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Management Accounting > Syllabus A. Management Information > Flashcards

Syllabus A. Management Information Flashcards

1
Q

Describe the purpose of cost and management accounting?

A

to provide information for planning, decision making and control

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2
Q

What is cost accounting mainly concerned with?

A
  • preparing statements
  • cost data collection
  • applying costs to inventory,products and services
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3
Q

The main users of financial accounting information are __________ to an organisation.

A

external

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4
Q

In management accounting, ______________ decides the best way to present information.

A

management

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5
Q

Financial accounting presents __________ information

A

historical

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6
Q

The purpose of management accounting is to aid in , __________ decision-making and ___________.

A

planning; control

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7
Q

________ involves establishing objectives and selecting appropriate strategies to achieve these objectives.

A

Planning

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8
Q

_____ is process by which actual performance of the organisation is compared against defined organisational plans.

A

Controlling

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9
Q

A ________ is a possible course of action that might enable an organisation to achieve its objectives.

A

strategy

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10
Q

Strategic information is mainly used by ______ management in an organisation.

A

senior

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11
Q

Productivity measurements are examples of ______ information

A

tactical

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12
Q

__________ information is required frequently by its main users

A

Operational

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13
Q

_____is a process by which senior management make medium-term, more detailed plans for the next year, for e.g. how the resources of the business should be employed

A

tactical planning

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14
Q

_____ involves making day to day operations. Front-line managers such as foremen have to ensure that specific tasks are planned.

A

operational planning

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15
Q

What is Information?

A

Information is data that has been processed in such a way as to be meaningful to the person who receives it.

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16
Q

_______ is the raw material for data processing

A

Data

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17
Q

True or false?

Data on its own is meaningless.

A

True

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18
Q

The benefits obtainable from the information must _____ the costs of acquiring it

A

exceed

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19
Q

Information should be _____because using incorrect information could cause serious and damaging consequences

A

accurate

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20
Q

Information must be relevant to the purpose for which a ______ wants it.

A

manager

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21
Q

Information should be accessible via the ________ ________ of communication and to the right people

A

appropriate channels

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22
Q

There is a possibility that management accounting information may ____ to meet the objective of assisting management in the decision-making process due to its failure to meet the requirements of good information

A

fail

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23
Q

Not all information produced by accounting system is ______ to the decisions made by management

A

relevant

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24
Q

______ is data collected especially for a specific purpose

A

Primary data

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25
Q

_____ is data which can take on any value

A

continuous data

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26
Q

Give examples of external sources of data. (2)

A

Government statistics & The Financial Times.

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27
Q

____________may provide information concerning detailed labour costs

A

payroll system

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28
Q

The ______is a global network allowing any computer with a telecommunications link to send and receive information to and from any other computer

A

internet

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29
Q

In which economic time does consumer demand increase?

A

Boom

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30
Q

If a company carries a high level of debt, it’s cash flow will be affected by what?

A

An increase in interest rates

31
Q

__________ are identified with goods produced for resale.

A

Production costs

32
Q

_________ are not directly associated with production of manufactured goods.

A

Non-production costs

33
Q

Give examples of Production costs (3)

A

Direct material
Direct labour
Variable production overheads

34
Q

Give examples of Non-production costs (3)

A

Administrative costs
Selling and distribution expenses
Finance costs

35
Q

Indicate whether each event results in the incurrence of a production cost or a selling, distribution, administration or finance cost.

i. Paid wages to production workers
ii. Paid advertising
iii. Purchased cars for sales staff
iv. Used general office supplies

A

(i) production cost
(ii) selling
(iii) selling
(iv) administration

36
Q

Indicate whether each event results in the incurrence of a production cost or a selling, distribution, administration or finance cost.

i. Used raw materials in the manufacturing process
ii. Paid wages to factory supervisors
iii. Paid loan interest

A

(i) production cost
(ii) overhead
(iii) finance

37
Q

A manufacturing organisation incurs costs relating to the following:

(1) Commission payable to salespersons.
(2) Inspecting all products.
(3) Packing the products at the end of the manufacturing process prior to moving them to the warehouse.

Which of these costs are classified as production costs?

A

(2) Inspecting all products.

(3) Packing the products at the end of the manufacturing process prior to moving them to the warehouse.

38
Q

_________include all costs involved in running the general administration department of an organisation

A

administrative costs

39
Q

________ include all the costs that are incurred in order to finance an organisation, for e.g. loan interest

A

finance cost

40
Q

The three major cost components of manufacturing a product are

A

direct materials
direct labour
factory overhead

41
Q

________includes all cost of materials purchased for production raw materials and components

A

materials

42
Q

Identify whether the following costs are direct or indirect materials, labour or expenses.

i. Wages of factory production workers
ii. Salaries of factory supervisors
iii. Rent of a factory

A

(i) dir labour
(ii) indir labour
(iii) indir expense

43
Q

Identify whether the following costs are direct or indirect materials, labour or expenses.

i. Oil for lubricating machines
ii. Packing material

A

(i) indir material

(ii) dir material

44
Q

Which one of the following should be classified as indirect labour?

  • Assembly workers on a car production line
  • Bricklayers in a house building company
  • Machinists in a factory producing clothes
  • Forklift truck drivers in the stores of an engineering company
A

Forklift truck drivers in the stores of an engineering company

45
Q

In an organisation, manufacturing a number of different products in one large factory, the rent of that factory is an example of a direct expense when costing a product.

