Question 1

Variable costs are always direct costs

Accepted Answer

A) True 
 B)False

Question 2

A cost object is:

Accepted Answer

A)   an item for which managers are trying to determine the cost.
B)   an item to which managers must directly trace costs.
C)   an item to which it is not worth the effort of tracing costs.
D)   an item for sale by a business.E) B) and D)
F) A) and C)

Question 3

Which of the following types of organizations sells goods to the general public?

Accepted Answer

A)   Service companies
B)   Manufacturing firms
C)   Merchandising companies
D)   RetailersE) A) and B)
F) A) and C)

Question 4

Which of the following statements is true about the use of managerial accounting information in nonprofit organizations?

Accepted Answer

A)   Universities do not exist strictly to earn profit for shareholders, so managerial accounting information is not vital to their operations.
B)   Unlike other nonprofits, hospitals (which exist with a focus on financial results in addition to health metrics)  make use of managerial accounting.
C)   Because managers of nonprofit organizations need timely and relevant information to make decisions, managerial accounting is vital to these organizations.
D)   Because nonprofit organizations - hospitals, educational institutions, charities - do not exist with a profit motive, they do not use managerial accounting principles.E) A) and C)
F) B) and C)

Question 5

A relevant cost is a cost that:

Accepted Answer

A)   has the potential to influence a decision.
B)   changes in direct proportion to changes in activity level.
C)   can be traced to a specific cost object.
D)   is used for control purposes.E) A) and C)
F) A) and D)

Question 6

Which of the following is not a characteristic of managerial accounting?

Accepted Answer

A)   Information is used by internal parties.
B)   Information is subjective, relevant, future-oriented.
C)   Reports are prepared as needed.
D)   Reports are prepared according to GAAP.E) All of the above
F) B) and D)

Question 7

Financial accounting information is generally used exclusively by internal parties such as managers

Accepted Answer

A) True 
 B)False

Question 8

Manufacturing costs are:

Accepted Answer

A)   always relevant.
B)   always fixed.
C)   the costs incurred to produce a final product.
D)   split into prime costs and conversion costs.E) A) and D)
F) B) and D)

Question 9

Which of the following changes introduced by the Sarbanes-Oxley Act is not one intended to reduce opportunities for error and fraud?

Accepted Answer

A)   Internal control report from management
B)   Code of ethics
C)   Stronger oversight by directors
D)   Internal control audit by external auditorsE) B) and C)
F) A) and D)

Question 10

Melinda's Custom Homes, a construction company that builds custom-designed houses, incurred costs for the following items. Place an "X" in the appropriate column to indicate whether they are direct or indirect, and whether they are variable or fixed. The cost object is the houses built by the company.

Accepted Answer

The answer of Melinda's Custom Homes, a construction company that...

Question 11

For each of the following independent cases, compute the missing values:

Accepted Answer

The answer of For each of the following independent cases,...

Question 12

When are period costs counted as inventory?

Accepted Answer

A)   Before products are sold.
B)   After products are sold.
C)   After products are completed, but before they are sold.
D)   Never.E) A) and B)
F) All of the above

Question 13

The cost of not doing something is a(n) :

Accepted Answer

A)   out-of-pocket cost.
B)   opportunity cost.
C)   direct cost.
D)   cost object.E) C) and D)
F) A) and B)

Question 14

Which of the following functions of management involves providing feedback for future plans?

Accepted Answer

A)   Planning
B)   Implementing
C)   Reviewing
D)   ControlE) All of the above
F) B) and D)

Question 15

Which of the following is a direct cost of manufacturing a table made of wood and glass, for a firm that manufactures furniture?

Accepted Answer

A)   The cost of the wood in the table.
B)   The cost of rent on the factory where the table is manufactured.
C)   The salary of the supervisor who oversees all production for the firm.
D)   Depreciation on the tools used to manufacture the table.E) A) and B)
F) A) and C)

Question 16

Melinda's Custom Homes, a construction company that builds custom-designed houses, incurred costs for the following items.  Calculate each of the following, where the cost object is the houses built by the company:
a. Total variable costs
b. Total fixed costs
c. Total direct costs
d. Total indirect costs

Accepted Answer

a. Total variable costs: $478,900 = $105...

