Question 1

A thorough understanding of managerial accounting is essential to be an effective manager.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is true concerning Enterprise Resource Planning (ERP) systems?

Accepted Answer

A) They grew out of the material requirements planning systems that preceded them. 
B) They will allow customers to track their orders. 
C) They are considered sunk costs. 
D) All of these answer choices are correct. 
A) They grew out of the material requirements planning systems that preceded them. 
B) They will allow customers to track their orders. 
C) They are considered sunk costs. 
D) All of these answer choices are correct.

Question 3

Opportunity costs are

Accepted Answer

A) considered to be fixed costs in the short-term. 
B) another term for sunk costs. 
C) costs that are controlled by most effective managers. 
D) the value of benefits forgone when one decision alternative is selected over another. 
A) considered to be fixed costs in the short-term. 
B) another term for sunk costs. 
C) costs that are controlled by most effective managers. 
D) the value of benefits forgone when one decision alternative is selected over another.

Question 4

Variable cost per unit remains constant when the number of units produced changes.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is not a reasonable measure of a plant manager's performance?

Accepted Answer

A) Net income 
B) Cost of insurance for the plant 
C) Number of orders delivered on time 
D) Change in market share 
A) Net income 
B) Cost of insurance for the plant 
C) Number of orders delivered on time 
D) Change in market share

Question 6

Which of the following is not usually a responsibility of the controller?

Accepted Answer

A) Preparing budgets and performance reports 
B) Filing tax returns 
C) Managing cash and marketable securities 
D) Providing information for management decisions 
A) Preparing budgets and performance reports 
B) Filing tax returns 
C) Managing cash and marketable securities 
D) Providing information for management decisions

Question 7

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 incremental profit associated with the offer from Customer A?

Accepted Answer

A) $3,000 
B) $10,000 
C) $48,000 
D) $7,000 
A) $3,000 
B) $10,000 
C) $48,000 
D) $7,000

Question 8

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 9

Bagel Time produced and sold 2,500 bagels last month and incurred fixed costs totaling $8,000.If production and sales are expected to decrease by 10% next month, which of the following statements is true?

Accepted Answer

A) Total fixed costs will increase. 
B) Total fixed costs will decrease. 
C) Fixed cost per unit will increase. 
D) Fixed cost per unit will decrease. 
A) Total fixed costs will increase. 
B) Total fixed costs will decrease. 
C) Fixed cost per unit will increase. 
D) Fixed cost per unit will decrease.

Question 10

Performance reports are used for control purposes.

Accepted Answer

A) True 
 B)False

Question 11

A company has a cost that is $3.00 per unit at a volume of 9,000 units and $3.00 per unit at a volume of 11,000 units.What type of cost is this?

Accepted Answer

A) Fixed 
B) Variable 
C) Sunk 
D) Noncontrollable 
A) Fixed 
B) Variable 
C) Sunk 
D) Noncontrollable

Question 12

Rincon Gifts had the following costs in May when 400 ceramic pots were produced: materials, $4,200; hourly labor, $1,600; depreciation, $800; rent, $700; and other fixed costs, $500.If the production level changes to 500 units, how much will the total costs be?

Accepted Answer

A) $9,750 
B) $7,800 
C) $9,250 
D) $1,950 
A) $9,750 
B) $7,800 
C) $9,250 
D) $1,950

Question 13

The actions of a manager are influenced by the performance measures that are used to evaluate the manager.

Accepted Answer

A) True 
 B)False

Question 14

Managerial accounting

Accepted Answer

A) is primarily directed at external users of accounting information. 
B) is required by taxing authorities such as the IRS. 
C) must follow GAAP. 
D) focuses on future performance. 
A) is primarily directed at external users of accounting information. 
B) is required by taxing authorities such as the IRS. 
C) must follow GAAP. 
D) focuses on future performance.

Question 15

Which of the following is most likely to be a fixed cost?

Accepted Answer

A) Cost of wheels for a lawn mower manufacturer 
B) Rent on a factory building 
C) Cost of labor for cashiers at a retail store 
D) Supplies used by the housekeeping staff that cleans hotel rooms 
A) Cost of wheels for a lawn mower manufacturer 
B) Rent on a factory building 
C) Cost of labor for cashiers at a retail store 
D) Supplies used by the housekeeping staff that cleans hotel rooms

Question 16

Variable cost per unit is budgeted to be $8.00 and fixed cost per unit is budgeted to be $5.00 in a period when 4,000 units are produced.If production is actually 5,100 units, what is the expected total cost of the units produced?

