ACC 241 Exam 1 Questions & Answers
100% Correct!!
Primary responsibilities of a manager - ANSWERSPlanning - setting goals for company
and determining how to achieve them
Directing - overseeing companies day to day operation
Controlling - evaluating results of the business operation against the plan and making
adjustments to keep company pressing towards goal
Evaluating
management accounting - ANSWERSspecializes in the study of how managers use
accounting and/or financial information in current or future business decisions.
Management accountants use both qualitative and quantitative information in their work.
Unlike other accountants, they primarily report to the internal management of a
company, rather than to an external body like shareholders or tax collection agencies.
financial accounting - ANSWERSproduces annual and quarterly consolidated financial
statements that will be used by investors and creditors to make investment and lending
decisions. Must follow GAAP (Generally Accepted Accounting Principles)
Skills of management accountants - ANSWERSin order to become a certified
management accountant, one must pass a series of tests sponsored by the Institute of
Management Accountants. These tests examine one's knowledge in four subjects:
business analysis, management accounting and reporting, strategic management, and
business applications.
IMA (Institute of Management Accountants - ANSWERSA forum for research, practice
development, education, knowledge sharing, and the advocacy of the highest ethical
and best business practices in management accounting and finance.
Ethical decision-making framework - ANSWERSIMA's Statement of Ethical Professional
Practice: Maintain professional competence, preserve confidentiality of info they handle,
uphold integrity & perform duties with integrity.
Purpose and major provisions of the Sarbanes-Oxley - ANSWERSRestore trust in
publicly traded corporations, their management, their financial statements, & their
auditors.
Service, merchandising and manufacturing companies & their inventories - ANSWERSS
- sell intangible things (medicare, coaching) generally don't have inventory
Me - Like Walmart resell tangible products. Have inventory and incur inventory related
costs (ads, travel)
, Ma - use labor, plant, and equipment to convert raw materials into a product. Like car
companies. Have Raw materials inventory, work in process inventory, & finished goods
inventory.
Value-chain - ANSWERSLinked set of all value-creating processes or activities that
convert basic input materials into products or services for the final consumer.
Cost Objects - ANSWERSAnything for which cost data is desired by a manager, e.g.,
products, product lines, customers, jobs, and organizational sub-units such as
departments or divisions of a company.
Direct Costs - ANSWERSA cost that can be directly related to producing specific goods
or performing a specific
service.
Indirect Costs - ANSWERSManufacturing cost that cannot be easily seen in the
product. Electricity, hazard insurance on the factory building, and real estate taxes are
examples of indirect costs.
Inventoriable Costs (Direct Material, Direct Labor, and Manufacturing Overhead) -
ANSWERSAll costs of a product that are recorded as an asset (inventory) under US
GAAP (direct materials, direct labor and manufacturing overhead). These costs are not
expensed until the related product is sold.
Period Costs - ANSWERSExpenses recognized as costs in the period in which they
were incurred; often referred to
as operating expenses, or selling, general and administrative expenses.
Prime Costs vs Conversion Costs - ANSWERSPC - The sum of direct material and
direct labor costs.
CC - The combined total of direct labor cost and manufacturing overhead incurred in
processing raw materials to a finished state.
Controllable Costs vs Uncontrollable Costs - ANSWERSCC - Expenditures that are
subject to the discretion of a manager and, hence, can be kept within predefined limits.
UC -
Relevant Costs vs Irrelevant Costs - ANSWERSR - Are considered when allocating a
price
IR - are unnecessary when allocating price
Fixed Costs vs Variable Costs - ANSWERSFC - A cost that does not vary depending on
production or sales levels, such as rent, property tax, insurance, or interest expense.
VC - A cost that is directly proportional to the volume of output produced.
100% Correct!!
Primary responsibilities of a manager - ANSWERSPlanning - setting goals for company
and determining how to achieve them
Directing - overseeing companies day to day operation
Controlling - evaluating results of the business operation against the plan and making
adjustments to keep company pressing towards goal
Evaluating
management accounting - ANSWERSspecializes in the study of how managers use
accounting and/or financial information in current or future business decisions.
Management accountants use both qualitative and quantitative information in their work.
Unlike other accountants, they primarily report to the internal management of a
company, rather than to an external body like shareholders or tax collection agencies.
financial accounting - ANSWERSproduces annual and quarterly consolidated financial
statements that will be used by investors and creditors to make investment and lending
decisions. Must follow GAAP (Generally Accepted Accounting Principles)
Skills of management accountants - ANSWERSin order to become a certified
management accountant, one must pass a series of tests sponsored by the Institute of
Management Accountants. These tests examine one's knowledge in four subjects:
business analysis, management accounting and reporting, strategic management, and
business applications.
IMA (Institute of Management Accountants - ANSWERSA forum for research, practice
development, education, knowledge sharing, and the advocacy of the highest ethical
and best business practices in management accounting and finance.
Ethical decision-making framework - ANSWERSIMA's Statement of Ethical Professional
Practice: Maintain professional competence, preserve confidentiality of info they handle,
uphold integrity & perform duties with integrity.
Purpose and major provisions of the Sarbanes-Oxley - ANSWERSRestore trust in
publicly traded corporations, their management, their financial statements, & their
auditors.
Service, merchandising and manufacturing companies & their inventories - ANSWERSS
- sell intangible things (medicare, coaching) generally don't have inventory
Me - Like Walmart resell tangible products. Have inventory and incur inventory related
costs (ads, travel)
, Ma - use labor, plant, and equipment to convert raw materials into a product. Like car
companies. Have Raw materials inventory, work in process inventory, & finished goods
inventory.
Value-chain - ANSWERSLinked set of all value-creating processes or activities that
convert basic input materials into products or services for the final consumer.
Cost Objects - ANSWERSAnything for which cost data is desired by a manager, e.g.,
products, product lines, customers, jobs, and organizational sub-units such as
departments or divisions of a company.
Direct Costs - ANSWERSA cost that can be directly related to producing specific goods
or performing a specific
service.
Indirect Costs - ANSWERSManufacturing cost that cannot be easily seen in the
product. Electricity, hazard insurance on the factory building, and real estate taxes are
examples of indirect costs.
Inventoriable Costs (Direct Material, Direct Labor, and Manufacturing Overhead) -
ANSWERSAll costs of a product that are recorded as an asset (inventory) under US
GAAP (direct materials, direct labor and manufacturing overhead). These costs are not
expensed until the related product is sold.
Period Costs - ANSWERSExpenses recognized as costs in the period in which they
were incurred; often referred to
as operating expenses, or selling, general and administrative expenses.
Prime Costs vs Conversion Costs - ANSWERSPC - The sum of direct material and
direct labor costs.
CC - The combined total of direct labor cost and manufacturing overhead incurred in
processing raw materials to a finished state.
Controllable Costs vs Uncontrollable Costs - ANSWERSCC - Expenditures that are
subject to the discretion of a manager and, hence, can be kept within predefined limits.
UC -
Relevant Costs vs Irrelevant Costs - ANSWERSR - Are considered when allocating a
price
IR - are unnecessary when allocating price
Fixed Costs vs Variable Costs - ANSWERSFC - A cost that does not vary depending on
production or sales levels, such as rent, property tax, insurance, or interest expense.
VC - A cost that is directly proportional to the volume of output produced.
