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Cost Accounting: Five multiple choice practice questions

1. Managerial accounting provides all of the following EXCEPT _____.

a) future-oriented information
b) pricing information from marketing studies
c) internal reports that don't follow GAAP
d) financial and nonfinancial reports on departments

2. Manufacturing sector companies:

a) purchase raw materials and process them into finished goods.
b) sell products in the same form they purchased them in.
c) provides services to clients.
d) sell services and products to the general public.

3. Which of the following issues is NOT addressed by the Sarbanes-Oxley legislation?

a) improving internal control
b) corporate governance
c) monitoring of managers
d) disclosure practices of private companies

4. Within the relevant range for a car manufacturer, if there is a change in the level of cars produced, then:

a) fixed and variable costs per unit will change.
b) fixed and variable costs per unit will remain the same.
c) fixed costs per unit will remain the same and variable costs per unit will change.
d) fixed costs per unit will change and variable costs per unit will remain the same.

5. The break-even point is:

a) total costs divided by variable costs per unit.
b) contribution margin per unit divided by revenue per unit.
c) fixed costs divided by contribution margin per unit.
d) the sum of fixed and variable costs divided by contribution margin per unit.

Solution Preview

1. Managerial accounting provides all of the following EXCEPT _____.

a) future-oriented information
b) pricing information from marketing studies
c) internal reports that don't follow GAAP
d) financial and nonfinancial reports on departments

Managerial accounting does not provide market price analysis. They may use the pricing information in a decision but they don't generate this data. Pick B.

2. Manufacturing sector companies:

a) purchase raw materials and process them into finished goods.
b) sell products in the same form they purchased them in.
c) provides services to clients.
d) sell services and ...

Solution Summary

A sentence or two explains the choice needed.

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