Question 1

If the report is urgently needed,it is sometimes necessary to sacrifice accuracy in the interest of
A)timeliness
B)personal feelings.
C)profits.
D)expectations.

Accepted Answer

If the report is urgently needed, timeliness becomes a priority over accuracy. It may be better to provide the information as quickly as possible, even if it is not entirely accurate, and update or correct it later.

Question 2

Which of the following represents normal cost measurement?
A)Actual Direct Materials + Actual Direct Labor + Actual Overhead
B)Actual Direct Materials + Actual Direct Labor + Estimated Overhead
C)Estimated Direct Materials + Estimated Direct Labor + Actual Overhead
D)Actual Direct Materials + Estimated Direct Labor + Estimated Overhead

Accepted Answer

Normal cost measurement typically involves the use of actual costs for direct materials and direct labor, combined with an estimated overhead cost. This approach balances the need for accurate cost tracking with the practical difficulties of measuring overhead costs in real-time.

Question 3

Which of the following questions do not dictate a managerial report's format?
A)Who should write the report?
B)To whom should the report be distributed?
C)What is the purpose of the report?
D)What information is needed?

Accepted Answer

The question of who should write the report does not impact the format of the report, as the format will largely depend on the purpose of the report and the information needed to achieve that purpose. The other questions listed can impact the format of the report.

Question 4

Which of the following is not one of the key questions to be addressed when preparing an accounting report?
A)What is audience's familiarity with accounting?
B)What information should be included?
C)When is it due and what method of presentation is best?
D)How long should the information be valid?

Accepted Answer

The key questions when preparing an accounting report typically focus on understanding the audience's knowledge level, determining the necessary information to include, and deciding on the timing and method of presentation. The duration for which the information should remain valid is not typically a primary concern in the preparation of an accounting report, as the report is expected to reflect the financial situation as of a specific date or period.

Question 5

The Finished Goods Inventory and the Cost of Goods Sold for a manufacturing company for the year 2014 are as follows: May 1 Finished Goods Inventory,$470,500;May 31 Finished Goods Inventory,$125,000;Cost of Goods Sold for the year,$1,110,000.The cost of goods manufactured for the month was
A)$1,455,500.
B)$595,500.
C)$985,000.
D)$764,500.

Accepted Answer

The answer of The Finished Goods Inventory and the Cost...

Question 6

Which of the following is exclusive to a production-oriented company?
A)Balance sheet
B)Statement of cash flows
C)Income statement
D)Statement of cost of goods manufactured

Accepted Answer

The Statement of Cost of Goods Manufactured is exclusive to a production-oriented company as it reflects the costs incurred in manufacturing a product, including direct materials, direct labor, and manufacturing overhead. The other financial statements, such as the balance sheet, statement of cash flows, and income statement, are common to all types of companies.

Question 7

Recorded costs for the DC5 Division,which manufactured 6,000 units of Product DC5 during the month,are as follows:  The per-unit cost of manufacturing Product DC5 this month is
A)$163.
B)$152.
C)$170.
D)$150.

Accepted Answer

The answer of Recorded costs for the DC5 Division,which manufactured...

Question 8

Which of the following is the formula used to compute product unit cost?
A)(Direct Materials + Direct Labor)/ Number of Units Produced
B)(Direct Materials + Direct Labor + Overhead)/ Number of Units Produced
C)(Direct Labor + Overhead)/ Number of Units Produced
D)(Indirect Materials + Indirect Labor + Overhead)/ Number of Units Produced

Accepted Answer

Product unit cost includes not just direct materials and direct labor, but also indirect costs like overhead. Therefore, the formula (Direct Materials + Direct Labor + Overhead)/ Number of Units Produced is the most comprehensive and accurate for computing product unit cost.

