61)
Total quality management (TQM) focuses on quality improvement and applies this standard to all
aspects of business activities.
A)
True
B)
False
62)
Just-in-time manufacturing (JIT) focuses on quality improvement and applies this standard to all
aspects of business activities.
A)
True
B)
False
63)
Just-in-time manufacturing (JIT) is a system that acquires inventory and produces only when
needed.
A)
True
B)
False
64)
Total quality management (TQM) is a system that acquires inventory and produces only when
needed.
A)
True
B)
False
65)
The raw materials inventory turnover is raw materials purchased divided by the average raw
materials inventory.
A)
True
B)
False
66)
A manufacturer’s cost of goods manufactured is the sum of direct materials, direct labor, and
factory overhead costs incurred in producing products.
A)
True
B)
False
67)
Indirect materials are accounted for as factory overhead because they are not clearly identified with
specific product units.
A)
True
B)
False
68)
Indirect labor refers to the cost of the workers whose efforts are directly related to specific units of
product.
A)
True
B)
False
69)
Direct labor refers to the cost of the workers whose efforts are directly related to specific units of
product.
A)
True
B)
False
70)
Although direct labor and raw materials costs are treated as manufacturing costs and therefore
make up part of the finished goods inventory cost, factory overhead is charged to expense as it is
incurred because it is a period cost.
A)
True
B)
False
71)
Factory overhead includes selling and administrative expenses because they are indirect costs of a
product.
A)
True
B)
False
72)
Prime costs consist of direct labor and factory overhead.
A)
True
B)
False
73)
Prime costs consist of direct materials and direct labor.
A)
True
B)
False
74)
The schedule of cost of goods manufactured is also known as a manufacturing statement.
A)
True
B)
False
75)
The schedule of cost of goods manufactured must be prepared monthly as it is a required
general-purpose financial statement.
A)
True
B)
False
76)
Managerial accounting information:
A)
Can be used for control purposes but not for planning purposes.
B)
Involves gathering information about costs for planning and control decisions.
C)
Is used mainly by external users.
D)
Has little to do with controlling costs.
E)
Is generally the only accounting information available to managers.
77)
Managerial accounting is different from financial accounting in that:
A)
Managerial accounting is used extensively by investors, whereas financial accounting is used
only by creditors.
B)
Managerial accounting includes many projections and estimates whereas financial accounting
has a minimum of predictions.
C)
Managerial accounting is mainly used to set stock prices.
D)
Managerial accounting is more focused on the organization as a whole and financial
accounting is more focused on subdivisions of the organization.
E)
Managerial accounting never includes nonmonetary information.
78)
Flexibility of practice when applied to managerial accounting means that:
A)
Managerial accounting system differ across companies depending on the nature of the
business and the arrangement of its internal operations.
B)
Managers must be flexible with information provided in varying forms and using inconsistent
measures.
C)
The information must be presented in electronic format so that it is easily changed.
D)
Managers must be willing to accept the information as the accountants present it to them,
rather than in the format they ask for.
E)
The managerial accountants need to be on call twenty-four hours a day.
79)
Which of the following items does not represent a difference between financial and managerial
accounting?
A)
Users of the information.
B)
Managerial accounting does not use the financial information from the financial accounting
system.
C)
Focus of the information.
D)
Timeliness of information.
E)
Flexibility of reporting.
80)
Which of the following items is not a management concept that was created to improve companies’
performances?
A)
Customer orientation.
B)
Total quality management.
C)
Continuous improvement.
D)
GAAP constraints and guidelines.
E)
Just-in-time manufacturing.
81)
A National Quality Award that encourages an emphasis on quality was established by:
A)
The Malcolm Baldrige Foundation.
B)
The United Nations.
C)
The SEC.
D)
The U.S. Chamber of Commerce.
E)
The U.S. Congress.
82)
Continuous improvement:
A)
Is not applicable to most businesses.
B)
Strives to preserve acceptable levels of performance.
C)
Is possible only in service businesses.
D)
Encourages employees to maintain established business practices.
E)
Rejects the notion of “good enough.“
83)
An attitude of constantly seeking ways to improve company operations, including customer
service, product quality, product features, the production process, and employee interactions, is
called:
A)
Customer orientation.
B)
Total quality measurement.
C)
Theory of constraints.
D)
Continuous improvement.
E)
Just-in-time.
84)
A management concept based on an understanding of the changing wants and needs of customers,
and which leads to flexible product designs and production processes, is called:
A)
Customer orientation.
B)
Just-in-time.
C)
Total quality management.
D)
Continuous improvement.
E)
Theory of constraints.
85)
An approach to managing inventories and production operations such that units of materials and
products are obtained and provided only as they are needed is called:
A)
Continuous improvement.
B)
Theory of constraints.
C)
Total quality management.
D)
Customer orientation.
E)
Just-in-time manufacturing.
86)
A management concept that seeks to uncover and eliminate waste in all aspects of business
activities is called:
A)
Just-in-time.
B)
Theory of constraints.
C)
Continuous operations.
D)
Lean business model.
E)
Customer orientation.
87)
Goals of a Total Quality Management process include all of the following except:
A)
Continuous improvement.
B)
Better inventory control.
C)
Fewer product defects.
D)
Reduced waste.
E)
Consistent production levels.
88)
The model whose goal is to eliminate waste while satisfying the customer and providing a positive
return to the company is:
A)
Managerial accounting model.
B)
Lean business model.
C)
Just-in-time manufacturing model.
D)
Corporate social responsibility model.
E)
Continuous improvement model.
89)
Jenny, an employee of Toucan Company, used company assets for her own personal gain. This is
an example of:
A)
internal control.
B)
embezzlement.
C)
employment perks.
D)
fraud.
E)
ethics.
90)
An employee is dissatisfied with the resolution of an ethical conflict with his supervisor at his
place of employment. According to the Institute of Management Accountants, the employee’s next
step should be to:
A)
report the incident to the State Board of Accountancy.
B)
make the president of the company aware of the ethical conflict.
C)
resign from the company.
D)
contact the next level of management who is not involved in the ethical conflict.
E)
contact the IMA.
91)
A direct cost is a cost that is:
A)
Does not change with the volume of activity.
B)
Identifiable as controllable.
C)
Traceable to multiple cost objects.
D)
Traceable to a single cost object.
E)
Traceable to the company as a whole.
92)
Classifying costs by behavior with changes in volume of activity involves:
A)
Identifying fixed cost and variable cost.
B)
Identifying both quantitative and qualitative cost factors.
C)
Identifying cost of goods sold and operating costs.
D)
Identifying costs in a physical manner.
E)
Identifying costs as financial or managerial.
93)
A classification of costs that determines whether a cost is expensed to the income statement or
capitalized to inventory is:
A)
Direct versus indirect.
B)
Fixed versus variable.
C)
Service versus manufacturing.
D)
Financial versus managerial.
E)
Product versus period.
Unit Variable Cost
Unit Fixed Cost
94)
A fixed cost:
A)
Does not change with changes in the volume of activity within the relevant range.
B)
Changes with changes in the volume of activity within the relevant range.
C)
Requires the future outlay of cash and is relevant for future decision making.
D)
Is directly traceable to a cost object.
E)
Is irrelevant for cost-volume-profit and short-term decision making.
95)
Last year, Wesson Company sold 10,000 units of its only product. If sales increase by 12% in the
current year, how will unit variable cost and unit fixed cost be affected?
36
96)
Last year, Wesson Company sold 10,000 units of its only product. If sales decrease by 15% in the
current year, how will unit variable cost and unit fixed cost be affected?
Unit Variable Cost
Remains constant
Unit Fixed Cost
Remains constant
Increases
Decreases
Remains constant
Remains constant
Decreases
Remains constant
Decreases
Increases
) Choice A B) Choice B
C) Choice E
D) Choice C
E) Choice D
97)
Last year, Gordon Company sold 20,000 units of its only product. If sales increase by 20% in the
current year, how will unit variable cost and total fixed cost be affected?
A)
Unit Variable Cost
Remains constant
Total Fixed Cost
Remains constant
B)
C)
D)
E)
Increases
Decreases
Remains constant
Remains constant
Decreases
Remains constant
Decreases
Increases
A) Choice B B) Choice E
C) Choice A
D) Choice D
E) Choice C
38
98)
Last year, Gordon Company sold 20,000 units of its only product. If sales decrease by 20% in the
current year, how will unit variable cost and total fixed cost be affected?
Unit Variable Cost
Remains constant
Total Fixed Cost
Remains constant
Increases
Decreases
Remains constant
Remains constant
Decreases
Remains constant
Decreases
Increases
) Choice B B) Choice C
C) Choice D
D) Choice A
E) Choice E
99)
Last year, Flash Company sold 15,000 units of its only product. If sales decreased by 17% in the
current year, how will total variable cost and total fixed cost be affected?
Total Variable Cost Total Fixed Cost
A)
Remains constant Remains constant
B)
Increases Decreases
C)
Decreases Remains constant
D)
Remains constant Decreases
E)
Remains constant Increases
A) Choice A B) Choice E C) Choice C D) Choice D E) Choice B
100)
Last year, Flash Company sold 15,000 units of its only product. If sales increased by 20% in the
current year, how will total variable cost and total fixed cost be affected?
Total Variable Cost
Remains constant
Total Fixed Cost
Remains constant
Increases
Increases
Remains constant
Remains constant
Decreases
Remains constant
Decreases
Increases
) Choice B B) Choice A
C) Choice C
D) Choice E
E) Choice D
101)
Period costs for a manufacturing company would flow directly to:
A)
The balance sheet as inventory.
B)
The income statement as an expense.
C)
Factory overhead.
D)
The current schedule of cost of goods manufactured.
E)
Cost of goods sold on the income statement.