Is this statement true or false?

A

False

46
Q

______ materials are materials which cannot be traced in the finished product, for example, oil for machines in the production line.

A

Indirect

47
Q

_______costs not directly charged to production. Examples are rent, rates and insurance of a factory, depreciation, fuel, power maintenance of plant, machinery and buildings.

A

indirect expenses

48
Q

Electricity bill is classified as

A

semi-variable cost

49
Q

Raw material is classified as

A

variable cost

50
Q

Rent of factory is classified as

A

fixed cost

51
Q

Supervisors’ wages (more supervisors required as the number of employees increases) is classified as

A

stepped fixed costs

52
Q

A semi-variable cost is one that, in the short term, remains the same over a given range of activity but beyond that increases and then remains constant at the higher level of activity.

Is this statement true or false?

A

False

53
Q

Straight line depreciation of machinery is classified as

A

A fixed cost

54
Q

A stepped fixed cost is only fixed within certain levels of activity.

The depreciation of a machine may be fixed if production remains below 1,000 units per month. If production exceeds 1,000 units, a second machine may be required, and the cost of depreciation (on two machines) would go up a step.

True or False?

A

True

55
Q

A ____ _____ is any activity for which a separate measurement of cost is undertaken.

A

Cost object

56
Q

_____ is a unit of product or service in relation to which costs are ascertained. E.g room, a course, one litre of paint

A

Cost Units

57
Q

For which of the following is a profit centre manager responsible?

A

Costs and revenues

58
Q

Which of the following is a characteristic of an investment centre?

  • Managers can purchase capital assets
  • Managers have control only over marketing
  • Managers are accountable for revenues only
  • Managers are accountable for costs only
A

Managers can purchase capital assets

59
Q

A cost centre is

A

A production or service location, function, activity or item of equipment for which costs are accumulated

60
Q

A cost center is a production or service location, function, activity or item of equipment whose costs are identified and recorded, e.g. manufacturing department, purchasing department and paint shop.

true or false?

A

true

61
Q

Revenue center managers…..

A

will want information on markets and new products and they will look closely at pricing and the sales performance of competitors in addition to monitoring revenue figures.

62
Q

The manager here will want the same information as the profit centre manager and in addition they will require quite detailed appraisals of possible investments and information regarding the results of investments already undertaken.

A

Investment Centre

63
Q

The manager here will want information regarding both revenues and costs. They will be judged on the profit margin achieved by their division.

A

Profit Centre

64
Q

When producing written reports, the management accountant needs to determine the type of document required and establish the user of the information.

true or false?

A

true

65
Q 
Last year, a company made the following sales in each of its four stores which it has in different areas of the country. 
 Store 1     $30,000
Store 2     $25,000
Store 3     $70,000
Store 4     $75,000

Total $200,000

Using a pie chart to represent the proportion of sales which each store has made last year, what would be the angle of the section to represent the sales from store 3?

A

126°

70000 / 200000 X 360° = 126°

66
Q

Identify the correct formula for calculating the segment angles in a pie chart

A

The segment value divided by the total value multiplied by 360

67
Q

Which of these are types of bar chart?

i. Component bar chart
ii. Composite bar chart
iii. Percentage component bar chart
iv. Simple bar chart

A

i. Component bar chart
iii. Percentage component bar chart
iv. Simple bar chart

68
Q

Which one of the following statements is true?

  • The independent variable is shown on the y axis
  • The dependent variable is shown on the y axis
  • The x axis is the vertical axis
  • The y axis is the horizontal axis
A

The dependent variable is shown on the y axis

69
Q

What is the independent variable?

A

A fixed point of measurement not affected by another variable

70
Q

Product B is made up as follows:

Material W: $2,000
Material X: $1,000
Material Y: $4,000
Material Z: $2,000

If the material proportions were displayed on a pie chart, how many degrees would Material Y represent?

A

160 degrees

4,000 / 9000 x 360 = 160 degrees

71
Q
  1. Clarity of presentation of information can be further improved if data is presented in the form of charts or graphs.
  2. A bar chart is widely used method of illustrating quantitative data.
  • both statements are true
  • both statements are false
  • statement 1 is false
  • statement 2 is false
A

both statements are true

72
Q

A __________________ is one where there is more than one bar for each subdivision of the chart.

For example, if the sales per product for each year are given then of each year there could be a separate bar for each product.

A

compound bar chart

73
Q

A company’s sales in the last year in its three different markets were as follows:

                             $
Market                  1	100,000
Market                 2	150,000
Market                 3	50,000
Total	            300,000

In a pie chart representing the proportion of the sales made in each market what would be the angle of the section representing Market 3 (to the nearest whole degree)?

A

60 degrees

Total number of degrees = 360
Proportion of market 3 sales: (5,000/300,000) x 360 = 60 degrees

74
Q

You have been asked to make a pie-chart from the following information that relates to costs incurred in different departments of the factory:

Dept A  $560 
Dept B  $330 
Dept C  $215 
Dept D  $746 
Dept E  $662 
Dept F  $452

What is the angle in pie-chart representing Department D?

Round your answer to one decimal place.

A

Total cost = $560 + $330 + $215 + $746 + $662 + $452 = $2,965

Dept D = $746 / $2,965 x 360 degrees = 90.6 degrees

Management Accounting (1 decks)

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