Question 9

Which of the following activities is not a part of the "perform" stage in the management process?
A)Producing products as per customer specifications
B)Manage supply chain relationships
C)Identifying operating activities that minimize waste
D)Calculating variances by comparing estimated and actual costs

Accepted Answer

Calculating variances by comparing estimated and actual costs is a part of the "control" stage in the management process, not the "perform" stage. The "perform" stage includes activities such as producing products, managing supply chain relationships, and identifying operating activities that minimize waste.

Question 10

The fundamental way in which a company will achieve its goal is described in its
A)balance sheet and income statement.
B)cash flow statement.
C)budget.
D)mission statement.

Accepted Answer

The mission statement describes the fundamental way in which a company will achieve its goal. The balance sheet, income statement, cash flow statement, and budget provide financial information about the company, but do not outline its strategy or approach to achieving its goals.

Question 11

Which of the following is not a stage in the management process?
A)Evaluating
B)Communicating
C)Planning
D)Recording

Accepted Answer

Recording is not a stage in the management process. The stages of the management process are planning, organizing, staffing, directing, and controlling.

Question 12

Which of the following is one of the integrity standards of management accountants?
A)Refraining from accepting hospitality gifts from coworkers
B)Refraining from activities that the company does not actively endorse
C)Avoiding actual or apparent conflicts of interest
D)Avoiding only those conflicts of interest that occur between coworkers

Accepted Answer

One of the integrity standards of management accountants is to avoid actual or apparent conflicts of interest. This means that the accountant should not engage in any activity or situation that could compromise their objectivity or create a perception of impropriety. Refraining from accepting hospitality gifts from coworkers or avoiding activities that the company does not endorse are not necessarily integrity standards, although they may be part of a company's code of conduct. Avoiding conflicts of interest that occur between coworkers only is also not a comprehensive enough standard, as conflicts of interest may arise in many other situations.

Question 13

Steve,the management accountant of a company,is not familiar with the concept of prudence in financial reporting.Which of the following IMA standards is Steve violating?
A)Confidentiality
B)Materiality
C)Disclosure
D)Competence

Accepted Answer

Steve is violating the IMA standard of Competence, which requires management accountants to "maintain an appropriate level of professional expertise by continually developing knowledge and skills." Since Steve is unfamiliar with the concept of prudence, a fundamental principle of financial reporting, he has not maintained an appropriate level of professional expertise.

Question 14

Management accounting activities
A)are synonymous with financial accounting activities.
B)are substitute for the management process.
C)complement the management process.
D)have nothing to do with the management process.

Accepted Answer

Management accounting activities are designed to complement the management process, providing financial information and analyses that support decision-making, planning, and control. They are not synonymous with financial accounting activities, which focus primarily on preparing financial statements for external reporting purposes. They are also not a substitute for the management process, but rather an essential part of it. Therefore, the best choice is C- complement the management process.

Question 15

The credibility standard of management accountants state that management accountants must communicate information fairly and objectively.This means essentially that accountants must perform each task
A)as professionals,possessing the degree of skill of those management accountants who held the position before them.
B)to provide relevant information,both positive and negative,to the recipients of their reports.
C)in conformity with generally accepted accounting principles.
D)to the satisfaction of government regulators.

Accepted Answer

The credibility standard requires management accountants to communicate information fairly and objectively, which means providing relevant information, both positive and negative, to the recipients of their reports. The other options (A, C, and D) are important standards, but do not specifically address the requirement for fair and objective communication.

Question 16

Which of the following account balances is not reported on the balance sheet?
A)Materials Inventory
B)Manufacturing Patents
C)Cost of Goods Sold
D)Work in Process Inventory

Accepted Answer

Cost of Goods Sold is an expense account and is reported on the income statement, not the balance sheet. Materials Inventory, Manufacturing Patents, and Work in Process Inventory are all asset accounts and are reported on the balance sheet.

Question 17

Which cost measurement method calculates product unit cost using estimates for direct materials,direct labor,and overhead?
A)Standard costing
B)Actual costing
C)Full costing
D)Normal costing

Accepted Answer

Standard costing calculates product unit cost using predetermined estimates for direct materials, direct labor, and overhead.

