Exam 15: Management Accounting and Cost Concepts

Good management accounting is motivated by:

The Zig-Zag Company manufactures zippers for many clothing manufacturers. Costs for the year were direct materials, $5,000; indirect materials, $1,600; direct labor, $12,000; and indirect labor, $4,000. Additional expenses for the year were factory utilities $3,500; depreciation of factory equipment, $1,300; advertising expense, $900; delivery expense on sales to customers, $1,700; and property taxes on factory buildings, $5,200. Which amount is the company's manufacturing overhead for the year?

Mega Manufacturing has defective inventory on hand, which cost $27,000 to manufacture. The company can sell the defective inventory as is for $18,000 or rework the units at a cost of $12,000 and sell the inventory for $26,000. The sunk cost and the opportunity cost of selling the inventory as is (rather than rework the units) are: Sunk Cost Opportunity Cost

Which management function analyzes results, rewards performance and identifies problems?

If total cost stays the same, even though the production level has risen, the cost is a(n):

In constructing a custom cabinet, an indirect material would be:

You currently work as a school bus driver. Your salary is $28,000 per year. You are thinking about quitting your job and going back to college. It will take you two years to obtain your college degree. Tuition and other costs of the education will total $24,000. You also intend to keep your car by making the $250 per month payments out of your savings. How much is the opportunity cost of going to college?

All of the following are involved in the management function of planning EXCEPT:

During the quarter, Iris Company sold 100,000 units at $5 per unit to break even. Iris had $150,000 in fixed costs. What was variable cost per unit for the quarter?

You are thinking about taking a trip to Asia. The cost of the airplane ticket you have yet to purchase is a(n):

Which of the following would most likely be an indirect cost?

Tulip Company is a tulip bulb distributor. Every year, Tulip Company plants an outdoor show garden where visitors can see all the varieties of tulips. The garden is open only during the month of April. The original cost to design and landscape the tulip garden is $300,000. Five employees work each day the garden is open. Each employee is paid hourly at a rate of $10 per hour and works for 8 hours each day. Tulip Company pays annual expenses of $1,000 for utilities on the garden property, $800 for property taxes, and $1,200 for insurance on the property. Tulip Company has found that it generally costs $50 per every 100 visitors to upkeep, repair, and maintain the gardens.

Operational budgeting is:

Costs that do NOT change as the result of a future decision are known as:

The Zig-Zag Company manufactures zippers for many clothing manufacturers. Costs for the year were direct materials, $5,000; indirect materials, $1,600; direct labor, $12,000; and indirect labor, $4,000. Additional expenses for the year were factory utilities $3,500; depreciation of factory equipment, $1,300; advertising expense, $900; delivery expense on sales to customers, $1,700; and property taxes on factory buildings, $5,200. Which amount is total manufacturing costs for the year?

Which of the following is NOT a fixed cost?

The primary internal users of accounting information are:

Utility expense in a merchandising company would be considered a(n):