Why Is Managerial Accounting Important?

Chapter 01 Managerial Accounting and Cost Concepts Answer Key

True / False Questions

1. Managerial accounting is primarily concerned with the organization as a whole rather than with segments of the organization.
FALSE

AACSB: Reflective Thinking
AICPA BB: Critical Thinking
AICPA FN: Reporting
Bloom's: Knowledge
Learning Objective: 1
Level: Easy

2. Managerial accounting places less emphasis on nonmonetary data than financial accounting.
FALSE

AACSB: Reflective Thinking
AICPA BB: Critical Thinking
AICPA FN: Reporting
Bloom's: Comprehension
Learning Objective: 1
Level: Medium

3. Direct labor is a part of both prime cost and conversion cost.
TRUE

AACSB: Reflective Thinking
AICPA BB: Critical Thinking
AICPA FN: Measurement
A factory supervisor's salary would be classified as a direct cost of a unit of product.
FALSE

AACSB: Reflective Thinking
AICPA BB: Critical Thinking
AICPA FN: Measurement
Bloom's: Knowledge
Learning Objective: 7
Level: Easy

Multiple Choice Questions

18. Managerial accounting:
A. has its primary emphasis on the future.
B. is required by regulatory bodies such as the SEC.
C. focuses on the organization as a whole, rather than on the organization's segments.
D. Responses a, b, and c are all correct.

AACSB: Reflective Thinking
AICPA BB: Critical Thinking
AICPA FN: Reporting
Bloom's: Knowledge
Learning Objective: 1
Level: Easy

19. The plans of management are expressed formally in:
A. the annual report to shareholders.
B. Form 10-Q submitted to the Securities and Exchange Commission.
C. performance reports.
D. budgets.

AACSB: Reflective Thinking
AICPA BB: Critical Thinking
AICPA FN: Reporting
Bloom's: Knowledge
Learning Objective: 1
Level: Easy

20. Which of the following IS a characteristic of financial accounting?
A. not mandatory
B. must follow
The conversion cost for June was:
A. $95,000
B. $140,000
C. $93,000
D. $152,000

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AACSB: Analytic
AICPA BB: Critical Thinking
AICPA FN: Measurement
Bloom's: Application
Learning Objective: 2
Level: Medium

74. The prime cost for June was:
A. $95,000
B. $93,000
C. $81,000
D. $55,000

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AACSB: Analytic
AICPA BB: Critical Thinking
AICPA FN: Measurement
Bloom's: Application
Learning Objective: 2
Level: Medium

The following data (in thousands of dollars) have been taken from the accounting records of Karlana Corporation for the just completed year.

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75. The cost of the raw materials used in production during the year (in thousands of dollars) was:
A. $180
B. $40
C. $120
D. $160

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AACSB: Analytic
AICPA BB: Critical Thinking
AICPA FN: Measurement
Bloom's: Application
Learning Objective: 3
Learning Objective: 4
Learning Objective: 5
Level: Medium

76. The cost of goods manufactured (finished) for the year (in thousands of dollars) was:
A. $530
B. $520
C. $500
D. $460

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AACSB: Analytic
AICPA BB: Critical Thinking
AICPA FN: