Question 1

When using management by exception, a difference between actual costs and budgeted costs

Accepted Answer

A)  should be investigated if the amount is large. 
B)  indicates that the planned cost was poorly estimated. 
C)  indicates that the manager is doing a poor job. 
D)  should be ignored if it increases profit. 
A)  should be investigated if the amount is large. 
B)  indicates that the planned cost was poorly estimated. 
C)  indicates that the manager is doing a poor job. 
D)  should be ignored if it increases profit.

Question 2

Since a manager can influence noncontrollable costs, they should be considered when evaluating a manager's performance.

Accepted Answer

A) True 
 B)False

Question 3

Rom Generators is in the process of preparing a production cost budget for August. Actual costs in July for the production of 60 generators were: $$\begin{array} { l r } 
\text { Materials cost } & \$ 5,200 \
\text { Labor cost } & 2,600 \
\text { Rent } & 1,200 \
\text { Depreciation } & 1,700 \
\text { Other fixed costs } & 4,600 \
\text { Total } & \$ 15,300 \
\hline
\end{array}$$ Materials and labor are the only variable costs. If production and sales are budgeted to increase to 70 generators in August, how much is the expected total variable cost on the August budget?

Accepted Answer

A)  $17,850 
B)  $16,600 
C)  $9,100 
D)  $15,300 
A)  $17,850 
B)  $16,600 
C)  $9,100 
D)  $15,300

Question 4

Which of the following is a direct cost in relation to the cost of teaching the managerial accounting course in a college?

Accepted Answer

A)  The cost of the paper that is given as handouts in the class 
B)  The cost of the electricity to light the classroom 
C)  The cost of the registration system 
D)  The cost of the financial aid department of the college 
A)  The cost of the paper that is given as handouts in the class 
B)  The cost of the electricity to light the classroom 
C)  The cost of the registration system 
D)  The cost of the financial aid department of the college

Question 5

Sunk costs are never a consideration in incremental analysis.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following statements regarding performance measures is true?

Accepted Answer

A)  GAAP requires performance measures for all employees. 
B)  Companies must select from performance measures published by its own industry when deciding how they want to assess performance. 
C)  Employees tend to direct their attention to what is measured and may neglect what is not measured. 
D)  Companies need to place emphasis on a single performance measure so employees know what to expect. 
A)  GAAP requires performance measures for all employees. 
B)  Companies must select from performance measures published by its own industry when deciding how they want to assess performance. 
C)  Employees tend to direct their attention to what is measured and may neglect what is not measured. 
D)  Companies need to place emphasis on a single performance measure so employees know what to expect.

Question 7

Financial accounting stresses accounting concepts and procedures that are relevant to preparing reports for internal users of accounting information.

Accepted Answer

A) True 
 B)False

Question 8

Variable costs in total increase or decrease in proportion with changes in the level of business activity.

Accepted Answer

A) True 
 B)False

Question 9

Supply chain management systems (SCM) allow suppliers some access to a company's databases so goods can more profitably be delivered to a company's customers.

Accepted Answer

A) True 
 B)False

Question 10

A good code of ethics eliminates potential unethical behavior.

Accepted Answer

A) True 
 B)False

Question 11

Sweet Time Candies projects its factory rent to be $8,000 in August when 4,000 pounds of candy are expected to be produced. If rent is a fixed cost, and if production is expected to increase to 6,000 units in September, what is the expected cost of rent in September?

Accepted Answer

A)  $12,000 
B)  $8,000 
C)  $7,000 
D)  Not enough information is provided to determine the answer. 
A)  $12,000 
B)  $8,000 
C)  $7,000 
D)  Not enough information is provided to determine the answer.

Question 12

ProLight plans to sell 1,600 white lights that enhance indoor plant growth next year with total budgeted sales of $48,000 and estimated profit of $8,000. Variable costs are projected to be $17.50 per unit. Customer A offers to pay $10,000 to buy 400 lights from ProLight. Total fixed costs are $12,000 per year. This offer does not affect ProLight's other planned operations. How much is the incremental revenue associated with the offer from Customer A?

Accepted Answer

A)  $58,000 
B)  $10,000 
C)  $48,000 
D)  $3,000 
A)  $58,000 
B)  $10,000 
C)  $48,000 
D)  $3,000

Question 13

Triatt Resort has 200 rooms. Each room rents at $130 per night and variable costs total $42 per room per night of occupancy. The fixed costs total $18,700 per month. If 70% of the rooms are occupied each of the 30 nights in June, how much will total variable costs be for June?

Accepted Answer

A)  $546,000 
B)  $369,600 
C)  $176,400 
D)  $252,000 
A)  $546,000 
B)  $369,600 
C)  $176,400 
D)  $252,000

Question 14

ProLight plans to sell 1,600 white lights that enhance indoor plant growth next year with total budgeted sales of $48,000 and estimated profit of $8,000. Variable costs are projected to be $17.50 per unit. Customer A offers to pay $10,000 to buy 400 lights from ProLight. Total fixed costs are $12,000 per year. This offer does not affect ProLight's other planned operations. What is the incremental cost associated with the offer from Customer A?