Question 18

The following are costs for a selected period: direct materials used in production,$75,000;direct labor cost of converting materials into product,$150,000;total indirect costs of manufacturing,$45,000.What is the unit cost of manufacturing 30,000 units in this period?
A)$7.50
B)$9.00
C)$6.00
D)$4.00

Accepted Answer

The total manufacturing cost can be calculated by adding the direct materials, direct labor, and total indirect costs: 
$75,000 + $150,000 + $45,000 = $270,000 
Dividing the total manufacturing cost by the number of units produced gives the unit cost: 
$270,000 / 30,000 units = $9.00 per unit. Therefore the answer is B (9.00)

Question 19

Which of the following contains period costs?
A)Work in Process Inventory
B)Finished Goods Inventory
C)Cost of Goods Sold
D)Selling and administrative expenses

Accepted Answer

Period costs include all selling and administrative expenses, such as salaries, advertising, rent, and utilities. These costs are not directly related to producing goods or services and are expensed in the period incurred rather than being included in the cost of goods sold. Work in Process Inventory and Finished Goods Inventory are inventory accounts used to track the costs of producing and storing goods, and Cost of Goods Sold is the expense account used to record the cost of goods sold during a period.

Question 20

The beginning finished goods inventory of Ronald Co.was $480,125.Goods completed during the year cost $963,250.The ending finished goods inventory was dangerously low,having been reduced to $135,850.The cost of goods sold for the year for Ronald Co.was
A)$618,975.
B)$1,307,525.
C)$1,579,225.
D)$1,171,675.

Accepted Answer

To calculate the cost of goods sold for the year, we need to use the following formula:

Cost of goods sold = Beginning finished goods inventory + Cost of goods completed during the year - Ending finished goods inventory

Plugging in the given values, we get:

Cost of goods sold = $480,125 + $963,250 - $135,850
Cost of goods sold = $1,307,525

Therefore, the correct answer is B.

Quiz 17: Managerial Accounting and Cost Concepts

If the report is urgently needed,it is sometimes necessary to sacrifice accuracy in the interest of

Which of the following represents normal cost measurement?

Which of the following questions do not dictate a managerial report's format?

Which of the following is not one of the key questions to be addressed when preparing an accounting report?

The Finished Goods Inventory and the Cost of Goods Sold for a manufacturing company for the year 2014 are as follows: May 1 Finished Goods Inventory,$470,500;May 31 Finished Goods Inventory,$125,000;Cost of Goods Sold for the year,$1,110,000.The cost of goods manufactured for the month was

Which of the following is exclusive to a production-oriented company?

Recorded costs for the DC5 Division,which manufactured 6,000 units of Product DC5 during the month,are as follows: The per-unit cost of manufacturing Product DC5 this month is

Which of the following is the formula used to compute product unit cost?

Which of the following activities is not a part of the "perform" stage in the management process?

The fundamental way in which a company will achieve its goal is described in its

Which of the following is not a stage in the management process?

Which of the following is one of the integrity standards of management accountants?

Steve,the management accountant of a company,is not familiar with the concept of prudence in financial reporting.Which of the following IMA standards is Steve violating?

Management accounting activities

The credibility standard of management accountants state that management accountants must communicate information fairly and objectively.This means essentially that accountants must perform each task

Which of the following account balances is not reported on the balance sheet?

Which cost measurement method calculates product unit cost using estimates for direct materials,direct labor,and overhead?

The following are costs for a selected period: direct materials used in production,$75,000;direct labor cost of converting materials into product,$150,000;total indirect costs of manufacturing,$45,000.What is the unit cost of manufacturing 30,000 units in this period?

Which of the following contains period costs?

The beginning finished goods inventory of Ronald Co.was $480,125.Goods completed during the year cost $963,250.The ending finished goods inventory was dangerously low,having been reduced to $135,850.The cost of goods sold for the year for Ronald Co.was