A+ ANSWERS

 

1) According to the Financial Executives Institute, one function of controllership is _____.  

2) Performance reports _____.  

A. provide feedback by comparing results with plans and by highlighting deviations

from plans  

B. ignore areas that are presumed to be running smoothly  

C. are quantitative expressions of action plans

D. are deviations from a plan 

3) Budgets _____. 

 A. provide feedback by comparing results with plans and by highlighting deviations from plans  

B. ignore areas that are presumed to be running smoothly  

C. are quantitative expressions of action plans

D. are deviations from a plan

 

4) Ethical accountants are important to society because _____. 

A. the information produced is reliable

B. none of these answers is correct

C. they pay their taxes

D. they will not go to prison and waste taxpayers’ money

 

5) According to theInstituteofManagement Accountants’ Statement of Ethical Professional Practice, the standard of competence includes:  

6) According to theInstituteofManagementAccountants’ Statement of Ethical Professional

Practice, the standard of objectivity includes _____.   

the ongoing development of the accountant’s knowledge and skills 

7) Which scorecard function is associated with making non-routine decisions? 

 

8) _____ is the field of accounting that develops information for external decision makers such

as stockholders, suppliers, banks, and government regulatory agencies. 

9) Launching a new product line is an example of _____. 

10) The _____ is also called the statement of financial position.

11) The accrual basis of accounting recognizes the impact of transactions on the financial

statements in the period when _____.

12) The _____ is not one of the three major financial statements.

13) The use of acquisition cost less depreciation in valuing an asset on the balance sheet is the

logical result of the _____ accounting convention.

14) The accounting convention of _____ guides the relative sophistication of the accounting

system.

15) The accounting convention of _____ means selecting the method of measurement that

yields the gloomiest immediate results.

16) The statement of cash flows is used for all of the following except_____.

17) The difference between a single and multiple step income statement is that a single step

income statement_____.

18) Sylvester Company requires clients to pay in advance for legal services. One such client

made a $4,000 payment on May 1, and Sylvester Company recorded this transaction in the

appropriate liability account. As of May 20, the legal services that the client requested had

been completed. The May 20 accounting entry will:

19) Output measures of both resources and activities are _____.

20) Which of the following is not a cost driver of customer services costs?

21) Which value chain function would include the cost of computer-aided design equipment

and cost to develop the prototype of a product?

22) Walnut Corporation sells desks at $480 per desk. The costs associated with each desk are

as follows: 

Direct materials  $195

Direct labor  126

Variable factory overhead  51

Total fixed costs for the period are $456,840. The contribution margin per desk is _____.

23) Hug Me Company produces dolls. Each doll sells for $20.00. Variable costs per unit total

$14.00, of which $6.25 is for direct materials and $5.25 is for direct labor. If total fixed costs

are $435,000, then the break even volume in dollars is _____.

24) If the sales price per unit is $100, the unit variable cost is $75, and total fixed costs are

$150,000, then the break even volume in dollar sales rounded to the nearest whole dollar is

25) _____ of approximating cost functions does not involve the analysis of past costs.

26) In relation to a cost function, the term reliability means_____.

27) The _____ method of measuring cost functions is the least reliable.

28) _____ is a name for a system that first accumulates overhead costs for each of the activities

of an organization, and then assigns the costs of activities to the products, services, or other

cost objects that caused that activity.

29) The change from traditional costing to activity-based costing may reveal that _____.

30) _____ is an example of the external financial reporting purpose of the cost management

systems.

31) _____ models are mathematical models of the master budget that can react to any set of

assumption about sales, costs, and product mix. 

32) Budgets generate negative feelings if they are _____.

33) _____ budgeting is when budgets are formulated with the active participation of all

affected employees

34) Important factors considered by sales forecasters include all of the following except

35) A _____ gives the expected sales under a given set of conditions. 

36) The master budget includes forecasts for all of the following except _____.

37) _____ are components of a master budget.

38) The master budget quantifies targets for all of the following except _____.

39) Differences between the static budget and the flexible budget are due to _____.

40) Costs are allocated for all the following purposes except to _____.

41) The use of budgeted service department cost rates protects using departments from

_____.

42) Cost allocation base refers to the _____.

 43) Murphy Company has two service departments, Maintenance and Personnel, as well as

two production departments, Mixing and Finishing. Maintenance costs are allocated based on

square footage while personnel costs are allocated based on number of employees. The

following information has been gathered for the current year: 

44) Serena Company has two service departments, Maintenance and Personnel, as well as

two production departments, Mixing and Finishing. Maintenance costs are allocated based on

square footage while personnel costs are allocated based on number of employees. The

following information has been gathered for the current year: 

 45) Gomez Company has two service departments, Maintenance and Personnel, as well as

two production departments, Mixing and Finishing. Maintenance costs are allocated based on

square footage while personnel costs are allocated based on number of employees. The

following information has been gathered for the current year _____. 

 46) In absorption costing, costs are separated into the major categories of_____.

 47) _____ is another term for variable costing.

48) When the variable costing method is used, fixed factory overhead appears on the income

statement as a_____.

49) _____ is the first step in designing a management control system.

A. Preparing financial statements

B. Establishing organizational goals

C. Distinguishing between profit centers and cost centers

D. Evaluating management's performance

 

50) _____ is (are) the most basic component of a management control system.

A. The stockholder's preferences

B. The organization's goals

C. Top management's preferences

D. The organization's long-range budget

 

 51) Identify which of the following is not a characteristic of a management control system.

A. A management control system motivates individuals throughout the organization to act in

concert.

B. A management control system encourages short term profitability.

C. A management control system coordinates forecasting sales and cost driver activities,

budgeting, and measuring and evaluating performance.

D. A management control system aids and coordinates the process of making decisions.

 

52) The following information is available for the Peter Company: 

Sales $500,000 

Invested Capital 312,500 

ROI 10% 

The return on sales is _____.

A. 1.000% 

B. 6.250% 

C. none of these answers is correct 

D. 10.000% 

 

53) _____ is a measure of income or profit divided by the investment required to obtain that

income or profit. 

A. Return on investment 

B. Capital turnover 

C. Residual income 

D. Return on sales 

 

54) The following information is available for the Peter Company: 

Sales $150,000 

Invested Capital 156,250 

ROI 10% 

The return on sales is _____.

A. 10.00% 

B. none of these answers is correct 

C. 62.50% 

D. 10.42%