loader  Loading... Please wait...

Question(s) / Instruction(s):

ACC 561 Final Exam 2:

 

1) Budgets _____.

A. ignore areas that are presumed to be running smoothly

B. are deviations from a plan

C. provide feedback by comparing results with plans and by highlighting deviations from plans

D. are quantitative expressions of action plans

 

 

2) Department performance reports can be used to help department heads determine _____.

A. who is primarily responsible for any deviations from plans

B. how efficiently the department is operating

C. how effectively the department is operating

D. how effectively and efficiently the department is operating

 

 

3) According to the Financial Executives Institute, one function of controllership is _____.

A. reporting and interpreting financial information

B. short term financing

C. investments

D. provision of capital

 

 

4) According to the Institute of Management Accountants’ Statement of Ethical Professional Practice, the standard of competence includes:

A. All of these answers are correct

B. avoiding actual or apparent conflicts of interest

C. the ongoing development of the accountant’s knowledge and skills

D. disclosing all relevant information

 

 

5) Ethical accountants are important to society because _____.

A. none of these answers is correct

B. the information produced is reliable

C. they pay their taxes

D. they will not go to prison and waste taxpayers’ money

 

 

6) Which of the following is not a major factor causing changes in management accounting today?

A. Increasing importance of the service sector of the economy is not a major factor.

B. Increased global competition is not a major factor.

C. Declining work ethic is not a major factor.

D. E-commerce is not a major factor.

 

 

7) _____ refers to accounting information developed for managers within an organization.

A. Tax accounting

B. Managerial accounting

C. Internal auditing

D. Financial accounting

 

 

8) Which scorecard function is associated with making non-routine decisions?

A. None of these answers is correct

B. Scorekeeping is associated with making non-routine decisions.

C. Problem solving is associated with making non-routine decisions.

D. Attention directing is associated with making non-routine decisions.

 

9) _____ is (are) the accounting system's effect on the decision of managers.

A. Computerization

B. Simplicity

C. The cost-benefit balance

D. Behavioral implications

 

 

10) Any event that affects the financial position of an organization and requires recording is called a(n)_____.

A. accounting change

B. transaction

C. posting

D. account

 

 

11) The _____ is not one of the three major financial statements.

A. statement of equity position

B. statement of cash flows

C. balance sheet

D. income statement

 

 

12) _____ would not appear on the financial statements for a sole proprietorship.

A. Unearned Sales Revenues

B. Paid-in Capital

C. Accumulated Depreciation

D. Cost of Goods Sold

 13) The accounting convention of _____ guides the relative sophistication of the accounting system.

A. materiality

B. objectivity

C. conservatism

D. cost benefit

 

 

14) The use of acquisition cost less depreciation in valuing an asset on the balance sheet is the logical result of the _____ accounting convention.

A. materiality

B. cost-benefit

C. conservatism

D. continuity

 

 

15) The accounting convention of _____ permits a company to immediately expense assets (such as a garbage can) with small values and long useful lives.

A. conservatism

B. materiality

C. continuity

D. objectivity

 

 

16) Sylvester Company requires clients to pay in advance for legal services. One such client made a $4,000 payment on May 1, and Sylvester Company recorded this transaction in the appropriate liability account. As of May 20, the legal services that the client requested had been completed. The May 20 accounting entry will:

A. decrease liabilities and increase revenues

B. increase revenues and increase liabilities

C. decrease assets and decrease liabilities

D. decrease assets and increase revenues

 

 

17) Limited liability means that_____.

A. corporations can have liabilities up to only a certain amount due to limits on the company's borrowing capability

B. the company is required to pay only current liabilities in the current year and has no obligation to pay long term liabilities in the current year

C. the creditors of a corporation can receive only up to, and no more than, the amount due to them

D. the creditors of the corporation have claims on only the assets of the corporation and not the assets of the owners of the corporation

 

 

18) Nonoperating items on the income statement_____.

A. appear on the income statement immediately after gross profit

B. appear only on corporate income statements

C. reflect the effects of financial management decisions

D. are revenues and expenses arising from adjusting entries

 

 

19) Which value chain function would include the cost of computer-aided design equipment and cost to develop the prototype of a product?

A. The marketing function would include these costs

B. The production function would include these costs.

C. The design of product, services, and processes function would include these costs.

D. The distribution function would include these costs.

 

 

20) Which value chain function would include advertising costs?

