Accounting final exam review

Which of the following statements does not describe a characteristic of management accounting?

• Approximate amounts rather than accurate amounts or refined estimates are often used in management accounting.

• Management accounting is more concerned with individual units of the organization rather than with the organization as a whole.

• Management accounting must conform to GAAP.

• Management accounting places a great deal of emphasis on the future.

Cost behavior refers to:

• Costs that increase at a quicker rate than others.

• Costs that are both good and bad.

• Costs that are variable or fixed.

• Costs that decrease at a quicker rate than others.

As the level of activity decreases:

• Variable cost per unit decreases.

• Variable cost remains constant in total.

• Fixed cost remains constant in total.

• Fixed cost per unit decreases.

An example of a cost that is likely to have a variable behavior pattern is:

• Salaries of production supervisors.

• Production labor wages.

• Depreciation of production equipment.

• Sales Supervisor salaries.

Which of the following is the correct calculation for the contribution margin ratio?

• Sales revenue divided by contribution margin.

• Contribution margin divided by variable costs.

• Sales revenue divided by variable costs.

• Contribution margin divided by sales revenue.

Operating income using the contribution margin format income statement is calculated as:

• Revenue – cost of goods sold = contribution margin – operating expenses.

• Revenue – cost of goods sold = contribution margin – fixed expenses.

• Revenue – variable expenses = contribution margin – fixed expenses.

• Revenue – variable expenses = gross profit – fixed expenses.

Which of the following activities is not part of the Management Process?

• Revisiting and adjusting plans.

• Implementation and management of plans.

• Data collection and performance feedback.

• Providing information to investors and creditors.

Selling price per unit $100

Variable expenses per unit $40

Fixed expenses per month $60,000

Operating income at a volume of 4,000 units per month is:

• $180,000.

• $200,000.

• $120,000.

• $240,000.

Which of the following costs would be classified as an indirect cost?

• real estate taxes

• production worker wages.

• production line maintenance costs.

• plant electricity.

An example of a cost that is likely to have a direct relationship with products being manufactured is:

• depreciation of production equipment.

• sales force salaries.

• salaries of production supervisors.

• production labor costs.