Question 1

Which of the following is another term for mixed costs?

Accepted Answer

Mixed costs are also known as semivariable costs because they contain both fixed and variable components.

Question 2

Which of the following activities is not part of the management planning and control cycle?

Accepted Answer

Providing information to investors and creditors is not part of the management planning and control cycle, which focuses on internal processes like planning, implementing, monitoring, and revising plans.

Question 3

Implementing plans in the planning and control cycle relates to the act of:

Accepted Answer

Implementing plans involves managing resources and activities to execute the plans effectively.

Question 4

Managerial accounting, as opposed to financial accounting, is primarily concerned with:

Accepted Answer

Managerial accounting focuses on providing information for internal use by management for planning, controlling, and decision-making purposes, rather than external reporting.

Question 5

Activities included in a generally accepted definition of management accounting include:

Accepted Answer

Planning and controlling are key functions of management accounting.

Question 6

Simplifying assumptions identified for the use of cost behavior pattern data include:

Accepted Answer

The simplifying assumptions for cost behavior patterns typically include linearity, which assumes costs behave in a linear manner, and the relevant range, which is the range of activity where the assumptions about cost behavior are valid.

Question 7

Management accounting:

Accepted Answer

Management accounting involves using economic and financial information to assist in planning, controlling, and decision-making processes within an organization.

Question 8

Cost behavior refers to:

Accepted Answer

Cost behavior refers to how costs change in relation to changes in a company's level of activity, typically categorized as variable or fixed.

Question 9

As the total volume of activity changes:

Accepted Answer

As the total volume of activity changes, the fixed costs per unit change because fixed costs are spread over more or fewer units, while the total fixed costs remain constant.

Question 10

Knowing the behavior pattern of a cost is important to determine the effect on net income of a change in sales volume because as sales volume increases or decreases:

Accepted Answer

The effect on net income depends on the behavior pattern of costs, as fixed costs remain constant and variable costs change with sales volume.

Question 11

Managerial accounting, as compared to financial accounting:

Accepted Answer

Managerial accounting focuses on providing information for internal management to aid in decision-making, often using frequent and prompt control reports, unlike financial accounting which is more concerned with historical data and external reporting.

Question 12

The formula for expressing the total of a fixed, variable, or mixed cost at any level of activity is:

Accepted Answer

The total cost is calculated by adding the fixed cost to the product of the variable rate and the volume of activity.

Question 13

Which of the following statements does not describe a characteristic of management accounting?

Accepted Answer

Management accounting does not need to conform to GAAP (Generally Accepted Accounting Principles) as it is used internally for decision-making purposes, unlike financial accounting which must adhere to GAAP.

Question 14

Managerial accounting supports the management process least significantly by:

Accepted Answer

Managerial accounting is primarily forward-looking and focuses on planning, controlling, and decision-making processes. Measuring and reporting financial results after the fact is more aligned with financial accounting.

Question 15

When using a cost formula to determine total expected costs for cost items having a mixed (semi-variable)cost behavior pattern, total costs are expected to decrease and per unit variable costs are expected to:

Accepted Answer

The answer of When using a cost formula to determine...

Question 16

As the level of activity increases:

Accepted Answer

As the level of activity increases, the total fixed cost remains constant, but the fixed cost per unit decreases because the same total cost is spread over more units.

Question 17

Expressing fixed costs on a per unit basis of activity is misleading because:

Accepted Answer

Fixed costs remain constant in total regardless of activity level, so as activity increases, the fixed cost per unit decreases because the same total cost is spread over more units.

Question 18

Managerial accounting can best be described as:

Accepted Answer

Managerial accounting focuses on providing information for internal use by management for decision-making, planning, and control purposes within the organization.

Question 19

When the cost behavior pattern has been identified as fixed at a certain volume of activity:

Accepted Answer

The answer of When the cost behavior pattern has been...

Question 20

The relevant range concept refers to:

Accepted Answer

The relevant range concept refers to the range of activity within which the assumptions about fixed and variable costs are valid.

Quiz 12: Managerial Accounting and Cost-Volume-Profit Relationships