1) Both managerial and financial accounting are governed by GAAP a) True
2) Management accounting information is only used by manufacturing organizations. a) True
3) The managerial activity of monitoring a plan’s implementation and taking corrective action as needed is referred to as decision-making. a) True
4) Expired costs are called assets.
5) A cost object is any item such as products, customers, departments, regions, and so on, for which costs are measured and assigned. a) True
6) Period costs are those costs associated with the manufacture of goods or the providing of services. a) True
7) Research and development costs would be classified as non-production costs. a) True
8) Production costs include direct materials, direct labor, and selling costs. a) True
9) Employees who convert direct materials into a product or who provide a service to customers are classified as direct labor. a) True
10) Any costs associated with storing, selling, and delivering the product are classified as period costs. a) True
11) Prime cost is the sum of indirect materials and indirect labor. a) True
12) Product costs are carried in inventory until the goods are finished. a) True
13) Marketing costs would be classified as period costs.
14) The cost of janitorial services for a factory building would be classified as direct labor. a) True
15) The revenue per unit is called price.
16) A variable cost is one that increases as output increases and decreases as output decreases. a) True
17) A fixed cost is a cost that does not increase as output increases and does not decrease as output decreases. a) True
18) An opportunity cost is the benefit given up or sacrificed when one alternative is chosen over another a) True
19) Which of the following is not an objective of Management accounting? A) To prepare external reports for investors, creditors, government agencies, and other outside users B) To provide information for costing of services, products, and other objects of interest to management. C) To provide information for planning, controlling, evaluating and continuous improvement. D) To provide information for decision making.
20) Which of the following would be a production cost?
A) salary of chief executive officer
B) indirect labor
C) advertising costs
D) depreciation on office building
21) The break-even point is the point where
A) total sales are greater than total cost
B) total sales equal total cost
C) fixed costs equals variable costs
D) total sales are less than total cost
E) fixed costs are less than variable costs
22) Total contribution margin divided by sales revenue is A) variable cost ratio
B) fixed cost ratio
C) contribution margin ratio
D) sales ratio
E) degree of operating leverage
23) Which statement is not true about cost-volume profit (CVP) analysis? A) CVP analysis is a powerful tool for planning and decision making. B) CVP analysis allows managers to do sensitivity analysis by examining the impact of various prices or costs on profit. C) CVP analysis shows how revenues, expenses, and profits behave as volume changes. D) CVP analysis can be used in both single-product and multi-product firms. E) All statements are true.
24) Melody Company sells a product for $14, variable costs are $10 per unit, and total fixed costs are $5,040. What is the per unit contribution margin? A) $14
25) Melody Company sells a product for $14, variable costs are $10 per unit, and total...
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