Accepted Answer

A)  $58,000 
B)  $10,000 
C)  $48,000 
D)  $7,000 
A)  $58,000 
B)  $10,000 
C)  $48,000 
D)  $7,000

Question 15

Harrison Carpets incurred the following costs for March when 3,000 square feet of carpet were produced and sold:
. $18,500 for nylon thread used on carpet
. $5,000 for scotch guard for carpet
.$7,200 for jute backing to reinforce the carpet
. $6,800 for glue to be used in the manufacturing process
. $13,000 for insurance (half for administrative activities, half for production activities)
. $9,000 for production employees' wages
. $6,500 for rent and utilities in the factory
How much are total variable costs if 3,500 square feet of carpet are produced and sold in April?

Accepted Answer

A)  $77,000 
B)  $46,500 
C)  $54,250 
D)  $43,750 
A)  $77,000 
B)  $46,500 
C)  $54,250 
D)  $43,750

Question 16

Sunk costs

Accepted Answer

A)  can be incremental or not incremental, depending on the decision to be made. 
B)  include all incremental costs to management decisions. 
C)  are costs that cannot be directly traded to a product, activity, or department. 
D)  None of these answer choices are correct. 
A)  can be incremental or not incremental, depending on the decision to be made. 
B)  include all incremental costs to management decisions. 
C)  are costs that cannot be directly traded to a product, activity, or department. 
D)  None of these answer choices are correct.

Question 17

The controller is responsible for preparing reports for planning and evaluating company activities.

Accepted Answer

A) True 
 B)False

Question 18

Budgets can be used to communicate a company's goals to employees.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following costs will change when the level of business activity changes?

Accepted Answer

A)  Total fixed costs 
B)  Variable cost per unit 
C)  A company's total costs 
D)  Sunk cost 
A)  Total fixed costs 
B)  Variable cost per unit 
C)  A company's total costs 
D)  Sunk cost

When using management by exception, a difference between actual costs and budgeted costs

Since a manager can influence noncontrollable costs, they should be considered when evaluating a manager's performance.

Which of the following is a direct cost in relation to the cost of teaching the managerial accounting course in a college?

Sunk costs are never a consideration in incremental analysis.

Which of the following statements regarding performance measures is true?

Financial accounting stresses accounting concepts and procedures that are relevant to preparing reports for internal users of accounting information.

Variable costs in total increase or decrease in proportion with changes in the level of business activity.

Supply chain management systems (SCM) allow suppliers some access to a company's databases so goods can more profitably be delivered to a company's customers.

A good code of ethics eliminates potential unethical behavior.

Sweet Time Candies projects its factory rent to be $8,000 in August when 4,000 pounds of candy are expected to be produced. If rent is a fixed cost, and if production is expected to increase to 6,000 units in September, what is the expected cost of rent in September?

Triatt Resort has 200 rooms. Each room rents at $130 per night and variable costs total $42 per room per night of occupancy. The fixed costs total $18,700 per month. If 70% of the rooms are occupied each of the 30 nights in June, how much will total variable costs be for June?

Sunk costs

The controller is responsible for preparing reports for planning and evaluating company activities.

Budgets can be used to communicate a company's goals to employees.

Which of the following costs will change when the level of business activity changes?

Job-Order Costing for Manufacturing and Service Companies

Process Costing

Cost-Volume-Profit Analysis

Variable Costing

Cost Allocation and Activity-Based Costing

The Use of Cost Information in Management Decision Making

Pricing Decisions

Capital Budgeting Decisions

Budgetary Planning and Control

Standard Costs and Variance Analysis

Decentralization and Performance Evaluation

Statement of Cash Flows

Filters

Exam 1: Managerial Accounting in the Information Age

When using management by exception, a difference between actual costs and budgeted costs

Since a manager can influence noncontrollable costs, they should be considered when evaluating a manager's performance.

Which of the following is a direct cost in relation to the cost of teaching the managerial accounting course in a college?

Sunk costs are never a consideration in incremental analysis.

Which of the following statements regarding performance measures is true?

Financial accounting stresses accounting concepts and procedures that are relevant to preparing reports for internal users of accounting information.

Variable costs in total increase or decrease in proportion with changes in the level of business activity.

Supply chain management systems (SCM) allow suppliers some access to a company's databases so goods can more profitably be delivered to a company's customers.

A good code of ethics eliminates potential unethical behavior.

Sweet Time Candies projects its factory rent to be $8,000 in August when 4,000 pounds of candy are expected to be produced. If rent is a fixed cost, and if production is expected to increase to 6,000 units in September, what is the expected cost of rent in September?

Triatt Resort has 200 rooms. Each room rents at $130 per night and variable costs total $42 per room per night of occupancy. The fixed costs total $18,700 per month. If 70% of the rooms are occupied each of the 30 nights in June, how much will total variable costs be for June?

Sunk costs

The controller is responsible for preparing reports for planning and evaluating company activities.

Budgets can be used to communicate a company's goals to employees.

Which of the following costs will change when the level of business activity changes?

Job-Order Costing for Manufacturing and Service Companies

Process Costing

Cost-Volume-Profit Analysis

Variable Costing

Cost Allocation and Activity-Based Costing

The Use of Cost Information in Management Decision Making

Pricing Decisions

Capital Budgeting Decisions

Budgetary Planning and Control

Standard Costs and Variance Analysis

Decentralization and Performance Evaluation

Statement of Cash Flows

Filters