Management Accounting

30 Questions | Total Attempts: 45

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Account Management Quizzes & Trivia

MULTI CHOICE


Questions and Answers
  • 1. 
    An accelerated need for refined cost system is due to
    • A. 

      Global monopolies

    • B. 

      Rising prices

    • C. 

      Intenese competition

    • D. 

      A shift towards increased direct costs

  • 2. 
    The use of a single indirect-cost tate is more likely to
    • A. 

      Undercost high-volume simple products

    • B. 

      Undercost low volume complex products

    • C. 

      Undercost lower priced products

    • D. 

      Both B and C are correct

  • 3. 
    ABC can elimated cost distortions because ABC:
    • A. 

      Develops cost drivers that have a cause and effect relationship with the activities performed

    • B. 

      Establishes multiple cost pools

    • C. 

      Eliminates product variations

    • D. 

      Recongnizes interactions between different departments in assigning support costs

  • 4. 
    Dalrymple Company produces a special spray nozzle. The budgeted indirect total cost of inserting the spray nozzle is $80 000. The budgeted number of nozzles to be inserted is 40 000. What is the budgeted indirect cost allocation rate for this activity?
    • A. 

      $0.50

    • B. 

      $1.00

    • C. 

      $1.50

    • D. 

      $2.00

  • 5. 
    A well designed ABC system helps managers make better decisions because information derived from an ABC analysis:
    • A. 

      Can be used to elimate non value added activities

    • B. 

      Is easy to analyze and interpret

    • C. 

      Takes the choice and judgement challenges away from the managers

    • D. 

      Emphasizes how managers can achieve higher sales

  • 6. 
    Obsolescence is an example of which cost catergory?
    • A. 

      Carrying costs

    • B. 

      Labor costs

    • C. 

      Ordering costs

    • D. 

      Quality costs

  • 7. 
    The costs associated with storage are an example of which cost catergory?
    • A. 

      Quality costs

    • B. 

      Labor costs

    • C. 

      Ordering costs

    • D. 

      Carrying costs

  • 8. 
    The purchase order lead time is the
    • A. 

      Difference between the times an order is placed and delivered

    • B. 

      Difference between the products ordered and the products received

    • C. 

      Discrepancies in purchase orders

    • D. 

      Time required to correct errors in the products received

  • 9. 
    Which of the following statements about the EOQ decision model is FALSE?
    • A. 

      It assumes purchasing costs are relevant when the cost per unit changes due to the quantity ordered

    • B. 

      It assumes quality costs are irrelevant if qulaity is unaffected by the number of units purchased.

    • C. 

      It assumes stockout costs are irrelevant if no stockouts occur

    • D. 

      It assums ordering costs are carrying costs are relevant

  • 10. 
    The formal mangement control system includes
    • A. 

      Performace measures

    • B. 

      Mutual commitments

    • C. 

      Incentive plans

    • D. 

      Both A and C are correct

  • 11. 
    A disadvantage of decentralization is that it
    • A. 

      Creates greater resposiveness to local needs

    • B. 

      Focuses manager's attention on the organization as a whole

    • C. 

      Does not result in a duplication of activities

    • D. 

      Encourages suboptimal decision making

  • 12. 
    A transfer pricing method leads to goal congruence when managers
    • A. 

      Always act in their own best interest

    • B. 

      Act in their own best interest and the decision is in the long term best interest of the manager's subunit

    • C. 

      Act in their own best interest and the decision is in the long term best interest of the company

    • D. 

      Act in their own best interest and the decision is in the short term best interest of the company

  • 13. 
    Negotiated transfer prices are often employed when
    • A. 

      Market prices are stable

    • B. 

      Market prices are volatile

    • C. 

      Market prices change be a regular percentae each year

    • D. 

      Goal congruence is not a major objective

  • 14. 
    Assume 200 barrels are transferred from the Production Division for a transfer price of $6 per barrel. The Refining Divsion sells the 200 barrels at a price of $40 each to customers. What is the operating income of both divisions together? answer a
    • A. 

      X

    • B. 

      X

    • C. 

      X

    • D. 

      X

  • 15. 
    An organisation that is using the cost leadership approach would
    • A. 

      Incur cost for innovative R & D

    • B. 

      Provide products at a higher cost than competitors

    • C. 

      Focus on productivity through efficiency improvements

    • D. 

      Bring products to market rapidly

  • 16. 
    __________ is the fundamental rethinking and redesign of business processes to achieve improvements in critical measures of performance such as cost, quality, speed and customer satisfaction
    • A. 

      Strategy

    • B. 

      Customer perspective

    • C. 

      Learning and growth perspective

    • D. 

      Reengineering

  • 17. 
    The FIRST step to successful balanced scorecard implementation is clarifying the
    • A. 

      Organisation's visions and strategy

    • B. 

      Elements that pertain to value added aspects of the business

    • C. 

      Owner's expectations about return on investment

    • D. 

      Objectives of all four balanced scorecard measurement perspectives

  • 18. 
    The balanced scorecard is said to be "balanced" because it measures
    • A. 

      Short term and long term objectives

    • B. 

      Financial and non financial objectives

    • C. 

      Interenal and external objectives

    • D. 

      All of these answers are correct

  • 19. 
    An operating income analyis of Deb Schmidt Incorporated revealed the following: Operating Income for 2005                     $500 000 Add growth component                                15 000 Add price recovery component                100 000 Deduct productivity component                    (8 000) Operating income for 2006                        $607 000 Scmidt's operating income gain is consistent with the:
    • A. 

      Product differentation strategy

    • B. 

      Downsizing strategy

    • C. 

      Reengineering strategy

    • D. 

      Cost leadership strategy

  • 20. 
    Succesful implementation of a cost leadership strategy will result in:
    • A. 

      Large favourable growth and price recovery components

    • B. 

      Large favourable price recovery and productivity components

    • C. 

      Large favourable productivity and growth components

    • D. 

      Only a large favourable growth component

  • 21. 
    The stage of the capital budgeting process in which projects get underway and performance in monitored is the
    • A. 

      Implement the decisions, evaluate performance, and learn stage

    • B. 

      Make predictions stage

    • C. 

      Identify projects stage

    • D. 

      Management control stage

  • 22. 
    The two factors captial budgeting emphasizes are
    • A. 

      Qualitative and nonfinancial

    • B. 

      Quantitative and nonfinancial

    • C. 

      Quanitative and financial

    • D. 

      Qualitative and financial

  • 23. 
    The capitla budgeting method which calculates the expected monetary gain or loss from a project by discounting all expected future cash inflows and outflows to the present point in time using the require rate of return is the
    • A. 

      Payback method

    • B. 

      Accurual accounting rate of return

    • C. 

      Sensitivity method

    • D. 

      Net present value method

  • 24. 
    Which capital budgeting technique(s) measure all expected future cash inflows and outflows as if the occured at a single point in time?
    • A. 

      Net present value

    • B. 

      Internal rate of return

    • C. 

      Payback

    • D. 

      Both A and B

  • 25. 
    NPV is calculated using the
    • A. 

      Internal rate of return

    • B. 

      Required rate of return

    • C. 

      Rate of return required by the investment bankers

    • D. 

      None of these answers are correct