Chapter 9

Question 1

Good management accounting is motivated by
- Government regulators
- Accounting rules
- Management desire to improve
- All of these are correct

Answer 1

All of these are correct

Question 2

What is the definition of production planning?

Answer 2

How the production is going to be accomplished

Question 3

Operational planning

Answer 3

How the company is going to maximize its profits

Question 4

Operational planning

Answer 4

How the company is going to maximize its profits

Question 5

Strategic planning

Answer 5

How the company is going to place itself in the marketplace

Question 6

Capital budgeting

Answer 6

How the companies fixed assets are going to be acquired and maintained

Question 7

Variances which result from a comparison of actual performance against expected results will be used in which management function?
Planning
Controlling
Evaluating
None of these are correct

Answer 7

Evaluating

Question 8

Which of the following is not a function of management?
Analyzing
Regulating
Controlling
Planning

Answer 8

Regulating

Question 9

Determining the best use of financial resources is an aspect of:
Production prioritizing
Operational budgeting
Strategic planning
Capital Budgeting

Answer 9

Capital Budgeting

Question 10

With regards to particular company, which of the following groups generally has the whitest variety of decisions to make?
Investors
Creditors
Managers
Regulators

Answer 10

Managers

Question 11

Long run planning involves which one of the following processes?
Capital Budgeting
Variance comparison
Operational budgeting
Production prioritizing

Answer 11

Capital budgeting

Question 12

Assume that Lily company has total fix cost of $48,000 for the period. Each unit sells for $40. The variable cost per unit is $24. How many units must be sold to break even?
- 4000
- 2000
- 3000
- 1200

Answer 12

3000

$40 - $24 = $16
$48,000/$16 = 3000

Question 13

The zigzag company manufacturer zippers for mini clothing manufacturers. Cost for the year were direct materials $5000; indirect materials $1600; direct labor $12,000 and indirect labor $4000. Additional expenses for the year were factory utilities, 3500; depreciation of factory equipment, $1300; advertising expense $900; delivery expense on sales to customers 1700; and property taxes on factory buildings $5200. Which amount is the companies manufacturing overhead for the year?
- $15,600
- $$11,600
- $10,000
- $17,300

Answer 13

$15,600

$1600 plus $4000 plus $3500 plus $1300 plus $5200 equals $15,600

Question 14

rhododendron company offers yard maintenance services for residential clients. Cost for the year were direct labor $80,000 and indirect labor $5000. Additional expenses for the year were supplies 6000; depreciation of lawn, maintenance equipment $1000; advertising expense $500; receptionist pay Roehl $13,000; and fuel $2500. Which amount is Rhododendron total service cost?
- $14,500
- $80,000
- $11,000
- $94,500

Answer 14

$94,500

$5000 plus $6000 plus $1000 plus $2500 equals $14,500

Question 15

Zodiac companies total cost are the same at all levels of activity. The companies cost structure must have all:
- Sunk costs
- fixed costs
- Product costs
- variable costs

Answer 15

Fixed cost

Question 16

Which of the following cost should not be considered when making a future decision?
- Opportunity cost
- Fixed costs
- Indirect cost
- Sunk costs

Answer 16

Sunk costS

Question 17

Which of the following would not be included in manufacturing overhead?
- Factory utilities
- Factory fire insurance
- Direct labor
- Indirect materials

Answer 17

Direct labor

Question 18

The top accountant in most large organizations is usually:
- Controller
- chief executive officer
- Sales manager
- chief financial officer

Answer 18

Controller