A306 FINAL EXAM
An effective performance evaluation will do what? - CORRECT ANSWER-Reward
behavior that benefits the company and will include multiple performance measures
A company provides the following info:Material price variance: 800F, Material
spending variance: 250FBudgeted material/unit: 1.5 ft, Budgeted material price:
$6/ftActual units produced: 100, Budgeted units produced: 120
What is the material quantity variance? - CORRECT ANSWER-$550 U
SQA: 100units*1.5ft = 150ft*$6=$900Mat Spending Var = Mat Qty Var + Mat Price
Var250F = X + 800FMat Qty Var = 550U
Disadvantage of NPV method. - CORRECT ANSWER-Can not compare projects
with different initial investments.
If fixed costs are $15,000 and variable costs are $4/unit, what are the break even
units if each unit sells for $10? - CORRECT ANSWER-2500 units
What is a disadvantage of using residual income as a performance indicator? -
CORRECT ANSWER-It favors large divisions
Who uses management accounting and analysis? - CORRECT ANSWER-ALL
business students, ALL managers
Managers use data to: - CORRECT ANSWER-Plan, control, and make decisions
How is management accounting more than just numbers? (6) - CORRECT
ANSWER--Ethics
-strategy: game plan
-risk management
-social responsibility: balance needs of all
-process management: value chain
- leadership
Management accounting - CORRECT ANSWER-the process of analyzing business
costs and operations to prepare internal financial report, records, and account to aid
managers' decision making process in achieving business goals
Who are the decision makers outside the company (3) - CORRECT ANSWER-1.
Investors
2. Banks/lenders/creditors
3. Govt agencies/regulators
4 audited stmts in financial accounting - CORRECT ANSWER-1. Balance sheet
,2. Income statement
3. Stmt cash flows
4. Retained earnings
Who are the decision makers inside the company: (3) - CORRECT ANSWER-1.
Executives
2. Dept managers
3. Employees
Purpose of management accounting: - CORRECT ANSWER-1. Planning - set goals,
how to achieve
2. Control - feedback
3. Decision making
Which of the following statements is false:
a. Creditors would be a user of financial accounting information
b. Management accounting information is used to develop budgets
c. Financial accounting information emphasizes decisions for the future
d. Reports based on management accounting information are created when required
- CORRECT ANSWER-C - that's managerial accounting
Which best describes management accounting?
A. Management accounting is mainly focused on past results
b. Management accounting reports are rules based using GAAP
c. The main users of mgmt acc info are outside the firm
d. Management accounting reports are prepared following the National management
accounting standards
E. Management account is primarily used for decision making - CORRECT
ANSWER-E
Planning (2) - CORRECT ANSWER-- involves developing goals and
- preparing various budgets to achieve those goals
Control (3) - CORRECT ANSWER-- involves gathering feedback to ensure the plan
is working
- making changes as needed
- verifying all parts of the organization are working together toward the goals
Make decisions - CORRECT ANSWER-Have a competitive advantage
NOI = - CORRECT ANSWER-REV - COSTS
Names for indirect costs - CORRECT ANSWER-Shared, allocated, common costs
, If he cost in the smallest circle is D... - CORRECT ANSWER-It stays direct as you
get bigger
If cost in smallest circle is indirect... - CORRECT ANSWER-It flips to direct and will
stay direct
Are mfg and non mfg costs only direct? - CORRECT ANSWER-Can be direct or
indirect! Depends on cost object
What does the cost object determine - CORRECT ANSWER-If a cost is direct or
indirect
What is the purpose of prime and conversion costs? - CORRECT ANSWER-To
gauge efficiency!
Conversion costs - CORRECT ANSWER-Gauge efficiency of production process
(DL+MOH)
Prime costs - CORRECT ANSWER-Helps set selling price to achieve required profits
(DM +DL)
To be a prime or conversion cost, it must be a... - CORRECT
ANSWER-MANUFACTURING COST
Which of the following statements is false:
a. Prime costs are always direct costs
b. Manufacturing costs can be direct or indirect
c. Selling and admin costs are only indirect
d. Direct labor is both a prime cost and a conversion cost - CORRECT ANSWER-C
Manufacturing costs include manufacturing overhead which are all... - CORRECT
ANSWER-Indirect costs BUT selling and admin can be either
Balance sheets report only: - CORRECT ANSWER-PRODUCT COSTS (inventory)
Income stmt reports both: - CORRECT ANSWER-PRODUCT (COGS) AND PERIOD
COSTS (SG&A)
Manufacturing costs = - CORRECT ANSWER-Product costs
Non manufacturing costs = - CORRECT ANSWER-Period costs
Are period costs inventoriable? - CORRECT ANSWER-NO! Only product costs are
An effective performance evaluation will do what? - CORRECT ANSWER-Reward
behavior that benefits the company and will include multiple performance measures
A company provides the following info:Material price variance: 800F, Material
spending variance: 250FBudgeted material/unit: 1.5 ft, Budgeted material price:
$6/ftActual units produced: 100, Budgeted units produced: 120
What is the material quantity variance? - CORRECT ANSWER-$550 U
SQA: 100units*1.5ft = 150ft*$6=$900Mat Spending Var = Mat Qty Var + Mat Price
Var250F = X + 800FMat Qty Var = 550U
Disadvantage of NPV method. - CORRECT ANSWER-Can not compare projects
with different initial investments.