A. The marketing function would include advertising costs.

B. The production function would include advertising costs.

C. The distribution function would include advertising costs.

D. The customer service function would include advertising costs.

 

 

21) Number of engineering hours is a likely cost driver for which value chain function?

A. The production function has number of engineering hours as a likely cost driver

B. The marketing function has number of engineering hours as a likely cost driver.

C. The research and development function has number of engineering hours as a likely cost driver.

D. The design function has number of engineering hours as a likely cost driver.

 

 

 

22) Walnut Corporation sells desks at $480 per desk. The costs associated with each desk are as follows: Direct materials $195 Direct labor 126 Variable factory overhead 51 Total fixed costs for the period are $456,840. The contribution margin per desk is _____.

A. $126

B. $51

C. $195

D. $108

 

 

23) Knothole Company sells desks at $480 per desk. The costs associated with each desk are as follows: Direct materials $195 Direct labor 126 Variable factory overhead 51 Total fixed costs for the period are $456,840. The break-even volume in dollars is _____.

A. none of these answers is correct

B. $2,030,400

C. $456,840

D. $1,573,560

 

 

24) If the sales price per unit is $100, the total fixed costs are $75,000, and the break even volume in dollar sales is $250,000, then the variable cost per unit is _____.

A. $30

B. $75,000

C. $70

D. $100

                        

25) Managers should apply two principles to obtain accurate and useful cost functions. These principles are ____.

A. believability and validity

B. reliability and validity

C. plausibility and believability

D. plausibility and reliability

 

 

26) _____ is a method of approximating cost functions.

A. Account analysis

B. Product analysis

C. Cost driver analysis

D. Transaction analysis

 

 

27) The _____ method of measuring cost functions is the least reliable.

A. multiple least squares regression

B. visual fit

C. high low

D. simple least squares regression

 

 

28) _____ need cost accounting systems.

A. Manufacturing firms, service organizations, and nonprofit organizations

B. Service organizations and nonprofit organizations

C. Manufacturing firms and service organizations

D. Manufacturing firms and nonprofit organizations

 

 

29) The change from traditional costing to activity-based costing may reveal that _____.

A. both high and low volume products are undercosted

B. low volume products are overcosted

C. high volume products are overcosted

D. both high and low volume products are overcosted

 

 

30) _____ is an example of the external financial reporting purpose of the cost management systems.

A. Budget reporting

B. The product mix to optimize profitability

C. The cost of a manufacturing process

D. The amount of inventory that should appear on the balance sheet

 

 

31) _____ budgeting is when budgets are formulated with the active participation of all affected employees

A. Shared

B. Team

C. Financial

D. Participative

 

 

32) A sales forecast is _____.

A. all of these answers are correct

B. the result of decisions to create conditions

C. a prediction of sales under a given set of conditions

D. the same as a sales budget that will generate a desired level of sales

 

33) A _____ gives the expected sales under a given set of conditions.

A. sales forecast

B. sales budget

C. sales prediction

D. budget forecast

 

 

34) A _____ gives the expected sales under a given set of conditions.

A. sales forecast

B. sales budget

C. sales prediction

D. budget forecast

 

 

35) A sales forecast is _____.

A. all of these answers are correct

B. a prediction of sales under a given set of conditions

C. the same as a sales budget that will generate a desired level of sales

D. the result of decisions to create conditions

 

 

36) The master budget includes forecasts for all of the following except _____.

A. cash disbursements

B. sales

C. balance sheets

D. number of employees

 

 

37) _____ are components of a master budget.

A. A cash budget and an activity budget

B. A strategic plan and an operating budget

C. A continuous budget and a static budget

D. An operating budget and a financial budget

 

 

38) The master budget quantifies targets for all of the following except _____.

A. cost driver activity

B. sales

C. markets

D. production

 

 

39) Differences between the static budget and the flexible budget are due to _____.

A. actual activity differing from expected activity levels

B. problems of cost control

C. a combination of price and material variances

D. poor usage of material and labor

 

 

40) _____ is not a type of cost allocation.

A. Reallocation of costs from production departments to service departments

B. Allocation of costs to the appropriate organizational unit

C. Allocation of costs of a particular organizational unit to products or services

D. Reallocation of costs from service departments to production departments

 

 

41) Cost allocation base refers to the _____.

