ACC 222 EXAM 1 QUESTIONS & ANSWERS
Which of the follow is not true?
A. Management accounting analyses incorporate forecasted data
B. Management accounting information is primarily prepared for internal use
C. Management accounting practices are laid down by the Accounting Standards Board
D. Qualitative data are an important element of a management accounting exercise -
Answer -C
Which one of the following items is NOT a management accounting function?
A. Financial management
B. Internal auditing
C. Purchasing
D. Decision-making - Answer -C
A strategic plan may best be described as
A. a detailed short term plan
B. a detailed long term plan
C. a broad short term plan
D. a broad long term plan - Answer -D
What does a management accountant mean by control?
A. the ability to ensure budgetary targets are met
B. the ability to discipline staff for inefficiency
C. the ability to implement policies in order to gain economic benefits
D. the ability to ensure an entity does what a management accountant recommends -
Answer -C
Which one of the following behavior patterns is inappropriate for a management
accountant?
A. Prepared to listen
B. Diplomatic
C. Helpful
D. Condescending - Answer -D
As a company's management accountant you would be primarily concerned with:
A. providing information to shareholders on how the management is doing
B. The annual reporting of financial performance
C. the reporting of past data
D. preparing plans and forecasts for the future activities of the business - Answer -D
In contrast to traditional costing, _______________ is allocating the overhead cost by
creating overhead rates based on activities that company performs
A. Absorption costing
B. Normal costing
, C. ABC (Activity Based Costing)
D. Service Costing - Answer -C
True or False: The cost driver is a factor, such as a machine hour, labor house, beds
occupied, etc., that causes overhead costs - Answer -True
A ________________ is used to charge manufacturing overhead cost to jobs that is
established in advance for each period. It is also known as overhead rate.
A. Absorption rate
B. Normal cost rate
C. Cost driver rate
D. Application rate - Answer -A
It is a method of allocating costs to homogeneous products by averaging costs over
large numbers of nearly identical products. Chemical, oil, plastics, mining, cement, food
processing, and glass industries use
A. Process costing
B. Normal costing
C. Job Order costing
D. Hybrid costing - Answer -A
It is a common type of absorption costing system and it is a method of allocating costs
to heterogeneous products are are readily identified by individual units, batches, etc.
Construction, furniture, aircraft, and service industries commonly use
A. Process costing
B. Normal costing
C. Job costing
D. Activity-Based costing - Answer -C
Which of the following is true?
A. Absorption rates will change continuously to reflect changes in output and costs
B. Overhead absorption rates will normally be based on estimates of what costs are
expected to be
C. Once set, overhead absorption rates will not change from one year to the next
D. Overhead absorption rates will only be calculated when all actual costs are known -
Answer -B
Overhead absorption exercises will be most useful where:
A. a departmental manager will be held responsible for the costs that are apportioned to
them
B. the market determines the selling price of a product (target costing or market-based
pricing)
C. selling prices can be based on costs (cost plus pricing or full cost pricing)
D. the total direct cost of a department is needed - Answer -C
Under-recovery (underapplied) of overheads occurs when:
Which of the follow is not true?
A. Management accounting analyses incorporate forecasted data
B. Management accounting information is primarily prepared for internal use
C. Management accounting practices are laid down by the Accounting Standards Board
D. Qualitative data are an important element of a management accounting exercise -
Answer -C
Which one of the following items is NOT a management accounting function?
A. Financial management
B. Internal auditing
C. Purchasing
D. Decision-making - Answer -C
A strategic plan may best be described as
A. a detailed short term plan
B. a detailed long term plan
C. a broad short term plan
D. a broad long term plan - Answer -D
What does a management accountant mean by control?
A. the ability to ensure budgetary targets are met
B. the ability to discipline staff for inefficiency
C. the ability to implement policies in order to gain economic benefits
D. the ability to ensure an entity does what a management accountant recommends -
Answer -C
Which one of the following behavior patterns is inappropriate for a management
accountant?
A. Prepared to listen
B. Diplomatic
C. Helpful
D. Condescending - Answer -D
As a company's management accountant you would be primarily concerned with:
A. providing information to shareholders on how the management is doing
B. The annual reporting of financial performance
C. the reporting of past data
D. preparing plans and forecasts for the future activities of the business - Answer -D
In contrast to traditional costing, _______________ is allocating the overhead cost by
creating overhead rates based on activities that company performs
A. Absorption costing
B. Normal costing
, C. ABC (Activity Based Costing)
D. Service Costing - Answer -C
True or False: The cost driver is a factor, such as a machine hour, labor house, beds
occupied, etc., that causes overhead costs - Answer -True
A ________________ is used to charge manufacturing overhead cost to jobs that is
established in advance for each period. It is also known as overhead rate.
A. Absorption rate
B. Normal cost rate
C. Cost driver rate
D. Application rate - Answer -A
It is a method of allocating costs to homogeneous products by averaging costs over
large numbers of nearly identical products. Chemical, oil, plastics, mining, cement, food
processing, and glass industries use
A. Process costing
B. Normal costing
C. Job Order costing
D. Hybrid costing - Answer -A
It is a common type of absorption costing system and it is a method of allocating costs
to heterogeneous products are are readily identified by individual units, batches, etc.
Construction, furniture, aircraft, and service industries commonly use
A. Process costing
B. Normal costing
C. Job costing
D. Activity-Based costing - Answer -C
Which of the following is true?
A. Absorption rates will change continuously to reflect changes in output and costs
B. Overhead absorption rates will normally be based on estimates of what costs are
expected to be
C. Once set, overhead absorption rates will not change from one year to the next
D. Overhead absorption rates will only be calculated when all actual costs are known -
Answer -B
Overhead absorption exercises will be most useful where:
A. a departmental manager will be held responsible for the costs that are apportioned to
them
B. the market determines the selling price of a product (target costing or market-based
pricing)
C. selling prices can be based on costs (cost plus pricing or full cost pricing)
D. the total direct cost of a department is needed - Answer -C
Under-recovery (underapplied) of overheads occurs when:
