Problem 1: Which is a characteristic of management accounting?
- It must follow generally accepted accounting principles
- It is used primarily by internal users.
- it is concerned primarily with reporting past performances.
- it uses historical costs as the sole measurement unit.
Problem 2: An example of a period cost is?
- Advertising cost.
- indirect materials.
- product design costs.
- direct materials
Problem 3: Which of the following is not an objective of product costing systems?
-To provide for cost planning
-To assist in the preparation of the income statement.
-To determine the optimal amount of products to manufacture.
- To provide for product pricing.
Problem 4: Which of the following entities probably would use a process costing system?
- An oil refinery
- A yacht builder
- A custom furniture shop
- A custom screw manufacturer
Problem 5: Activity-based management includes all of the following except identifying:
-customer satisfaction with a product or service
-the resources that are consumed by each activity
-activities as value adding
-how resources are consumed by each activity
Problem 6: An insurance company pays its employees a commission of 6% on each sale, what is the proper classification of the cost of sales commissions?
-Constant cost
-Variable cost
- Mixed cost
- Fixed cost
Problem 7: Which type of budgeting utilizes employees at all levels of the company?
-Group budgeting
-Selective budgeting
-Target budgeting
-participative budgeting
Problem 8: Standard costs are useful for all but which of the following?
-determining actual costs
-preparing budgets and forecasts
-evaluating the performance of workers and management
-helping to develop appropriate selling prices
Problem 9: An example of a price objective is to:
-ignore long-term pricing strategies in favor of short-term profits
-increase market share irrespective of the cost of a product
-maintain a price that is always under that of the competition
-maintain a minimum rate of return
Problem 10: The overall objective of controlling the costs of quality is to eliminate:
-appraisal costs
-costs of nonconformance
-costs of conformance
-the costs of quality