Knowledge Check 01 Match the Term and the Definition

Knowledge Check 01 Match the term and the definition. Emphasizes decision affecting the future. Emphasizes relevance Emphasizes financial consequences of past activities Not required to follow GAAP Emphasizes objectivity Managerial Accounting Managerial Accounting Financial Accounting Managerial Accounting Financial Accounting Knowledge Check 02 Planning involves ________. - hiring employees setting goals and objectives analyzing financial statements coordinating company activities Knowledge Check 03 All of the following are pillars of managerial accounting except ________. - Controlling decision making planning maximizing profit Knowledge Check 04 Which of the following is not a business management perspective that goes beyond the numbers to enable intelligent planning, controlling and decision making? - Enterprise risk management perspective Lean production perspective Corporate social responsibility perspective Leadership perspective Knowledge Check 05 Match the term and the definition. 1 Adventure Holiday sells thousands of tour packages each month through its various branches. A branch manager’s salary would be a (n) ________ of selling a tour package. Indirect Cost 2 A ________ is a cost that is incurred to support a number of cost objects but cannot be traced to them individually. Common Cost 3 Adventure Holiday sells thousands of tour packages each month through its various branches. A branch manager’s salary would be a (n) ________ of the branch. Direct Cost Knowledge Check 06 Manufacturing costs include all of the following categories except ________. - administrative costs direct labor direct materials manufacturing overhead Knowledge Check 07 Materials that become an integral part of the finished product and whose costs can be conveniently traced to the finished product are called ________. - raw materials direct materials indirect materials Knowledge Check 08 ________ is sometimes called “touch labor.” - Direct labor Indirect labor Overhead labor Knowledge Check 09 Items such as indirect materials, indirect labor, maintenance and repairs on production equipment, depreciation, and insurance on manufacturing facilities are included in ________. - nonmanufacturing costs manufacturing overhead costs direct costs Knowledge Check 10 Property taxes associated with a company's administrative facility are considered ________. - nonmanufacturing costs manufacturing overhead costs selling costs Knowledge Check 11 How should the wages of a sheet metal worker in a fabrication plant be classified? - Product cost Period cost Nonmanufacturing cost Administrative cost Knowledge Check 12 The ________ requires that the costs incurred to generate a particular revenue should be recognized as expenses in the same period that the revenue is recognized. - materiality concept consistency concept matching principle going concern assumption Knowledge Check 13 Which of the following is common to both prime cost and conversion cost? - Manufacturing overhead Direct materials Nonmanufacturing costs Direct labor Knowledge Check 14 If a firm increases its activity level, ________. - costs will remain the same all costs will rise some costs will change, other costs will remain the same Knowledge Check 15 Cyber Devices manufactures PCTV products that enable people to watch television content on their computers. It sells its product to retailers for $50. A tuner component that goes into each of these devices costs $5 to acquire. The total variable cost at an activity level of 1,000 units equals ________. - $50,000 $5 $1,000 $5,000 Knowledge Check 16 A fixed cost is a cost which ________. - varies in total with changes in the level of activity remains constant per unit with changes in the level of activity varies inversely in total with changes in the level of activity remains constant in total with changes in the level of activity Knowledge Check 17 In a small manufacturing facility, one welder is needed for every 200 hours of machine-hours or fewer in a month. The welder is paid a monthly salary of $2,500. If the total monthly requirement is 1,300 machine-hours, the total salaried employee expense is ________. - $12,500 $16,250 $17,500 $15,000 Knowledge Check 18 In the equation, Y = a + bX, X represents ________. - the total mixed cost the level of activity the total fixed cost the variable cost per unit of activity Knowledge Check 19 Differential costs are always ________. - irrelevant in making business decisions relevant in making business decisions a sunk cost Knowledge Check 20 Which of the following is always an irrelevant cost? - Differential cost Sunk cost Opportunity cost Knowledge Check 21 Which of the following statements about opportunity costs is not correct? - An opportunity cost is the potential benefit that is given up when one alternative is selected over another. An opportunity cost cannot be changed by any decision made now or in the future. Opportunity costs are not usually found in accounting records. Opportunity costs are costs that must be explicitly considered in every decision a manager makes. Knowledge Check 22 The traditional income statement uses which of the following cost categories? - Variable expenses and fixed expenses. Cost of goods sold and fixed expenses. Operating expenses and selling and administrative expenses. Cost of goods sold and selling and administrative expenses. Knowledge Check 23 Audio Corporation purchased $20,000 of DVDs during the current year. The company had DVD inventory of $15,000 at the beginning of the year. An end of the year audit revealed that the company had DVD inventory of $10,000. The amount that would be reported as cost of goods sold in the income statement for the current year is ________. - $25,000 $15,000 $10,000 $20,000 Knowledge Check 24 Which of the following is true of the contribution approach? - It is mainly used for external reporting purposes. It separates costs into fixed and variable categories. It is not useful for merchandising companies. It calculates gross margin by deducting cost of goods sold from sales. Knowledge Check 25 Davidson Company has sales of $100,000, variable cost of goods sold of $40,000, variable selling expenses of $15,000, variable administrative expenses of $5,000, fixed selling expenses of $7,000, and fixed administrative expenses of $9,000. What is Davidson’s contribution margin? - 84,000 $45,000 $40,000 $8,000 Knowledge Check 26 Which of the following is a measure of whether or not a delivered product meets its design specifications? - Cost of quality Cost of design Quality of conformance Knowledge Check 27 Which of the following are sometimes called inspection costs? - Prevention costs Internal failure costs Appraisal costs External failure costs Knowledge Check 28 Which of the following costs support activities whose purpose is to reduce the number of defects? - Prevention costs Internal failure costs Appraisal costs External failure costs Knowledge Check 29 Which of the following is an example of an internal failure cost? - Net cost of scrap Cost of warranty repairs Liability arising from defective products Maintenance of test equipment Knowledge Check 30 Which of the following is an example of an external failure cost? - Product recalls Net cost of spoilage Disposal of defective products Downtime caused by quality problems Knowledge Check 31 Which of the following statements is not correct? - As a company's quality program becomes more refined, prevention activities usually become more effective than appraisal activities. Total quality cost drops rapidly as the quality of conformance increases. Appraisal can only find defects. A company can reduce its total quality cost by focusing less of its efforts on prevention and appraisal. Knowledge Check 32 A report that details prevention, appraisal, internal failure, and external failure costs is called a ________. - risk report quality cost report control report Knowledge Check 33 Which of the following is not a benefit of a quality cost report? - Helps managers see the financial significance of defects Helps managers identify the relative importance of quality problems faced by their company Helps managers see the lost sales arising from customer ill will Helps managers see the distribution of their quality costs Incorrect Knowledge Check 34 All the following are necessary to obtain ISO 9000 certification EXCEPT ________. - a quality control system is in use the system is backed up with detailed documentation of quality control procedures the quality of output is the best in the industry the intended level of quality is achieved on a sustained, consistent basis