Managerial Accounting Exam Questions
And Answers
Why could overhead costs be different for product? - ANS Size/number batches could be
very different, one is much more complex to make, one may be newer, need more quality
control.
External Failure costs - ANS includes product recalls, warranty costs, and legal fees.
Value Engineering - ANS Involves analyzing the functionality of a product to determine
which functions add value to the customer and then finding ways to deliver those functions while
meeting target cost.
Non-value added - ANS Activities such as expending an order or scheduling a production
run.
Activity based management - ANS when managers use activity-based costing data to
improve operations or reduce cost
Cost driver - ANS In a volume based cost system, varies in direct relation to volume
Product level - ANS include research and development and product testing.
non-volume-based - ANS measures include the number or quality inspections and the
number of design changes.
First - ANS This stage of ABC is assigning indirect costs to activity cost pools with the goal
to create as few pools as possible.
Activity proportion - ANS Dividing the activity demands of each individual product by the
total quantity of the cost driver.
Volume based cost systems - ANS tend to under cost low-volume, customized, or complex
products.
And Answers
Why could overhead costs be different for product? - ANS Size/number batches could be
very different, one is much more complex to make, one may be newer, need more quality
control.
External Failure costs - ANS includes product recalls, warranty costs, and legal fees.
Value Engineering - ANS Involves analyzing the functionality of a product to determine
which functions add value to the customer and then finding ways to deliver those functions while
meeting target cost.
Non-value added - ANS Activities such as expending an order or scheduling a production
run.
Activity based management - ANS when managers use activity-based costing data to
improve operations or reduce cost
Cost driver - ANS In a volume based cost system, varies in direct relation to volume
Product level - ANS include research and development and product testing.
non-volume-based - ANS measures include the number or quality inspections and the
number of design changes.
First - ANS This stage of ABC is assigning indirect costs to activity cost pools with the goal
to create as few pools as possible.
Activity proportion - ANS Dividing the activity demands of each individual product by the
total quantity of the cost driver.
Volume based cost systems - ANS tend to under cost low-volume, customized, or complex
products.
