Managerial Accounting Midterm 1-7

Question 1

What is a part of the controlling responsibility of management?

Answer 1

Evaluating operations by comparing actual results to budgeted results

Question 2

How often should managerial accounting reports be prepared?

Answer 2

as needed

Question 3

What responsibilities does a CFO have?

Answer 3

providing reports to creditors as required, managing corporate financing, managing the preparation of all corporate tax returns

Question 4

What are the IMA’s ethical principles?

Answer 4

Honesty, Fairness, Objectivity, and Responsibility

Question 5

What was not a result of the Sarbanes-Oxley Act?

Answer 5

The COO assumes financial statement responsibility

Question 6

Testing ways to increase the strength of your product would be classified as which of the following?

Answer 6

research and development

Question 7

What are period costs?

Answer 7

costs that are not generally tied to or related to the production of inventory; selling, general and administration expenses, marketing expenses, CEO salary and rent expense for office

Question 8

COGS

Answer 8

starting inventory + purchases - ending inventory

Question 9

Cost of Goods Manufactured

Answer 9

Beginning WIP + Total Manufacturing Cost - Ending WIP

Question 10

Operating Expenses

Answer 10

Sales commissions, rent for office, utilities for office

Question 11

Variable cost per unit

Answer 11

total variable cost/total units produced

Question 12

Total variable cost

Answer 12

Units produced x variable cost per unit

Question 13

Job Costing

Answer 13

More unique production ex: custom wood structures

Question 14

Beginning Raw Materials Inventory Balance

Answer 14

Ending balance of raw materials inventory + material requisitions - material purchase

Question 15

Overhead Rate

Answer 15

Manufacturing Overhead/Estimated direct labor cost = %

Question 16

Allocated manufacturing overhead costs

Answer 16

overhead rate x actual direct labor cost

Question 17

predetermined manufacturing overhead rate

Answer 17

estimated manufacturing rate/activity base (per direct labor hour)

Question 18

direct materials charged to the job

Answer 18

direct labor= MOH costs/allocation rate; overhead + direct labor + direct material = total cost

Question 19

Actual Gross Profit

Answer 19

allocated manufacturing overheads+actual manufacturing overheads = over applied manufacturing overheads;

Question 20

Prime Costs

Answer 20

total direct costs of production; raw materials and labor

Question 21

Determining if manufacturing overhead is over-allocated or under-allocated

Answer 21

Under-allocated=actual MOH > allocated MOH costs
Over-allocated=actual MOH < allocated MOH costs

Question 22

MOH

Answer 22

depreciation on factory equipment, factory administration expenses, equipment maintenance, factory employee benefits, quality control/inspection, rent for facility or lease costs for equipment, utilities

Question 23

How to calculate MOH allocation rate

Answer 23

total MOH/ total # of products sold or # of direct labor hours

Question 24

Predetermined overhead rate

Answer 24

budgeted MOH/budgeted DL cost

Question 25

Applied MOH

Answer 25

predetermined overhead rate x DL cost

Question 26

Overapplied/Underapplied MOH

Answer 26

applied MOH - actual MOH

Question 27

Do you debit to Finish Goods Inventory account when transferring sold goods?

Answer 27

Yes

Question 28

Under a perpetual inventory system, the journal entry needed to record the sale of a job includes a

Answer 28

debit to accounts receivable and credit to sales revenue

Question 29

Ending WIP Inventory

Answer 29

Beginning WIP Inventory + Manufacturing Costs - COGM

Question 30

Amount of allocated overhead w credit balance

Answer 30

MOH credit + actual costs

Question 31

Hourly cost

Answer 31

annual salary & benefits/ weeks x hours

Question 32

Pivot Tables

Answer 32

are not difficult and time consuming, do not provide valuable info

Question 33

"Value Field Settings"

Answer 33

displays count, average and sum but not the median

Question 34

What is the departmental overhead rate?

Answer 34

allocated towards specific departments based on activities they perform

Question 35

Is plantwide overhead cost allocation computed by dividing the total manufacturing overhead costs of the department by the estimated total quantity of the department's cost allocation base?