Question 17

Whether a cost is treated as direct or indirect depends on whether tracing the cost is both possible and feasible

Accepted Answer

A) True 
 B)False

Question 18

Prime costs include direct materials, direct labor, and manufacturing overhead

Accepted Answer

A) True 
 B)False

Question 19

Indirect costs are:

Accepted Answer

A)   costs that are not worth the effort to trace to a specific cost object.
B)   costs that change, in total, in direct proportion to changes in activity levels.
C)   always irrelevant.
D)   costs that remain constant no matter the activity level.E) A) and C)
F) A) and B)

Question 20

Managerial accounting information includes all of the following except:

Accepted Answer

A)   Budgets.
B)   Performance evaluations, for example budget-to-actual reports.
C)   Cost reports.
D)   Financial statements prepared in accordance with generally accepted accounting principles.E) B) and C)
F) None of the above

Exam 1: Introduction to Managerial Accounting

The cost of not doing something is a(n) :

Correct Answer
verified

For each of the following independent cases, compute the missing values:

Correct Answer
verified

Managerial accounting information includes all of the following except:

Correct Answer
verified

Manufacturing costs are:

Correct Answer
verified

Prime costs include direct materials, direct labor, and manufacturing overhead

Correct Answer
verified

Variable costs are always direct costs

Correct Answer
verified

A cost object is:

Correct Answer
verified

A relevant cost is a cost that:

Correct Answer
verified

Which of the following functions of management involves providing feedback for future plans?

Correct Answer
verified

Correct Answer
verified
a. Total variable costs: $478,900 = $105...
View Answer

Which of the following is a direct cost of manufacturing a table made of wood and glass, for a firm that manufactures furniture?

Correct Answer
verified

Which of the following changes introduced by the Sarbanes-Oxley Act is not one intended to reduce opportunities for error and fraud?

Correct Answer
verified

Correct Answer
verified

Whether a cost is treated as direct or indirect depends on whether tracing the cost is both possible and feasible

Correct Answer
verified

Financial accounting information is generally used exclusively by internal parties such as managers

Correct Answer
verified

Which of the following is not a characteristic of managerial accounting?

Correct Answer
verified

When are period costs counted as inventory?

Correct Answer
verified

Which of the following types of organizations sells goods to the general public?

Correct Answer
verified

Indirect costs are:

Correct Answer
verified

Which of the following statements is true about the use of managerial accounting information in nonprofit organizations?

Correct Answer
verified

Exam 1: Introduction to Managerial Accounting

The cost of not doing something is a(n) :

Correct AnswerverifiedShow Answer

For each of the following independent cases, compute the missing values:

Correct AnswerverifiedShow Answer

Managerial accounting information includes all of the following except:

Correct AnswerverifiedShow Answer

Manufacturing costs are:

Correct AnswerverifiedShow Answer

Prime costs include direct materials, direct labor, and manufacturing overhead

Correct AnswerverifiedShow Answer

Variable costs are always direct costs

Correct AnswerverifiedShow Answer

A cost object is:

Correct AnswerverifiedShow Answer

A relevant cost is a cost that:

Correct AnswerverifiedShow Answer

Which of the following functions of management involves providing feedback for future plans?

Correct AnswerverifiedShow Answer

Correct Answerverifieda. Total variable costs: $478,900 = $105...View AnswerShow Answer

Which of the following is a direct cost of manufacturing a table made of wood and glass, for a firm that manufactures furniture?

Correct AnswerverifiedShow Answer

Which of the following changes introduced by the Sarbanes-Oxley Act is not one intended to reduce opportunities for error and fraud?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Whether a cost is treated as direct or indirect depends on whether tracing the cost is both possible and feasible

Correct AnswerverifiedShow Answer

Financial accounting information is generally used exclusively by internal parties such as managers

Correct AnswerverifiedShow Answer

Which of the following is not a characteristic of managerial accounting?

Correct AnswerverifiedShow Answer

When are period costs counted as inventory?

Correct AnswerverifiedShow Answer

Which of the following types of organizations sells goods to the general public?

Correct AnswerverifiedShow Answer

Indirect costs are:

Correct AnswerverifiedShow Answer

Which of the following statements is true about the use of managerial accounting information in nonprofit organizations?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
a. Total variable costs: $478,900 = $105...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified