Chapter 15—Management Accounting and Cost Concepts Key
1. Good management accounting is motivated by:
2. Management accounting is established by:
3. Which of the following principles are the LEAST uniform and are NOT mandatory?
4. The primary internal users of accounting information are:
5. Providing information for planning, controlling, and evaluating is a function of:
6. With regard to a particular company, which of the following groups generally has the widest variety of
decisions to make?
7. Which of the following is a fundamental characteristic of management accounting as compared to financial
accounting?
8. Which of the following is NOT a fundamental characteristic of management accounting as compared to
financial accounting?
9. Accounting information helps management to:
10. The first step in management planning is:
11. Which of the following is NOT a function of management?
12. The process of making decisions about future operations is called:
13. Which is usually conducted by executive level management?
14. Production prioritizing is:
15. Capital budgeting is:
16. Strategic planning is:
17. Operational budgeting is:
18. Determining the best use of financial resources is an aspect of:
19. Which of the following is a short-run planning decision?
20. The aspect of management accounting that deals with such issues as what additional major resources (e.g.,
plant and equipment) are needed to meet a company’s long-run goals is called:
21. All of the following are involved in the management function of planning EXCEPT:
22. Short-run planning involves which one of the following processes?
23. Long-run planning involves which one of the following processes?
24. The control of operations involves all the following procedures EXCEPT:
25. Which management function implements management plans and identifies how plans compare with actual
performance?
26. The process of control involves:
27. Which management function analyzes results, rewards performance and identifies problems?
28. Identifying problems and opportunities is a product of which process?
29. Variances which result from a comparison of actual performance against expected results would be used in
which management function?
30. Which of the following reveals how profitability is affected by changes in revenues, costs and activity
levels?
31. If a cost increases as the sales volume increases, the cost is a:
32. If total cost stays the same, even though the production level has risen, the cost is a(n):
33. Zodiac Company’s total costs are the same at all levels of activity. The company’s cost structure must have
all:
34. Which of the following is NOT a fixed cost?
35. The cost of milk used to manufacture ice cream would most likely be classified as a(n):
36. Advertising, insurance, and executives’ salaries are all examples of:
37. Which of the following would most likely be a variable cost?
38. Which of the following would most likely be considered a variable cost?
39. Assume that Lily Company has total fixed costs of $48,000 for the period. Each unit sells for $40. The
variable cost per unit is $24. How many units must be sold to break even?
40. Assume that Rose Company sold 15,000 units to break even this period. Each unit sells for $100. The
variable cost per unit is $65. What were fixed costs for the period?
41. Violet Company typically has $360,000 of fixed costs and $25 of variable costs per unit. Violet plans to sell
8,000 units this period. In order for Violet to break-even, what price should Violet charge per unit?
42. During the quarter, Iris Company sold 100,000 units at $5 per unit to break even. Iris had $150,000 in fixed
costs. What was variable cost per unit for the quarter?
43. Which of the following has a direct materials inventory?
44. Which of the following has no inventories?
45. Which of the following is NOT true of period costs?
46. Which is NOT a period cost of operating a retail store?
47. The product costs of a software development company would NOT include:
48. Which of the following would NOT usually be considered a product cost of a manufacturing company?
49. Manufacturing costs are also considered:
50. Materials used in production are classified as “direct materials” if they are:
51. Which of the following would NOT be included in manufacturing overhead?
52. Product costs in a manufacturing firm would NOT include:
53. Utility expense in a merchandising company would be considered a(n):
54. Which of the following would NOT be considered a manufacturing cost?
55. In a manufacturing company, indirect labor is usually classified as a(n):
56. Direct labor is most often considered which of the following?
57. Which of the following types of costs are most likely to be classified as period costs?
58. Glue used in the manufacture of chairs would most likely be classified as:
59. Miscellaneous materials used by sales managers should be accounted for as:
60. A nonmanufacturing cost is usually classified as:
61. In constructing a custom cabinet, an indirect material would be:
62. The cost of milk for an ice cream manufacturer would be considered all of the following EXCEPT:
63. Costs that are NOT classified as direct materials or direct labor but are essential to the production of goods
and services are:
64. Rhododendron Company offers yard maintenance services for residential clients. Costs for the year were
direct labor, $80,000 and indirect labor, $5,000. Additional expenses for the year were supplies $6,000;
depreciation of lawn maintenance equipment, $1,000; advertising expense, $500; receptionist payroll, $13,000
and fuel, $2,500. Which amount is Rhododendron’s total service costs?