Exam 1 Flashcards
Financial accounting is most concerned with meeting the needs of internal users (T or F)
False
Cost accounting serves as a bridge between financial and managerial accounting (T or F)
True
The expression of what an organization wishes to accomplish and how it will serve its customers is contained in the ________.
Mission statement
Core competencies are…
different for every organization, internal functions crucial to the success and survival of a company, and considered influences on corporate strategies.
The set of processes that convert inputs into services and products that consumers use is called…
the value chain.
The value chain…
is the foundation of strategic resource management.
The learning and growth perspective of the balanced scorecard focuses on using an organization’s intellectual capital to adapt to or influence customer needs and expectations (T or F)
True
The balanced scorecard perspective that addresses concerns about organizational growth is the…
financial perspective
The ethical standards established for management accountants are in the areas of…
competence, confidentiality, integrity, and credibility.
What ethical structure has been violated if an accountant fails to prepare financial statements according to industry standards?
competence
A cost object is anything for which management wants to collect or accumulate (T or F)
True
The term “relevant range” as used in cost accounting means the range over which…
cost relationships are valid.
When cost relationships are linear, total variable prime costs will vary in proportion to changes in…
production volume.
An example of a fixed cost is
straight-line depreciation.
The portion of an asset’s value on the balance sheet is referred to as an expired cost (T or F)
False
When the number of units manufactured increases, the most significant change in unit cost will be reflected as a(n)
decrease in the fixed element
Product costs are deducted from revenue…
as goods are sold
Product cost components include…
indirect production labor wages, rent on a factory building, and janitorial supplies used in a factory
The indirect costs of converting raw material into finished goods are called
overhead costs
In an actual cost system, overhead is assigned to Work in Process Inventory with a debit entry to the account (T or F)
True
Absorption costing is commonly used for external reporting (T or F)
True
In an actual cost system, factory overhead is assigned directly to products and services (T or F)
True
If overapplied factory overhead is material, the account is closed by a credit to Cost of Goods Sold (T or F)
False
Normal capacity considers a present and future production levels and cyclical fluctuations (T or F)
True
Since overhead costs are indirect costs,
they require some process of allocation.
When a manufacturing company has a highly automated manufacturing plant producing many different products, which of the following is the more appropriate basis of applying manufacturing overhead costs to work in process?
machine hours
In the formula y=a +bX, a represents
fixed cost
An outlier is
typically not used in analyzing a mixed cost.
Overapplied overhead will result if
overhead costs incurred were less than overhead costs charged to production.
In a normal cost system, factory overhead is assigned to an overhead control account and then allocated to products and services (T or F)
True
The first step in performing activity analysis is to prepare a process map (T or F)
True
The sum of the non-value-added time and the value-added time equals
cycle time
Which of the following adds customer value?
processing time
Lead time in a production process includes both value and non-value added time.
True
For one product that a firm produces, the manufacturing cycle efficiency is 20 percent. If the total production time is 12 hours, what is the total manufacturing time?
60 hours
Which of the following is typically regarded as a cost driver in traditional accounting practices?
number of direct hours worked
Costs that are common to many different activities within an organization are known as _____ costs.
organizational-level
In activity-based costing, preliminary cost allocations assign costs to
activities
An activity center is an organizational unit
for which management wants separate activity information
Product complexity refers to the number of processes through which a product flows (T or F)
False
