Ch 1 & 2

Question 1

A field of accounting that provides economic and financial information for managers and other internal users

Answer 1

Managerial accounting

Question 2

What type of accounting applies to all types of businesses?

Answer 2

Managerial accounting

Question 3

What type of accounting applies to all forms of businesses

Answer 3

Manager accounting

Question 4

True or false managerial accounting is more responsible for strategic cost management

Answer 4

True

Question 5

Financial accounting focusses on the past. What does manager accounting focus on?

Answer 5

The future, and the present

Question 6

True or false primary users of managerial accounting information are external users

Answer 6

False

Question 7

Management activities and responsibilities can be classified into what three broad functions

Answer 7

Planning, controlling directing

Question 8

What broad section of managerial accounting is this? Future oriented. Establishing objectives such as, maximizing short term, profit and market share, committing to environmental protection, contributing to social programs. The key objective is to add value to the business.

Answer 8

Planning

Question 9

What broad function of managerial is this? Coordinate diverse activities and human resources. Implement planned objectives. Provide incentives to motivate employees. Higher and training employees, including executives, managers, and supervisors.

Answer 9

Directing

Question 10

What broad function of managerial accounting is this? Keep activities on track. Determine whether goals are met. Decide on the changes. Needed to get back on track. Typically use a formal system of evaluation.

Answer 10

Controlling

Question 11

True or false? Good ethics equals good business.

Answer 11

True

Question 12

What does IMA stand for?

Answer 12

Institute of management accountants

Question 13

Confidence, confidentiality, integrity, credibility

Answer 13

IMA members have a responsibility to comply with

Question 14

What does CPA stand for?

Answer 14

Chartered, professional accountants of Canada

Question 15

What accounting group promotes high standards of ethics in accounting profession, including managerial accounting

Answer 15

CPA Canada

Question 16

Considers not only profitability, but also the companies efforts to employee sustainable business practises regarding its employees and the environment

Answer 16

Corporate social responsibility

Question 17

What is corporate social responsibility often referred to as

Answer 17

The triple bottom line

Question 18

Why is corporate social responsibility often referred to as the triple bottom line

Answer 18

Because it evaluates a companies performance, with regard to people, planet, profits

Question 19

Anything from which we want to accumulate costs

Answer 19

Cost object

Question 20

A hamburger made by a restaurant, providing a haircut, preparing a tax return for a client, building a house

Answer 20

An example of a cost object

Question 21

Costs incurred only because the company manufactures their cost object

Answer 21

Product costs

Question 22

Costs incurred because the company is in business

Answer 22

Period costs

Question 23

What materials are basic materials and parts used in manufacturing

Answer 23

Raw materials

Question 24

Raw materials that can be physically, directly, and easily associated with the finish product are called

Answer 24

Direct materials

Question 25

Flower in the baking of bread, syrup in the bottling of soft drinks, steel used in the making automobiles

Answer 25

Examples of direct materials

Question 26

Work completed by employees that can be physically directly and easily associated with converting materials into finished goods is called what

Answer 26

Direct labour

Question 27

Legal staff at a law firm, mechanics at a vehicle, service department, type setters at a newspaper

Answer 27

Examples of direct labour

Question 28

Raw materials that cannot be easily associated with the cost object are called what

Answer 28

Indirect materials

Question 29

True or false indirect materials are considered part of of manufacturing overhead

Answer 29

True

Question 30

Lubricants, cleaning supplies, polishing compounds

Answer 30

Examples of indirect materials that may not physically become a part of the finish product

Question 31

Work completed by employees that has no direct physical association with the finished product, or for which it is impractical to trace to the goods produced

Answer 31

Indirect labour

Question 32

Wages of maintenance, workers, janitors, and factory security guards. Supervisors.

