Multiple Choice Questions
1. The provision of accounting information for internal users is known as
a. Accounting.
b. Financial accounting.
c. Managerial accounting.
d. Information provision.
e. Accounting for planning and control.
2. The process of choosing among competing alternatives is called
a. Planning.
b. Decision making.
c. Controlling.
d. Performance evaluation.
e. None of these.
3. Which of the following is a characteristic of managerial accounting?
a. There is an internal focus.
b. Subjective information may be used.
c. There is an emphasis on the future. d. It is broad-based and multidisciplinary.
e. All of these.
4. In terms of strategic positioning, which two general strategies may be chosen by a company?
a. Revenue production and cost enhancement
b. Activity-based costing and value chain emphasis
c. Increasing customer value and decreasing supplier orientation
d. Cost leadership and product differentiation
e. Product differentiation and cost enhancement
5. Accumulating costs means that
a. Costs must be summed and entered on the income statement.
b. Each cost must be linked to some cost object.
c. Costs must be measured and tracked.
d. Costs must be allocated to units of production.
e. Costs have expired and must be transferred from the balance sheet to the income statement.
6. Product (or manufacturing) costs consist of
a. Direct materials, direct labor, and selling costs.
b. Direct materials, direct labor, overhead, and operating expense.
c. Prime costs plus conversion costs.
d. Prime costs and overhead.
e. Selling and administrative costs.
7. Refer to the information for Wachman Company above. Conversion cost per unit was Wachman Company produces a product with the following per-unit costs:
Direct materials .......... $15
Direct labor ............. 6
Manufacturing overhead ........ 10
Last year, Wachman produced and sold 1,000 units at a price of $75 each. Total selling and administrative expense was $30,000.
a. $15.
b. $21.
c. $31.
d. $16.
e. none of these.