TEST BANK MANAGEMENT ACCTG. – 1

Mgt. Acctg. Environment 1. Management Accounting TEST BANK MANAGEMENT ACCTG. – 1 2. Management accounting is an integral part of the management process. As such, it provides essential information for the following objectives except 3. The chief management accountant called “controller” traditionally performs these functions except 6. Management accountants help design, develop, install and maintain reporting systems which are aligned with the structures of the organization. These systems provide information that are useful for decision making. Management decision processes fall into three categories. 7. In this element of internal control, the object is to gauge the efficiency of the various levels of people in the organization as well as the quality and quantity of results. 12. You are newly appointed as controller of ABC Corporation. Among the jobs your department would do, include the following: 15. Which of the following characteristics does not relate to management accounting? 22. The activities in a management system’s control process can be grouped into four: 1. Measurement of actual performance 2. Deciding and implementing corrective action. 3. Determining standards of performance. 4. Comparing actual performance versus standards and analyzing results. The above steps must be done in this sequence: 23. The concept of “management by exception” refers to management’s 28. A type of managerial accounting that refers to the determination of the cost of products and services regardless of whether they are variable or non­variable is known as 29. A type of managerial accounting that refers to the determination of the operating cost regardless of cost behavior is COSTS CONCEPTS, CLASSIFICATION AND SEGREGATION 1. The term relevant cost applies to all the following decision situations except the 2. A decision­making concept, described as “the contribution to income that is foregone by not using a limited source for its best alternative use.” is called 5. The term that refers to costs incurred in the past that are not relevant to a future decision is Q 5­7 are based on the following information. Management accountants are frequently asked to analyze various decision situations including the following: I. The cost of a special device that is necessary if a special order is accepted. II. The cost proposed annually for the plant service for the grounds at corporate headquarters. III. Joint production cost incurred to be considered in a sell­at­split versus a process­further decision. IV. The cost of alternative use of plant space to be considered in a make­or­buy decision. V. The cost of obsolete inventory acquired several years ago, to be considered in a keep­ versus­disposal decision. The cost described in situations I and IV are The costs described in situations III and V are The cost describe in II is a 8. Management accountants are concerned with incremental unit costs. These costs are similar to the following, except 9. Opportunity costs are 10. Cost of goods sold is a component of the income statement. In a merchandising establishment, this refers to purchases adjusted for changes in inventory. In a manufacturing company, what replaced purchases to arrive at cost of goods sold? 14. When all manufacturing cost used in production are attached to the products, whether direct, or indirect, variable or fixed, this is called 15. Al­kris Company uses a regression equation to analyze the behavior of its transportation costs (T) as a function of travel time (H). They developed the following equation using two years’ observation with a related coefficient of determination of 85: T= 100,000 + P50H If 500 hours of travel time were logged in one period, the related point estimate of total transportation costs would be 16. These are among the methods of segregating fixed cost and variable costs except 17. Dongian, Inc. is preparing a flexible budget for the next year and requires a breakdown of the cost of steam used in its factory into the fixed and variable elements. The following data on the cost of steam used and direct labor hours worked are available for the last 6 months of this year. Month Cost of Steam Direct Labor Hours Assuming that Dongian uses the high­low method of analysis. The estimated variable cost of steam per direct labor hour is: A What is the amount of fixed cost? A 19. Mark Company estimates handling costs at two activity levels as follows: Kilos handled Cost 80,000 P160,000 60,000 132,000 What is Mark’s estimated cost of handling 75,000 kilos? A 20. The total production cost for 20,000 units was P21,000 and the total production cost for making 50,000 units was P34,000. Once production exceeds 25,000 units, additional fixed costs of P4,000 were incurred. The full production cost per unit for making 30,000 units is: 23. For the six months of the year, the highest level of activity for MDG Corporation was 18,000 full units of production with maintenance cost at P114,000 and its lowest level of activity for the same period was at 14,000 full units of production with maintenance cost at P94,000. What amount of maintenance cost should MDG expect in a month in which it was scheduled 16,000 equivalent full units of production. 24. Simple regression analysis provides the means to evaluate a line of regression, which is fitted to a plot of data and represents 25. The slope of the line of regression is ........................................continued..............................................