If fixed costs are $15,000 and variable costs are $4/unit, what are the break even
units if each unit sells for $10? - CORRECT ANSWER-2500 units
What is a disadvantage of using residual income as a performance indicator? -
CORRECT ANSWER-It favors large divisions
Who uses management accounting and analysis? - CORRECT ANSWER-ALL
business students, ALL managers
Managers use data to: - CORRECT ANSWER-Plan, control, and make decisions
How is management accounting more than just numbers? (6) - CORRECT
ANSWER--Ethics
-strategy: game plan
-risk management
-social responsibility: balance needs of all
-process management: value chain
- leadership
Management accounting - CORRECT ANSWER-the process of analyzing business
costs and operations to prepare internal financial report, records, and account to aid
managers' decision making process in achieving business goals
Who are the decision makers outside the company (3) - CORRECT ANSWER-1.
Investors
2. Banks/lenders/creditors
3. Govt agencies/regulators
4 audited stmts in financial accounting - CORRECT ANSWER-1. Balance sheet
,2. Income statement
3. Stmt cash flows
4. Retained earnings
Who are the decision makers inside the company: (3) - CORRECT ANSWER-1.
Executives
2. Dept managers
3. Employees
Purpose of management accounting: - CORRECT ANSWER-1. Planning - set goals,
how to achieve
2. Control - feedback
3. Decision making
Which of the following statements is false:
a. Creditors would be a user of financial accounting information
b. Management accounting information is used to develop budgets
c. Financial accounting information emphasizes decisions for the future
d. Reports based on management accounting information are created when required
- CORRECT ANSWER-C - that's managerial accounting
Which best describes management accounting?
A. Management accounting is mainly focused on past results
b. Management accounting reports are rules based using GAAP
c. The main users of mgmt acc info are outside the firm
d. Management accounting reports are prepared following the National management
accounting standards
E. Management account is primarily used for decision making - CORRECT
ANSWER-E
Planning (2) - CORRECT ANSWER-- involves developing goals and
- preparing various budgets to achieve those goals
Control (3) - CORRECT ANSWER-- involves gathering feedback to ensure the plan
is working
- making changes as needed
- verifying all parts of the organization are working together toward the goals
Make decisions - CORRECT ANSWER-Have a competitive advantage
NOI = - CORRECT ANSWER-REV - COSTS
Names for indirect costs - CORRECT ANSWER-Shared, allocated, common costs
, If he cost in the smallest circle is D... - CORRECT ANSWER-It stays direct as you
get bigger
If cost in smallest circle is indirect... - CORRECT ANSWER-It flips to direct and will
stay direct
Are mfg and non mfg costs only direct? - CORRECT ANSWER-Can be direct or
indirect! Depends on cost object
What does the cost object determine - CORRECT ANSWER-If a cost is direct or
indirect
What is the purpose of prime and conversion costs? - CORRECT ANSWER-To
gauge efficiency!
Conversion costs - CORRECT ANSWER-Gauge efficiency of production process
(DL+MOH)
Prime costs - CORRECT ANSWER-Helps set selling price to achieve required profits
(DM +DL)
To be a prime or conversion cost, it must be a... - CORRECT
ANSWER-MANUFACTURING COST
Which of the following statements is false:
a. Prime costs are always direct costs
b. Manufacturing costs can be direct or indirect
c. Selling and admin costs are only indirect
d. Direct labor is both a prime cost and a conversion cost - CORRECT ANSWER-C
Manufacturing costs include manufacturing overhead which are all... - CORRECT
ANSWER-Indirect costs BUT selling and admin can be either
Balance sheets report only: - CORRECT ANSWER-PRODUCT COSTS (inventory)
Income stmt reports both: - CORRECT ANSWER-PRODUCT (COGS) AND PERIOD
COSTS (SG&A)
Manufacturing costs = - CORRECT ANSWER-Product costs
Non manufacturing costs = - CORRECT ANSWER-Period costs
Are period costs inventoriable? - CORRECT ANSWER-NO! Only product costs are
