Understanding Key Managerial Accounting Concepts

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Understanding Key Managerial Accounting Concepts1.(TCO 1) The principle managers follow when they only investigate significant departures from the plan iscommonly known as(Points : 4)small amounts don't matteronly materials and labor deserve attentionmanagement by exceptionexceptional costs yield exception results2.(TCO 1) A company has a cost that is $2.00 per unit at a volume of 12,000 units and $2.00 per unit at a volumeof 16,000 units. What type of cost is this?(Points : 4)FixedVariableSunkIncremental3.(TCO 2) A job-order costing system is likely used by a(Points : 4)soft drink bottlerbreakfast cereal manufacturerpaint manufacturercustom home builder4.(TCO 3) Why do we compute equivalent units differently for raw materials and conversion costs?(Points : 4)Raw materials are more difficult to countConversion costs are more difficult to countThey are introduced into the process at different times

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None of the above5.(TCO 3) The Freedom Corporation’s painting department had a beginning inventory of 580 units, which haddirect material costs of $22,715. During June, 9,290 units were started and costs of $1,268,085 were incurred fordirect material. Ending inventory consists of 1,000 units, which are 35% complete with respect to direct material.What is the cost per equivalent unit for direct material?(Points : 4)$40.00$137.00$140.00$159.006.(TCO 4) The range of activity for which estimates of cost behavior are likely to be accurate is the(Points : 4)incremental rangemargin of safetyrelevant rangerange of opportunity7.(TCO 4) The contribution margin per unit is the difference between(Points : 4)total revenue and total fixed costsselling price and variable costs per unitanticipated level of sales and break-even salesbudgeted fixed costs and actual fixed costs

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8.(TCO 5) Which of the following is treated as a product cost in variable costing?(Points : 4)Sales commissionsAdministrative salariesFixed manufacturing overheadDirect labor9.(TCO 5) Which of the following isnottrue when units sold exceed units produced?(Points : 4)Full costing and variable costing will yield the same net income.Full costing will assign some fixed manufacturing costs to the units in ending inventory.Net income will be higher under variable costing than under full costing.Inventory levels will decrease.10.(TCO 6) A contract which specifies that the suppler will be paid for the cost of production as well as somefixed amount or percentage of cost is called a(n)(Points : 4)approved overrun.cost-plus contract.allocation plan.indirect cost budget.11.(TCO 6) The traditional approach to cost allocation(Points : 4)tends to over-cost high volume core products.usually requires more cost pools than ABC.attempts to identify the activities that cause costs.produces more accurate costs than any other method.

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