Answer 32

Examples of indirect labour

Question 33

Sum of all direct materials and direct labour costs

Answer 33

Prime. Cost

Question 34

True or false prime costs are all indirect manufacturing costs

Answer 34

False prime costs are all direct manufacturing cost

Question 35

The cost of converting raw materials into a final product

Answer 35

Conversion costs

Question 36

Sum of direct labor, and manufacturing overhead costs

Answer 36

Conversion costs

Question 37

True, or false, direct labour is a component of both prime and conversion costs

Answer 37

True

Question 38

Consists of the direct material, cost, direct, labour cost, and manufacturing overhead cost.

Answer 38

Product costs

Question 39

This type of cost is recorded as inventory when incurred. It becomes an expense to the business when the finish good is sold

Answer 39

Product cost

Question 40

Matched with revenue, earned within a specific time. And charged to expense as incurred. Non-manufacturing costs. Deducted from revenues period incurred. Non-manufacturing costs. Deducted from revenues and incurred to determine that income. Include all, selling and marketing, expenses, general and administrative expenses.

Answer 40

period costs

Question 41

The study of how specific costs respond to changes in the level of business activity. As activity levels change, some cost to change, and others will remain unchanged. Applies to all type of businesses and entities. Helps management to plan operations and make decisions. Cost behaviour analysis begins by identifying and measuring key business activities.

Answer 41

Cost behaviour analysis

Question 42

What may be expressed in terms of, number of units, produced, sales, dollars, kilometres driven, room, occupancy, dance classes taught

Answer 42

Activity levels

Question 43

What needs to happen for an activity level to be useful?

Answer 43

Changes in the level of volume of activity should be correlated with changes in cost

Question 44

The activity level selected is called

Answer 44

The activity or volume index

Question 45

What identifies the activity that causes changes in the behaviour of costs. Allows costs to be classified according to their response to changes in activities as variable cost fixed cost and mix cost.

Answer 45

The activity or volume index

Question 46

Cost very in total directly and proportionally with changes in the activity level

Answer 46

Variable costs

Question 47

Direct material and direct labour for manufacturer, sales commissions, for merchandiser, gasoline and airlines, and trucking companies

Answer 47

Examples of variable costs

Question 48

Costs that remain the same in total within the relevant range, regardless of changes in the activity level

Answer 48

Fixed costs

Question 49

Property, taxes, insurance, rent, depreciation on buildings and equipment

Answer 49

Examples of fixed costs

Question 50

Cost the very in total directly and proportionally with the changes in activity level. These costs remain the same per unit unit at energy level of activity.

Answer 50

Variable costs

Question 51

Costs that remain the same in total within the relevant range, regardless of changes in the activity level. Fix costs per unit, very inversely with activity in other words as volume increases, unit cost decrease, and vice versa.

Answer 51

Fixed costs

Question 52

Throughout the range of possible levels of activity, a straight line relationship usually does not exist for either variable cost or fixed cost

Answer 52

Use the relevant range

Question 53

The relationship between variable costs and changes and activity level is often

Answer 53

Curve linear

Question 54

For fixed costs, the relationship is what type of linear

Answer 54

Non-linear

Question 55

Defined as the range of activity over which accompany expects to operate during a year. Within this range, a straight line relationship usually exists for both variable and fixed costs.

Answer 55

Relevant range

Question 56

Costs that have both a variable and a fixed cost component. Sometimes called semi variable cost.

Answer 56

Mixed cost

Question 57

What type of cost changes in total but not proportionally with the changes in activity level

Answer 57

Mixed cost

Question 58

Mixed costs must be classified into their fixed and variable elements. Which approach is used to separate the costs.

Answer 58

The high low method

Question 59

What method uses the total costs incurred at both high and low levels of activity. The difference in costs between the high and low levels, represent and variable cost, since only a variable cost change as activity levels change.

Answer 59

The high low method

Question 60

Determine variable cost per unit using the following formula. Change in total costs at high versus low activity level divided by high minus low activity level equals variable cost per unit.

Answer 60

Step one of the high low method

Question 61

Determine the fixed costs by subtracting the total variable cost at either the high or the low activity level from the total cost at that level

Answer 61

Step two of the high low method