MBA 5010 EXAM QUESTIONS WITH COMPLETE
ANSWERS 100% SOLVED
The role/objectives of managerial accounting? - ANSWER To enable managers and people
throughout an organization to make informed decisions be more effective at their jobs and
improve the organizations performance
Managers measure cost by tracing them to what? - ANSWER Cost objectives such as products
or services, sales territories, departments, or operating activities
What are period costs? (non-inventoriable) - ANSWER Costs of resources that are not
assigned to products. They are recognized as operating expenses on the income statement.
Examples: selling, administrative, and general expenses
What is managerial accounting? - ANSWER The profession that involves partnering in
management decision making, devising, planning, performance management systems, and
providing expertise in financial reporting to control to assist management in the formulation
and implementation of an organization's strategy
What are direct costs? - ANSWER Cost that can be measured conveniently and economically
by tracing them to a cost object. Examples: wages of workers who make candy bars > time
cards and payroll records..or..cost of chocolate main ingredients can easily be traced
What are product costs? (Inventoriable costs) - ANSWER Include direct materials, direct labor,
, and overhead (indirect costs). They are recognized on the income statement as cost of good
sold in on the balance sheet as inventory (indirect or direct costs)
Indirect costs? - ANSWER A cost that cannot be easily and conveniently traced to a specified
cost object Examples: nails used in furniture, salt used in candy
What is a sunk cost? - ANSWER 1. a cost that has already been paid and cannot be recovered
2. irrelevant to decision making
What is differential cost? (Incremental) - ANSWER A cost that changes between alternatives
What are fixed costs? - ANSWER Total cost that remain constant within a relevant range of
volume or activity
What are mixed costs? - ANSWER Costs that have both variable and fixed components
What are irrelevant costs? - ANSWER Costs that will not differ between the alternatives in
sunk costs
Opportunity cost? - ANSWER The benefits that are forfeited or lost when one alternative is
chosen over another. They arise when the choice of one course of action illuminates the
possibility of another course of action.
ANSWERS 100% SOLVED
The role/objectives of managerial accounting? - ANSWER To enable managers and people
throughout an organization to make informed decisions be more effective at their jobs and
improve the organizations performance
Managers measure cost by tracing them to what? - ANSWER Cost objectives such as products
or services, sales territories, departments, or operating activities
What are period costs? (non-inventoriable) - ANSWER Costs of resources that are not
assigned to products. They are recognized as operating expenses on the income statement.
Examples: selling, administrative, and general expenses
What is managerial accounting? - ANSWER The profession that involves partnering in
management decision making, devising, planning, performance management systems, and
providing expertise in financial reporting to control to assist management in the formulation
and implementation of an organization's strategy
What are direct costs? - ANSWER Cost that can be measured conveniently and economically
by tracing them to a cost object. Examples: wages of workers who make candy bars > time
cards and payroll records..or..cost of chocolate main ingredients can easily be traced
What are product costs? (Inventoriable costs) - ANSWER Include direct materials, direct labor,
, and overhead (indirect costs). They are recognized on the income statement as cost of good
sold in on the balance sheet as inventory (indirect or direct costs)
Indirect costs? - ANSWER A cost that cannot be easily and conveniently traced to a specified
cost object Examples: nails used in furniture, salt used in candy
What is a sunk cost? - ANSWER 1. a cost that has already been paid and cannot be recovered
2. irrelevant to decision making
What is differential cost? (Incremental) - ANSWER A cost that changes between alternatives
What are fixed costs? - ANSWER Total cost that remain constant within a relevant range of
volume or activity
What are mixed costs? - ANSWER Costs that have both variable and fixed components
What are irrelevant costs? - ANSWER Costs that will not differ between the alternatives in
sunk costs
Opportunity cost? - ANSWER The benefits that are forfeited or lost when one alternative is
chosen over another. They arise when the choice of one course of action illuminates the
possibility of another course of action.
