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accounting questions for managers

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.

An example of a period cost is?
- Advertising cost.
- indirect materials.
- product design costs.
- direct materials

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.

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

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

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

Which type of budgeting utilizes employees at all levels of the company?
-Group budgeting
-Selective budgeting
-Target budgeting
-participative budgeting

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

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

The overall objective of controlling the costs of quality is to eliminate:
-appraisal costs
-costs of nonconformance
-costs of conformance
-the costs of quality

Solution Preview

Which is a characteristic of management accounting?
- It must follow generally accepted accounting principles
XX -It is used primarily by internal users.
- it is concerned primarily with reporting past performances.
- it uses historical costs as the sole measurement unit.

Management accounting is primarily for internal users. It uses past information but also predictions and forecasts. It is not restricted to historical costs (uses budgets and forecasts) and is not limited to GAAP formats.

An example of a period cost is?
XX- Advertising cost.
- indirect materials.
- product design costs.
- direct materials

Period costs are those that are expensed immediately and not "inventoried" as part of product cost (or capitalized as prepaid assets, investments, or property, plant and equipment). Advertising costs are not part of product cost and have no future value so are not capitalized as an asset other than inventory.

To discern product from non-product costs, think of this question: Will I have to do it anyway if I don't make the product myself anymore (just buy it from a ...

Solution Summary

Your tutorial is 334 words which is about a sentence or two for each question to indicate why the selection makes sense.

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