rather than 'bean counters' recording historical transactions
true
Management accountants often work in cross-functional teams throughout the organization
true
Management accountants should be proficient in Excel
true
Managers 3 primary responsibilities are planning, directing, and controlling
true
Manufacturing overhead is a mixture of fixed and variable costs
true
Non-manufacturing costs can be assigned to jobs only for internal decision making, never for external financial reporting
true
Sunk costs are costs that have already been incurred
true
The difference in cost between 2 alternatives is known as a differential cost
true
The internal audit function reports to the audit committee of the board of directors
true
Uncontrollable costs are costs over which the company has little or no control in the short run
true
Jobs will typically be either overcosted or undercosted. Is one worse than the other?
- Each sitiation has it's drawbacks -An indercosted job could lead to actual losses or lower profits than expected -An overcosted job could lead to higher pricing and becoming less competitive
Why do managers use a PREDETERMINED manufacturing overhead allocation rate rather than the actual rate to cost jobs?
- Managers use a predetermined manufacturing overhead rate so that they can get timely information on the cost of producing various jobs - Managers could only use an actual rate if the waited until the end of the year to obtain the actual total manufacturing overhead costs incurred, and the actual total quantity of the allocation base. Managers are willing to sacrifice some accuracy for the sake of timeliness