Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Management Accounting > In class test MCQs > Flashcards

In class test MCQs Flashcards

1
Q

Cost of Goods sold

A

Beginning inventory + purchases - Ending inventory

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Is it possible for a cost to be a direct cost of one cost object and an indirect cost of another

A

True

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Sunk cost

A

Past resources payments that can’t be changed by any current or future decision

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Cost of goods manufactured

A

Direct materials used + Direct Labour + overhead + beg. inv. of work in progress - ending inventory of work in progress

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Idle time caused by equipment breakdown should be accounted for as

A

A manufacturing overhead cost

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What type of cost is rent?

A

Fixed cost

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What type of costs are factory heating and A/C

A

Product cost

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What type of cost is maintenance on factory equipment?

A

Indirect product cost

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What is X in TC =F + VX

A

x is the cost driver

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Which method of cost estimation doesnt use the company record as its primary source of cost activity data?

A

Engineering estimates

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Account analysis approach to cost estimation

A

Accounting personal must have adequate experience and good judgement

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

A salesperson with a flat salary and commission on all sales is what type of cost?

A

Mixed cost

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Which of the following wouldn’t be a reason that a company would use cost estimation?

A

Determining how much to pay an employee

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Traditional cost accounting can be effective if the level of indirect costs is low relative to the level of direct costs and if the accuracy of the cost information isnt critical to the company’s success

A

True

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Implementing an activity based costing system is relatively expensive

A

true

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

A company may benefit from Activity based costing if :

A

goods and services are complex and require many different processes or inputs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

A cost driver base should be based on the resources practical capacity to support activities

A

true

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

What does customer profitability analysis help management do

A

helps them see the overall financial picture for each customer and management can use this info to establish a strategic plan for coming periods

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Example of value added activity

A

Making customer contacts and sales

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

An activity is value added if

A

an external customer would encourage the organisation to do more of that activity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

An organisation that performs lots of value added activities will be

A

more likely to achieve its goal (by performing these activities)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Activity based management

A

evaluates the costs and values of process activities to identify opportunities for improved efficiency

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Target cost is

A

the highest cost of good or service that meets both customer needs and company profit goals

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

eliminating non value added activities without redesigning processes

A

is unlikely to result in long term benefits

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

Contribution margin is

A

defined as total sales revenue minus total variable costs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

Break even analysis assumes that

A

Unit variable cost is constant

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

Contribution margin at breakeven

A

equals total fixed costs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

Breakeven formula

A

Fixed costs / contribution per unit

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

If demand exceeds practical capacity

A

the process is a bottleneck

30
Q

An increase in building insurance will result in an

A

increase in the breakeven point

31
Q

Contribution margin per unit

A

Sales price - variable cost

32
Q

Ending balance =

A

Beginning balance + Transfers in - Transfers out

33
Q

overhead variance is the

A

difference between the actual overhead spending and applied overhead

34
Q

cost of goods sold account records the cost of

A

finished jobs that have been sold during the period

35
Q

throughput product cost of goods sold is

A

material cost / units produced

36
Q

gross margin ratio

A

(sales turnover-cost of sales) / sales turnover

37
Q

operating income

A

gross margin - period expenses

38
Q

return on sales ratio

A

operating income / sales

39
Q

Basic CVP model

A

Revenue = Variable costs + Fixed costs + Income

40
Q

target income

A

fixed expenses + target income / unit contribution margin

41
Q

job costing

A

distinctive products
high value unit
costs traced back to units

42
Q

process costing

A

homogenous products
low value unit
costs traced back to process

43
Q

POHR

A

budgeted total units in allocation base for coming year

44
Q

overhead applied

A

POHR * actual activity

45
Q

under applied overhead

A

actual > applied

46
Q

over applied overhead

A

applied > actual

47
Q

absorption costing

A

direct material, direct labour
variable manufacturing overhead
fixed manufacturing overhead

48
Q

variable costing

A

direct material, direct labour

variable manufacturing overhead

49
Q

life cycle costing tracks

A

costs attributable to each product/service from start to finish

50
Q

High low method VC

A

change in cost / change in activity

51
Q

Does fixed cost per unit increase as activity increases?

A

No, fixed cost per unit decreases as activity increases

52
Q

Overtime premium costs are

A

NOT part of direct labour

53
Q

Does fixed costs affect contribution margin?

A

NO, the formula is sales price - variable cost

54
Q

when setting prices for products/services

A

a business DOESN’T have complete freedom

55
Q

When a company has scarce resources

A

they SHOULDNT allocate it to the product with the highest contribution margin per unit

56
Q

What isn’t a step in ABM

A

calculating a cost driver for each activity

57
Q

Does ABM have a goal to eliminate all non value added activities ?

A

no

58
Q

what isnt a step in ABC?

A

classifying costs into fixed and variable cost behaviour

59
Q

What is Acitivity Based Costing?

A

a method that identifies activities performed in a company and calculates a cost driver rate

60
Q

What is Activity Based Management?

A

Extension to ABC , identifies activities as VA/NVA and scores each activity

61
Q

ABC steps (4)

A

1) identify and classify activities
2) estimate cost
3) calculate cost driver rate
4) assign costs to products using cost driver rate

62
Q

ABM steps (3)

A

5) identify activities as VA/NVA
6) score each activity as high/low
7) identify opportunities to enhance VA and reduce NVA

63
Q

multiple regression

A

has more than one independent variable

64
Q

if a company changes from selling high margin products to low margin products

A

break even will increase

65
Q

work in process inventory represents the cost of all incomplete active jobs

A

true

66
Q

implementing ABC is

A

expensive

67
Q

can all costs be divided into variable and fixed ?

A

no

68
Q

is transporting workers to work sites a value added activity?

A

no

69
Q

cost of setting up molding machines is

A

batch level activity

70
Q

as volume of production increases what happens to variable and fixed costs?

A

variable costs per unit stay the same, fixed cost per unit decreases

Management Accounting (5 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions