Question 1

An attitude of constantly seeking ways to improve company operations, including customer service, product quality, product features, the production process, and employee interactions, is called:

Accepted Answer

The attitude described in the question is called continuous improvement, which is the process of identifying and eliminating inefficiencies in company operations to constantly improve the quality of products and services.

Question 2

Classifying costs by behavior involves:

Accepted Answer

Classifying costs by behavior involves identifying fixed costs (costs that do not change with changes in activity level) and variable costs (costs that do change with changes in activity level). This classification helps managers understand how changes in production or sales will impact their costs.

Question 3

Costs classified by controllability are useful for:

Accepted Answer

The answer of Costs classified by controllability are useful for:
...

Question 4

Costs that are incurred as part of the manufacturing process but are not clearly associated with specific units of product or batches of production, including all manufacturing costs other than direct material and direct labor costs, are called:

Accepted Answer

Factory overhead costs are indirect costs that cannot be directly traced to specific units of product or batches of production. These costs include items such as rent, utilities, and depreciation on manufacturing equipment.

Question 5

The salary paid to the supervisor of an assembly line would normally be classified as:

Accepted Answer

The supervisor's salary is not directly involved in the production of a specific product. Therefore, it is classified as an indirect cost or indirect labor.

Question 6

The Institute of Management Accountants has developed a code of ethics which requires management accountants to behave in certain ways. Which of the following behaviors is not required?

Accepted Answer

Timeliness is not explicitly listed as a requirement in the IMA's Statement of Ethical Professional Practice, which focuses on competence, integrity, confidentiality, and credibility.

Question 7

An opportunity cost is:

Accepted Answer

Opportunity cost refers to the cost of potential benefit that is lost when choosing one option over another. It is not an uncontrollable cost or a change in the cost of a component. It is also different from direct costs and sunk costs, which refer to actual expenses incurred.

Question 8

The model whose goal is to eliminate waste while satisfying the customer and providing a positive return to the company is:

Accepted Answer

The description provided in the question aligns with the principles of the Lean business model, which is focused on eliminating waste (from production processes, inventory, motion, waiting, defects, over-production, over-processing) while ensuring customer satisfaction and positive financial returns for the company.

Question 9

Raw materials that physically become part of the product and can be traced to specific units or batches of product are called:

Accepted Answer

Direct materials are raw materials that can be physically traced to specific units or batches of product and become part of the finished product.

Question 10

Which of the following is never included in direct materials costs?

Accepted Answer

The answer of Which of the following is never included...

Question 11

Which of the following is not a characteristic of all fraud?

Accepted Answer

While fraud often involves intentional deception, it is possible for it to occur unintentionally as well. Therefore, not all fraud involves intentional deception.

Question 12

A management concept that applies quality improvement to all aspects of business activities is called:

Accepted Answer

Total quality management is a management concept that focuses on continuous improvement and applies quality improvement to all aspects of business activities. It involves a collaborative effort by all employees to improve customer satisfaction and reduce waste, defects, and errors. It emphasizes customer orientation, employee involvement, continuous improvement, and the use of data and statistical methods to measure and improve performance.

Question 13

An approach to managing inventories and production operations such that units of materials and products are obtained and provided only as they are needed is called:

Accepted Answer

Just-in-time manufacturing (JIT) is an approach to managing inventories and production operations such that units of materials and products are obtained and provided only as they are needed. This helps to minimize waste and reduces the need for large inventory stockpiles. Continuous improvement, customer orientation, theory of constraints, and total quality management are related concepts, but not specifically focused on inventory and production operations.

Question 14

A direct cost is a cost that is:

Accepted Answer

A direct cost is a cost that can be traced to a specific cost object, such as a product or department. It is directly related to the cost object and can be easily identified and measured. Examples include direct materials and direct labor. Therefore, choice D - Traceable to a cost object is the best choice.

Question 15

Which of the following statements is true?

Accepted Answer

The IMA's Statement of Ethical Professional Practice requires management accountants to be competent, maintain confidentiality, act with integrity, and communicate information in a fair and credible manner. Option A is incorrect because it states that management accountants should be incompetent, which is contradictory to the purpose of the code. Option B is incorrect because eliminating all fraud completely may not be possible. Option C is incorrect because it contradicts the requirement for management accountants to communicate information in a credible manner. Option E is incorrect because it is only partially correct and does not include all the requirements of the code.

Question 16

A management concept that encourages all managers and employees to be in tune with the wants and needs of customers, and which leads to flexible product designs and production processes, is called:

Accepted Answer

Customer orientation is a management concept that puts the focus on meeting the needs and desires of customers. It involves all managers and employees being aware of customer wants and needs, and incorporating that information into product design and production processes. This approach tends to result in greater customer satisfaction and loyalty, as well as more flexible and adaptable operations. The other options, while related to quality management and efficiency, do not specifically address the importance of customer input and satisfaction.

Question 17

Continuous improvement:

Accepted Answer

Continuous improvement is the process of constantly evaluating and improving processes, products, and services to achieve a higher level of quality and efficiency. It involves rejecting the notion of "good enough" and continuously seeking ways to improve. Continuous improvement is not a measure of profits or costs, and it is applicable to most businesses, not just service businesses.

Question 18

Materials that are used in support of the production process but that do not become a part of the product and are not clearly identified with units or batches of product are called:

Accepted Answer

Indirect materials are those materials that are used in support of the production process but do not become a part of the final product or are not clearly identified with units or batches of product. They include items such as cleaning supplies, lubricants, and tools used in the manufacturing process.

Question 19

Labor costs that are clearly associated with specific units or batches of product because the labor is used to convert raw materials into finished products called are:

Accepted Answer

Direct labor costs are those that can be directly traced to a specific product because they are used to convert raw materials into finished products. This includes wages and salaries for workers who handle or work on the product during the manufacturing process.

Question 20

Which of the following statements regarding fraud is (are) true?

Accepted Answer

Fraud is defined as a deliberate act to deceive for personal gain. It cannot be unintentional, and while strong ethics and internal controls can reduce the risk, they cannot completely eliminate fraud. The most common type of fraud is asset misappropriation, not financial statement fraud.

Quiz 14: Managerial Accounting Concepts and Principles