Reference no: EM13334685

Part -a

1. Managerial accounting supports the management process most significantly by:
A. measuring and reporting financial results after the fact.
B. determining the goals and objectives of the entity.
C. providing estimates of financial results for various plans.
D. establishing operating policies to be followed during a period of time.

2. Activities included in a generally accepted definition of management accounting include:
A. planning, organizing, controlling
B. planning, operating, reporting
C. preparing, operating, creating
D. preparing, organizing, converting

3. Which of the following activities is not part of the management planning and control cycle:
A. data collection and performance feedback.
B. implementation of plans.
C. providing information to investors and creditors.
D. revisiting plans.

4. Performance analysis in the planning and control cycle relates to the act of:
A. planning.
B. managing.
C. controlling.
D. revising plans.

5. Which of the following statements does not describe a characteristic of management accounting?
A. Management accounting must conform to GAAP.
B. Approximate amounts rather than accurate amounts or refined estimates are often used in management accounting.
C. Management accounting places a great deal of emphasis on the future.
D. Management accounting is more concerned with units of the organization rather than with the organization as a whole.

6. Management accounting is:

A. a highly technical subject that people in personnel or engineering should not be expected to understand.
B. performed by individuals who seldom work with people in other functional areas of the organization.
C. the principal activity involved in determining the goals and objectives of the entity.
D. an activity that gets involved with virtually all of the other functional areas of the organization.

7. Managerial accounting, as opposed to financial accounting, is primarily concerned with:
A. preparing the current balance sheet of the company.
B. present and future planning and control.
C. providing information to investors and creditors.
D. historical results of operations.

8. Managerial accounting can best be described as:
A. the preparation and distribution of the financial statements.
B. the preparation and distribution of the corporate tax return.
C. the preparation and use of accounting information within the organization.
D. meeting the requirements of generally accepted accounting principles.

9. Simplifying assumptions made when using cost behavior pattern data include:
A. relevant range and liquidity.
B. fixed activity and linearity.
C. relevant range and linearity.
D. activity range and variability.

10. Which of the following is another term for mixed costs?
A. semifixed costs.
B. semivariable costs.
C. component costs.
D. none of these.

11. Cost behavior refers to:
A. costs that are both good and bad.
B. costs that increase at a quicker rate than others.
C. costs that decrease at a quicker rate than others.
D. costs that are variable or fixed.
E. none of these.

12. Knowledge about the behavior pattern of a cost is important to understanding the effect on net income of a change in sales volume because as sales volume changes:
A. net income will change proportionately.
B. the effect on net income will depend on the behavior pattern of various costs.
C. fixed costs will rise proportionately.
D. variable costs will not change.

13. An example of a cost likely to have a fixed behavior pattern is:
A. sales force commission.
B. production labor wages.
C. advertising cost.
D. electricity cost for packaging equipment.

14. An example of a cost likely to have a mixed behavior pattern is:
A. sales force commission.
B. raw material cost.
C. depreciation of production equipment.
D. electricity cost for the manufacturing plant.

15. The cost of a single unit of production in excess of the breakeven point in units is:
A. its fixed cost and variable cost.
B. its fixed cost only.
C. its variable cost only.
D. none of these.

16. To which function of management is Cost Volume Profit Analysis most applicable?
A. Planning.
B. Organizing.
C. Directing.
D. Controlling.
Use to information below to answer questions 17 & 18
Selling price per unit $ 100
Variable expenses per unit $ 40 Fixed expenses per month $60,000

17. The break-even point volume of units is:
A. 0
B. 360
C. 720
D. 1000

18. The break-even point in terms of total revenues per month is:
A. $30,000
B. $60,000
C. $75,000
D. $100,000

19. All of the following are characteristics of managerial accounting, except:
A. Reports are used primarily by insiders rather than by persons outside of the business entity.
B. Its purpose is to assist managers in planning and controlling business operations.
C. Information must be developed in conformity with generally accepted accounting principles or with income tax regulations.
D. Information may be tailored to assist in specific managerial decisions.

20. In comparison with a financial statement prepared in conformity with generally accepted accounting principles, a managerial accounting report is more likely to:

A. Be used by decision makers outside of the business organization
B. Focus upon the operation results of the most recently completed accounting period.
C. View the entire organization as the reporting entity.
D. Be tailored to the specific needs of an individual decision maker

21. Which of the following provides information that is intended primarily for use by internal management in decision making required to run the business?

A) Financial accounting
B) Management accounting
C)Tax accounting
D)Cost accounting

22. Which of the following is not a characteristic of management accounting information?
A) Timeliness is of importance
B) Decision-making authority is identified
C) Historically oriented
D) Measures efficiency and effectiveness
E) A means to an end, not an end in and of itself

23. Which of the following provides the framework for determining what information is to be included in financial statements and how that information is to be presented?
A) Generally accepted auditing standards
B) Generally accepted amortization standards
C) Accounting standards and practices
D) Securities and Exchange Commission
E) Generally accepted accounting principles

24. Which of the following provides information about the financial resources, obligations, and activities of an economic entity that is intended for use primarily by external decision makers?
A) Financial accounting
B) Management accounting
C) Tax accounting
D) Cost accounting

25. Costs that do not change when the activity base fluctuates are known as:
a. Variable costs
b. Discretionary costs
c. Fixed costs
d. Mixed costs

Part -b

1. List and discuss the characteristics of Management account vs. Financial Accounting.

	Management Accounting	Financial Accounting
For Example Service Perspective	Internal to Manager	External to investors & creditors

2. Explain the concept of break-even point. What is it an important tool in business planning?

3. Two students enrolled in managerial accounting were discussing about cost behavior. Student A said that fixed cost increases in total as level of output increases while student B disagrees. Who is correct and why. Give examples to support your answer.