Quick Check: Prologue/Chapter 1

Question 1

Which of the following is false about managerial accounting?

a. Managerial accounting is for internal users

b. Managerial accounting follows GAAP

c. Managerial accounting is focused on the future

d. Managerial accounting is focused on the timeliness of information

Answer 1

b. Managerial accounting follows GAAP

Question 2

Which of the following is not a product cost?

Wood used to make a table

Salary of the factory supervisor

Labor cost to assemble a table

Salary of the company president

Answer 2

Salary of the company president

Question 3

Sales – Variable Expenses = ?

Gross Profit
COGS
Contribution Margin
Net Income

Answer 3

Contribution Margin

Question 4

If my level of activity increase, what impact will that have on my variable and fixed costs per unit?

a. Variable cost per unit increases, fixed cost per unit is decreases

b. Variable cost per unit is increases, fixed cost per unit increases

c. Variable cost per unit constant, fixed cost per unit is constant

d. Variable cost per unit is constant, fixed cost per unit decreases

Answer 4

d. Variable cost per unit is constant, fixed cost per unit decreases