Answer 35

No

Question 36

Departmental overhead rate

Answer 36

estimated overhead for department/estimated activity for department

Question 37

Using a refined cost allocation system will allow the management team to allocate the manufacturing overhead costs more accurately because

Answer 37

cost distortion is lower because indirect costs are assigned equally

Question 38

ABC generally causes the least amount of cost distortion among products because indirect costs are allocated to the products based on

Answer 38

the extent to which the activities are used, types of activities used by the product

Question 39

Cost of materials per

Answer 39

allocation base x cost allocation rate

Question 40

Costs for departments ABC

Answer 40

cost of activity x # in department/allocation base

Question 41

Total manufacturing costs ABC

Answer 41

FOR ACTIVITY: material cost + materials (allocation base x cost allocation rate) + assembling (allocation base x cost allocation rate) + packaging (allocation base x cost allocation rate)

Question 42

Overhead cost per product

Answer 42

estimated overhead cost for activity/total then multiplied by expected activity; add together all activities then divide by # produced/sold

Question 43

Does lean thinking involve carrying large amount of inventory "just in case"?

Answer 43

No

Question 44

Internal failure costs

Answer 44

costs incurred when poor quality goods or services are detected and corrected before delivery to customers

Question 45

Is correlation an analytical tool to measure the relationship among at least 4 variables?

Answer 45

No

Question 46

Process Costing

Answer 46

used for mass production of standard goods not unique goods

Question 47

Are all direct materials added at the beginning of the production process with units 50% of the way through the production process, have a percentage of completion for direct materials of 100%?

Answer 47

yes

Question 48

Equivalent Units for Conversion Costs

Answer 48

WIP inventory x % complete for conversion + units completed and transferred out

Question 49

Is the last step of the 5 step process costing procedure to summarize the flow of physical units?

Answer 49

No

Question 50

Total equivalent units for direct materials

Answer 50

units completed and transferred out + ending WIP

Question 51

Total cost of units completed and transferred out

Answer 51

units completed and transferred out for material and conversion x cost per unit for material and conversion then add up totals for both material and conversion

Question 52

Cost per equivalent unit

Answer 52

cost of materials added/equivalent # of units

Question 53

Why is it important to calculate an equivalent unit cost?

Answer 53

the company must allocate both the direct material costs added at the beginning of production and the conversion costs to all units

Question 54

Mixed Cost

Answer 54

fixed cost with an added variable cost

Question 55

what does y represent: y= $7.20x+ $790

Answer 55

total cost

Question 56

Fixed cost per unit

Answer 56

total fixed cost/total number of units produced

Question 57

Is a high-low method theoretically better than regression analysis because the high-low method uses more data points than regression analysis?

Answer 57

No

Question 58

variable cost per unit for high-low method

Answer 58

highest activity cost - lowest activity cost/ highest activity units - lowest activity units

Question 59

fixed cost for high-low method

Answer 59

highest activity cost - (variable cost per unit x lowest activity units)

Question 60

high-low cost

Answer 60

fixed cost + (variable cost + unit activity)

Question 61

A manager will use the strength of the relationship between cost and volume in regression analysis to make decisions regarding which of the following?

Answer 61

to assist in predicting costs at different volumes within relevant range

Question 62

contribution margin

Answer 62

net sales revenue - variable costs or fixed costs + net income

Question 63

operating income with variable costing

Answer 63

revenue - variable production expenses - variable selling and admin expenses = contribution margin - fixed prod. expenses - fixed sell/admin expense = operating income

Question 64

How can a breakeven point be calculated?

Answer 64

in terms of number of units or in terms of sales revenue

Question 65

Breakeven point

Answer 65

fixed costs/ (revenue per unit - variable cost per unit

Question 66

targeting operating income

Answer 66

fixed costs by contribution margin ratio

Question 67

contribution margin ratio

Answer 67

revenue - variable costs/revenue

Question 68

variable expense per unit

Answer 68

total variable expense/number of units

Question 69

if variable cost per unit decreases white sales price per unit and fixed costs remain constant what happenes

Answer 69

contribution margin increases and breakeven point decreases