Managerial Accounting

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Managerial Accounting

Study guide for test # 1 in managerial accounting, chapters 1-3.


Questions and Answers
  • 1. 
    • A. 

      It integrates traditional accounting information systems with other information systems.

    • B. 

      It can be customized to provide specific and relevant information to different types of users.

    • C. 

      It has evolved in the past few years to address the shortcomings of traditional accounting information systems.

    • D. 

      It captures quantitative but not qualitative information.

  • 2. 
    ERP systems capture:
    • A. 

      Only qualitative data

    • B. 

      Only quantitative data

    • C. 

      Both qualitative and quantitative data

    • D. 

      The same information as a traditional accounting system

  • 3. 
    An example of QUALITATIVE data is:
    • A. 

      Product cost

    • B. 

      Customer satisfaction

    • C. 

      Net income

    • D. 

      Operating costs

  • 4. 
    Which of the following is NOT an example of an external user of accounting information
    • A. 

      Potential and existing stockholders

    • B. 

      Government taxing agencies

    • C. 

      Potential and existing creditors

    • D. 

      Management

  • 5. 
    ________ involves the development of short-term objectives and goals.
    • A. 

      Controlling activities

    • B. 

      Strategic planning

    • C. 

      Operational Planning

    • D. 

      Financial Activities

  • 6. 
    • A. 

      Finance manager

    • B. 

      Operations/Production manager

    • C. 

      Marketing Manager

    • D. 

      Human resource manager

  • 7. 
    • A. 

      Human resource manager

    • B. 

      Operations/production manager

    • C. 

      Finance manager

    • D. 

      Marketing manager

  • 8. 
    • A. 

      Finance manager

    • B. 

      Operations/production manager

    • C. 

      Human resource manager

    • D. 

      Marketing manager

  • 9. 
    The primary role of a managerial accountant is to:
    • A. 

      Enter data into the accounting system

    • B. 

      Collect data

    • C. 

      Analyze information and create knowledge

    • D. 

      Prepare tax returns

  • 10. 
    Decision-makers should consider:
    • A. 

      Only qualitative factors

    • B. 

      Only quantitative factors

    • C. 

      Both quantitative and qualitative factors

    • D. 

      Sunk costs as well as quantitative and qualitative factors

  • 11. 
    When making a decision, which of the following should NOT be considered?
    • A. 

      Relevant costs

    • B. 

      Opportunity costs

    • C. 

      Sunk costs

    • D. 

      Risk

  • 12. 
    Under ideal conditions, companies operating in a _________ environment would reduce inventories of raw materials, work-in-process and finish goods to very low levels or even zero.
    • A. 

      Service

    • B. 

      Just-in-time

    • C. 

      Traditional manufacturing

    • D. 

      Merchandising

  • 13. 
    In general, costs incurred in the factory that do not qualify as either direct or indirect labor are called:
    • A. 

      Manufacturing costs

    • B. 

      Manufacturing overhead

    • C. 

      Non-manufacturing costs

    • D. 

      Selling and administrative costs

  • 14. 
    Which of the following types of employees would most likely have their wage classified as direct labor?
    • A. 

      Factory maintenance worker

    • B. 

      Factory supervisor

    • C. 

      Managerial accountant

    • D. 

      Assembly-line factory worker

  • 15. 
    Which of the following types of employees would most likely have their wage classified as indirect labor?
    • A. 

      Factory supervisor

    • B. 

      Managerial accountant

    • C. 

      Salesperson

    • D. 

      Machine operator

  • 16. 
    Which of the following typed of companies would LEAST likely have the following cost pattern? Raw Materials -> Work in process -> finished goods -> cost of goods sold
    • A. 

      Tire manufacturer

    • B. 

      Computer software manufacturer

    • C. 

      Retailer/merchandiser

    • D. 

      Construction company

  • 17. 
    When manufacturing costs are subtracted from gross margin, the result is called:
    • A. 

      Cost of goods sold

    • B. 

      Net income

    • C. 

      Sales

    • D. 

      Nonmanufacturing income

  • 18. 
    The key to allocating overhead costs is the determination of the _________
    • A. 

      Overhead

    • B. 

      Cost driver

    • C. 

      Direct labor

    • D. 

      Product cost

  • 19. 
    Which of the following would probably NOT be a cost driver in a manufacturing environment?
    • A. 

      Machine hours

    • B. 

      Direct labor hours

    • C. 

      Direct labor cost

    • D. 

      Indirect labor hours

  • 20. 
    • A. 

      As the number of diverse products a company makes increases, the likleihood that a plantwide overhead rate will be accurate increases

    • B. 

      Plantwide overhead rates must use machine hours as their cost driver

    • C. 

      As the number of diverse products a company makes increases, the likelihood that a company will replace a plantwide overhead rate with a departmental overhead rate increases

    • D. 

      Plantwide overhead rates are usually more costly to prepare than a departmental overhead rate