Question 1

When compared with financial accounting information, managerial accounting information

Select one:

a. Is reported as needed for the targeted decision-maker.

b. Emphasizes reliability over relevance.

c. Emphasizes the needs of investors and creditors.

d. Emphasizes general-purpose information for all users.

Question 2

The professional organization that focuses on the needs of internal accountants is the

Select one:

a. Institute of Management Accountants.

b. Financial Accounting Standards Board.

c. Association of Certified Fraud Examiners.

d. American Institute of Certified Public Accountants.

Question 3

For internal decision-making, classifying costs by behavior rather than function is often done because

Select one:

a. it generally improves internal decisions.

b. it is already in the accounting system because of external requirements.

c. it is generally accepted accounting principles (GAAP).

d. it is required by the Association of Internal Accountants.

Question 4

For an activity base to be useful in cost behavior analysis,

Select one:

a. there should be a correlation between changes in the level of activity and changes in costs.

b. the activity should always be stated in terms of units.

c. the activity should be constant over a period of time.

d. the activity should be stated in dollars.

Question 5

Which of the following graphs best represents a mixed cost with a low fixed component and a high variable cost per base unit?

Select one:

a. 2

b. 1

c. 3

d. 4

Question 6

Which of the following costs is a variable cost?

Cost	600 Units	900 Units
1	$900	$1,350
2	$800	$800
3	$2,000	$2,900
4	$140	$200

Select one:

a. 1

b. 2

c. 3

d. 4

Question 7

The method of calculating the cost components of a mixed cost that allows one to visually inspect whether the costs have a linear relationship to the base is the

Select one:

a. scattergraph method.

b. ordinary least squares method.

c. high-low method.

d. multi-linear estimation method.

Question 8

Scranton Company collected the following information on costs related to its fleet of trucks.

Month	Miles	Total Cost
January	6,800	$11,500
February	6,000	10,200
March	7,000	11,800
April	7,500	12,660

Applying the high-low method, what is the estimate of fixed costs per month?

Select one:

a. $360

b. $10,200

c. $231

d. $2,460

Question 9

What is the companys contribution margin given the following?

Sales	$600,000
Variable Manufacturing Costs	$320,000
Fixed Manufacturing Costs	$110,000
Fixed Selling and Administrative Costs	$40,000
Variable Selling and Administrative Costs	$50,000

Select one:

a. $230,000

b. $280,000

c. $170,000

d. $80,000

Question 10

Which one of the following is not an assumption of CVP analysis?

Select one:

a. All costs are variable costs.

b. All units produced are sold.

c. Sales mix remains constant.

d. The behavior of costs and revenues are linear within the relevant range.