Accounting for Decision Making Final Exam

An example of a product cost is: - correct answer production line maintenance costs Which of the following is NOT an inventory account for a manufacturing company? - correct answer Cost of goods sold In order to achieve higher quality cost information from the assignment of overhead costs to products manufactured, the use of a predetermined overhead rate is being replaced by: - correct answer Activity-based cost The sequence of activities that add value to the organization are: - correct answer the value chain Which of the following is more relevant to management accounting than to cost accounting? - correct answer providing managers information for planning and control purposes. An example of a cost likely to have an indirect relationship with products being manufactured is: - correct answer electricity costs for packaging equipment. Direct costs pertain to costs that: - correct answer are traceable to a cost object Cost of goods manufactured can be computed as: - correct answer beginning balance of work in process + raw materials used + direct labor costs incurred + manufacturing overhead costs applied - ending balance of work in process. Which of the following costs would be classified as a period cost? - correct answer advertising expense for the product A predetermined overhead rate is used to: - correct answer assign indirect costs to cost objects. Which of the following items would be included in the operating expense budget? - correct answer sales commission A budget that is prepared for several periods in the future, then revised several times prior to the budget period is called a: - correct answer rolling budget Depreciation on the office equipment would appear in which of the following budgets? - correct answer operating expense budget What is the "key" to the entire operating budget? - correct answer the forecast of operating activity The budgeting process that most likely creates an attitude supportive of achieving organization goals is: - correct answer participative approach Standards are most appropriately used to - correct answer support the planning and control processes of the firm A budgeting process that involves justifying resources requirements based on an analysis and prioritization of organizational objectives is called: - correct answer zero-based budgeting Which of the following lists the components of the master budget in correct chronological order? - correct answer budgeted income statement, cash budget, budgeted balance sheet. Which of the following costs are included in the cost classification that is based on the relationship between total cost and volume of activity? - correct answer variable cost and fixed cost The operating budget depends on key information developed in the: - correct answer Sales forecast What should the decision rule be to determine what budget variances to investigate? - correct answer Investigate if the variance is significant. When analyzing end of period production cost variances, which of the following product cost components will not need "flexing"? - correct answer fixed manufacturing overhead.