A. cost objectives

B. cost driver

C. total allocated costs

D. total costs to be allocated

 

 

42) The preferred guidelines for allocating service department costs include _____.

A. allocating variable- and fixed-cost pools simultaneously

B. identifying the direct and indirect costs

C. establishing part or all of the details regarding cost allocation in advance of rendering the service

D. evaluating performance using allocated costs for each service department

 

 

 43) Murphy Company has two service departments, Maintenance and Personnel, as well as two production departments, Mixing and Finishing. Maintenance costs are allocated based on square footage while personnel costs are allocated based on number of employees. The following information has been gathered for the current year: Maintenance Personnel Mixing Finishing Direct dept. costs $126,000 $84,000 $105,000 $175,000 Square footage 800 400 1,600 1,200 Number of employees 8 12 24 32 If the step-down method of allocating costs is used and the Personnel Department is allocated first, then the amount of overhead that would be allocated from Personnel to Mixing is _____.

A. $78,000

B. $31,500

C. $63,000

D. $58,500

 

 

44) Martinez Company has two service departments, Maintenance and Personnel, as well as two production departments, Mixing and Finishing. Maintenance costs are allocated based on square footage while personnel costs are allocated based on number of employees. The following information has been gathered for the current year: Maintenance Personnel Mixing Finishing Direct dept. costs $50,400 $33,600 $42,000 $5,600 Square footage 1,600 800 3,200 2,400 Number of employees 16 24 48 64 If the step down method is used to allocate costs and the Maintenance Department is allocated first, then the amount of overhead that would be allocated from Personnel to Maintenance is _____.

A. $0

B. $4,998

C. $3,539

D. $4,200

 

45) Kevin Company has two service departments, Maintenance and Personnel, as well as two production departments, Mixing and Finishing. Maintenance costs are allocated based on square footage while personnel costs are allocated based on number of employees. The following information has been gathered for the current year: Maintenance Personnel Mixing Finishing Direct dept. costs $126,000 $84,000 $105,000 $175,000 Square footage 800 400 1,600 1,200 Number of employees 8 12 24 32 If the step-down method of allocating costs is used and the Personnel Department is allocated first, then the amount of overhead that would be allocated from Personnel to Finishing is _____.

 

A. $105,000

B. $42,000

C. $31,500

D. $72,000

 

 

46) When the variable costing method is used, fixed factory overhead appears on the income statement as a_____.

A. component of cost of goods sold and as a production-volume variance

B. component of cost of goods sold

C. production-volume variance

D. fixed expense

 

 

47) Absorption costing assigns _____ to the product.

A. all fixed and variable costs

B. variable manufacturing costs

C. variable and fixed manufacturing costs

D. all variable costs

 

 

48) _____ is another term for variable costing.

A. Absorption costing

B. Full costing

C. Traditional costing

D. Direct costing

 

 

49) _____ is (are) the most basic component of a management control system.

A. Top management’s preferences

B. The organization’s long-range budget

C. The stockholder’s preferences

D. The organization’s goals

 

 

50) _____ is the first step in designing a management control system.

A. Distinguishing between profit centers and cost centers

B. Preparing financial statements

C. Evaluating management's performance

D. Establishing organizational goals

 

 

51) _____ is the logical integration of management accounting tools to gather and report data and to evaluate performance.

A. A management control system

B. A financial reporting system

C. An internal control system

D. A quality control system

 

 

52) The following information is available for the Peter Company: Sales $150,000 Invested Capital 156,250 ROI 10% The return on sales is _____.

A. none of these answers is correct

B. 62.50%

C. 10.00%

D. 10.42%

 

53) _____ is a measure of income or profit divided by the investment required to obtain that income or profit.

A. Residual income

B. Return on investment

C. Return on sales

D. Capital turnover

 

 

54) Jewel Company’s revenues are $300 and invested capital is $240. Expenses are currently 60% of sales. Jewel Company’s current return on investment is _____.

A. none of these answers are correct

B. 80%

C. 50%

D. 100% 

Find Similar Answers by Subject


Student Reviews

Rate and review your solution! (Please rate on a Scale of 1 - 5. Top Rating is 5.)


Expert's Answer
Download Solution:
$4.00

This solution includes:

  • Plain text
  • Cited sources when necessary
  • Attached file(s)
  • Solution Document(s)



Reach Us

408-538-8534

20-3582-4059

39-008-4233

+1-408-904-6494