Test 1

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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


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