Accepted Answer

A) $52,000 
B) $60,800 
C) $66,300 
D) $40,800 
A) $52,000 
B) $60,800 
C) $66,300 
D) $40,800

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

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 19

If management informs employees that bonuses will depend solely on improving the gross profit ratio (gross profit/sales), which of the following behaviors would most likely be observed?

Accepted Answer

A) Sales people would quit trying to sell high volume, low margin core products 
B) Overall sales would fall 
C) Overall gross profit would fall 
D) All of these answer choices are correct 
A) Sales people would quit trying to sell high volume, low margin core products 
B) Overall sales would fall 
C) Overall gross profit would fall 
D) All of these answer choices are correct

Question 20

A good code of ethics eliminates potential unethical behavior.

Accepted Answer

A) True 
 B)False

A thorough understanding of managerial accounting is essential to be an effective manager.

Which of the following is true concerning Enterprise Resource Planning (ERP) systems?

Opportunity costs are

Variable cost per unit remains constant when the number of units produced changes.

Which of the following is not a reasonable measure of a plant manager's performance?

Which of the following is not usually a responsibility of the controller?

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

Bagel Time produced and sold 2,500 bagels last month and incurred fixed costs totaling $8,000.If production and sales are expected to decrease by 10% next month, which of the following statements is true?

Performance reports are used for control purposes.

A company has a cost that is $3.00 per unit at a volume of 9,000 units and $3.00 per unit at a volume of 11,000 units.What type of cost is this?

Rincon Gifts had the following costs in May when 400 ceramic pots were produced: materials, $4,200; hourly labor, $1,600; depreciation, $800; rent, $700; and other fixed costs, $500.If the production level changes to 500 units, how much will the total costs be?

The actions of a manager are influenced by the performance measures that are used to evaluate the manager.

Managerial accounting

Which of the following is most likely to be a fixed cost?

Variable cost per unit is budgeted to be $8.00 and fixed cost per unit is budgeted to be $5.00 in a period when 4,000 units are produced.If production is actually 5,100 units, what is the expected total cost of the units produced?

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

Which of the following statements regarding performance measures is true?

If management informs employees that bonuses will depend solely on improving the gross profit ratio (gross profit/sales), which of the following behaviors would most likely be observed?

A good code of ethics eliminates potential unethical behavior.

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

Analyzing Financial Statements: a Managerial Perspective

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Exam 1: Managerial Accounting in the Information Age

A thorough understanding of managerial accounting is essential to be an effective manager.

Which of the following is true concerning Enterprise Resource Planning (ERP) systems?

Opportunity costs are

Variable cost per unit remains constant when the number of units produced changes.

Which of the following is not a reasonable measure of a plant manager's performance?

Which of the following is not usually a responsibility of the controller?

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

Bagel Time produced and sold 2,500 bagels last month and incurred fixed costs totaling $8,000.If production and sales are expected to decrease by 10% next month, which of the following statements is true?

Performance reports are used for control purposes.

A company has a cost that is $3.00 per unit at a volume of 9,000 units and $3.00 per unit at a volume of 11,000 units.What type of cost is this?

Rincon Gifts had the following costs in May when 400 ceramic pots were produced: materials, $4,200; hourly labor, $1,600; depreciation, $800; rent, $700; and other fixed costs, $500.If the production level changes to 500 units, how much will the total costs be?

The actions of a manager are influenced by the performance measures that are used to evaluate the manager.

Managerial accounting

Which of the following is most likely to be a fixed cost?

Variable cost per unit is budgeted to be $8.00 and fixed cost per unit is budgeted to be $5.00 in a period when 4,000 units are produced.If production is actually 5,100 units, what is the expected total cost of the units produced?

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

Which of the following statements regarding performance measures is true?

If management informs employees that bonuses will depend solely on improving the gross profit ratio (gross profit/sales), which of the following behaviors would most likely be observed?

A good code of ethics eliminates potential unethical behavior.

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

Analyzing Financial Statements: a Managerial Perspective

Filters