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Name:__________________
Acctg 202
Chapters 1 & 2 Examination
Choose the best answer.
1. Employee empowerment involves encouraging and authorizing workers to take initiatives to:
A) improve operations.
B) reduce costs.
C) improve product quality.
D) improve customer service.
E) all of the above.
2. All of the following entities would have a need for managerial accounting information except:
A) General Motors (manufacturer).
B) Southwest Airlines (service firm).
C) Kmart (retailer).
D) New York City (non-profit, governmental agency).
E) None of the above responses are correct, as all of these entities would use managerial accounting information.
3. Managerial accounting:
A) involves the financial history of an organization.
B) is governed by GAAP.
C) focuses primarily on the needs of personnel within the organization.
D) provides information for parties external to the organization.
E) focuses on financial statements and other financial reports.
4. The day-to-day work of management teams will typically comprise all of the following activities except:
A) decision making.
B) planning.
C) cost minimizing.
D) directing operational activities.
E) controlling.
5. Managerial accounting differs from financial accounting because financial accounting is:
A) more oriented toward the future.
B) primarily concerned with external financial reporting.
C) concerned with nonquantitative information.
D) heavily involved with decision analysis and implementation of decisions.
E) none of the above.
6. Management should implement a different and/or more expensive accounting system only when:
A) the cost of the system exceeds the benefits.
B) management thinks it is appropriate.
C) the board of directors dictates a change.
D) the benefits of the system exceed the cost.
E) all of the above.
7. The key to a just-in-time, or JIT, production system is:
A) to provide products or services that do the best possible job of satisfying the customer.
B) the constant effort to eliminate waste, reduce response time, simplify the design of both products and processes, and improve quality and customer service.
C) the focus on the customer.
D) the "pull" approach to controlling manufacturing.
E) none of the above.
8. The objective(s) of a cost management system is (are):
A) to measure the cost of the resources consumed in performing the organization's significant activities.
B) to identify and eliminate non-value-added costs.
C) to determine efficeniency and effectiveness of all major activities performed in the enterprise.
D) to identify and evaluate new activities that can improve the future performance of the organization.
E) all of the above.
9. The IMA Code of Ethics includes an integrity standard, which requires the management accountant to:
A) avoid actual or apparent conflicts of interest and advise all appropriate parties of any potential conflict.
B) report any relevant information that could influence users of financial statements.
C) disclose confidential information when authorized by the firm or legally required.
D) refuse gifts from anyone.
E) all of the above.
10. Line positions are held by:
A) the top managerial and financial accountants in an organization.
B) the people responsible for raising capital and safeguarding the organizations's assets.
C) managers who are only indirectly involved in operations.
D) managers who are directly involved in the provision of goods and services or in the operation of the facility.
E) stockholders.
11. Variable costs are those costs that:
A) vary inversely with changes in activity.
B) vary directly with changes in activity.
C) remain constant as activity changes.
D) decrease on a per-unit basis as activity increases.
E) increase on a per-unit basis as activity increases.
12. As activity decreases, unit variable cost:
A) increases proportionately with activity.
B) decreases proportionately with activity.
C) remains constant.
D) increases by a fixed amount.
E) decreases by a fixed amount.
13. Fixed costs are those costs that:
A) vary directly with changes in activity.
B) vary inversely with changes in activity.
C) remain constant on a per-unit basis.
D) increase on a per-unit basis as activity increases.
E) remain constant as activity changes.
14. The fixed costs per unit are $10 when a company produces 10,000 units of product. What are the fixed costs per unit when 12,500 units are produced?
A) $4.
B) $6.
C) $8.
D) $10.
E) $12.
15. Total costs are $80,000 when 8,000 units are produced; of this amount, variable costs are $48,000. What are the total costs when 10,000 units are produced?
A) $80,000.
B) $92,000.
C) $98,000.
D) $100,000.
E) $108,000.
16. Costs that can be easily traced to a specific department are called:
A) direct costs.
B) indirect costs.
C) product costs.
D) manufacturing costs.
E) processing costs.
17. Midwest Motors manufactures automobiles Which of the following would not be classified as direct materials by the company?
A) Sheet metal used in the automobile's body.
B) Tires.
C) Interior leather.
D) CD player.
E) Wheel lubricant.
18. Selling and administrative expenses would likely appear on the balance sheet of:
A) American Airlines.
B) Wal-Mart Corporation.
C) Dell Computer.
D) all of the above firms.
E) none of the above firms.
19. The marginal cost when the twenty-first student enrolls in the school is:
A) $55.
B) $155.
C) $300.
D) $3,045.
E) $3,255.
20. The average cost per student when 16 students enroll in the school is:
A) $100.
B) $125.
C) $175.
D) $300.
E) $400.
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KEY