Activity$-$based costing is a method of accumulating and allocating costs by department.

a$.$ True

b$.$ False

Which of the following statements is true of managerial accounting?

a$.$ Reporting under managerial accounting is constrained by rules such as generally accepted accounting principles.

b$.$ Managerial accounting is required to be reported annually, also may be reported monthly or quarterly.

c$.$ Managerial accounting provides information to the external stakeholders of the company.

d$.$ Managerial accounting is primarily concerned with generating information for use by managers.

Which of the following statements is a difference between financial accounting and managerial accounting?

a$.$ Under financial accounting, reports are prepared using GAAP, whereas under managerial accounting, information that is useful to management for its decision making is not recorded using GAAP.

b$.$ Financial accounting focuses on providing information for internal use, whereas managerial accounting focuses on providing information for external use.

c$.$ Under financial accounting, reports are prepared as and when management needs them, whereas under managerial accounting, reports are prepared on a monthly basis.

d$.$ Financial accounting has a subjective approach, whereas managerial accounting has an objective approach.

Costs are often classified by their relationship to a segment of operations, called a

a$.$ prime cost

b$.$ controlling account

c$.$ cost object

d$.$ cost sheet

Which of the following is true of a direct materials cost?

a$.$ A direct materials cost is included in factory overhead.

b$.$ It is sometimes called factory burden.

c$.$ It is not a significant portion of the total product cost.

d$.$ It is the cost of any material that is an integral part of the finished product.

Which of the following is an example of direct materials cost for an automobile manufacturer?

a$.$ Cost of oil lubricants for factory machinery

b$.$ Cost of wages of assembly worker

c$.$ Varnish for coating

d$.$ Cost of interior upholstery