01. Management accounting reports are required to follow generally accepted acco

Question

01. Management accounting reports are required to follow generally accepted accounting principles (GAAP).
(2 points)
True
False

02. Which of the following is a characteristic of management accounting when compared with financial accounting?
(2 points)
Usually more use of approximations
Usually more frequent reporting of information
Both A and B above
Neither A nor B above

03. Which of the following will remain unchanged within a relevant range of activity?
(2 points)
Variable cost per unit
Variable cost in total
Both A and B above
Neither A nor B above

04. Which of the events below will increase a company’s breakeven point?
(2 points)
A decrease in sales revenue.
An increase in fixed costs.
Both A and B above
Neither A nor B above

05. At a company’s breakeven point, total contribution margin will equal:
(2 points)
zero
total costs.
total fixed costs.
total variable costs.

06. Which of the following products or services would likely use a process costing system rather than a job order costing system?
(2 points)
law office
custom home builder
crude oil refining
shipbuilding

07. Sentacks Corporation uses a predetermined overhead rate based on direct labor hours to apply manufacturing overhead to the products that it produces. At the beginning of 2007, Sentacks estimated 160,000 direct labor hours and $640,000 of manufacturing overhead cost for 2007. By the end of 2007, Sentacks actually used 170,000 direct labor hours and incurred $646,000 of manufacturing overhead cost. Assume that Sentacks uses a job order cost system. How much manufacturing overhead cost would have been applied to a job that used 400 direct labor hours back in March of 2007?
(2 points)
$ 100
$1,520
$1,600
$1,615

08. Which of the following should be the primary criterion used to select a cost driver for use in allocating indirect costs?
(2 points)
Ease of use.
There is little or no fluctuation in cost driver activity from year to year.
The cost driver information is contained within the accounting system.
A causal relationship between the cost being allocated and the cost object to which it is being allocated.

09. A significant benefit of allocating the indirect costs within a business to its products and/or services is that the full cost of each product or service is known with complete accuracy.
(2 points)
True
False

10. One of the disadvantages of the use of standard costing is the significant increase in resources needed for the required recordkeeping.
(2 points)
True
False

Explanation / Answer

1.True 2.usually more frequent reporting information 3.variable cost in total 4.an increase in fixed cost 5.total fixed cost 6.crude oil refining 7.$1600 8.The cost driver informtion is contained with the accouting system. 9.True 10.False

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