Exam 1

Question 1

Managerial Accounting

Answer 1

the process of providing financial and non-financial information to managers to aid in decision-making

Question 2

Planning

Answer 2

setting goals and objectives, and how to achieve them

Question 3

Directing

Answer 3

overseeing the company’s day-to-day operations

Question 4

Controlling

Answer 4

evaluating the results of business operations and making adjustments as needed

Question 5

Critical Thinking and Judgment

Answer 5

applying insight to improve decision-making

Question 6

Valued Financial Advisors

Answer 6

providing expertise to drive business success

Question 7

Assist in Business Decisions

Answer 7

key players in areas such as marketing, entrepreneurship, and sales

Question 8

Institute of Management Accountants (IMA)

Answer 8

lead in developing, certifying, connecting, and supporting accountants and financial professionals within organizations

Question 9

Unethical Behavior

Answer 9

may not be illegal but violates accepted moral principles

Question 10

Illegal Behavior

Answer 10

always unethical, as it breaks laws

Question 11

Knowledge Economy

Answer 11

the service sector dominates over traditional sectors like manufacturing, agriculture, and retail

Question 12

Sustainability

Answer 12

the ability to meet present needs without compromising future generations

Question 13

Triple Bottom Line

Answer 13

recognizes a company’s performance should be viewed in terms of people, planet, and profit

Question 14

Sarbanes-Oxley Act of 2002 (SOX)

Answer 14

restores trust in publicly traded corporations and their financial statements after scandals like Enron and WorldCom

Question 15

Service Company

Answer 15

sells intangible services

Question 16

Merchandising Companies

Answer 16

resell tangible products bought from manufacturers and suppliers

Question 17

Manufacturing Companies

Answer 17

use labor, plants, and equipment to onset raw materials into finished products

Question 18

Research and Development

Answer 18

researching and developing new or improved products or services and the processes for producing them

Question 19

Design

Answer 19

detailed engineering of products and services and the processes for producing them

Question 20

Production or Purchases

Answer 20

resources used by manufacturers to produce a product or merchandising companies to purchase finished merchandise for resale

Question 21

Marketing

Answer 21

promotion and advertising of products or services

Question 22

Distribution

Answer 22

delivery of products or services to customers

Question 23

Customer Service

Answer 23

support provided for customers after sale

Question 24

Cost Objects

Answer 24

anything for which managers want to know the cost

Question 25

Direct Costs

Answer 25

costs that can be easily and cost-effectively traced to the cost object; readily associate the cost with the cost object

Question 26

Indirect Cost

Answer 26

costs that relate to the cost object but cannot be traced specifically to it

Question 27

Overhead

Answer 27

costs that occur in the factory that are not direct labor or materials

Question 28

Total Cost

Answer 28

all resources used throughout the value chain

Question 29

Product Costs

Answer 29

incurred by manufacturers to produce their products or by merchandisers to purchase their products

Question 30

Period Costs

Answer 30

do not get treated as inventory, immediately expensed

Question 31

Direct Materials

Answer 31

primary materials that become the physical part of the finished product

Question 32

Direct Labor

Answer 32

cost of compensating employees who physically convert raw materials into the company's product

Question 33

Indirect Materials

Answer 33

cost insignificant parts of the product

Question 34

Indirect Labor

Answer 34

people in the plant who are not directly making the product

Question 35

Prime Costs

Answer 35

direct materials + direct labor

Question 36

Conversion Costs

Answer 36

manufacturing overhead + direct labor

Question 37

Perpetual Inventory System

Answer 37

inventory labeled with a unique barcode that reflects sales price and product cost

Question 38

Periodic Inventory System

Answer 38

calculated at the end of the period

Question 39

Controllable Costs

Answer 39

management can influence or change

Question 40

Uncontrollable Costs

Answer 40

costs companies are locked into in the short run

Question 41

Relevant Costs

Answer 41

differential costs differ among alternatives

Question 42

Irrelevant Costs

Answer 42

do not differ among alternatives

Question 43

Sunk Costs

Answer 43

costs that have already been incurred and cannot be changed

Question 44

Fixed Costs

Answer 44

stays constant in total over a wide range of activity levels

Question 45

Variable Costs

Answer 45

change in total in direct proportion to changes in volume

Question 46

Marginal Costs

Answer 46

the cost of making one more unit

Question 47

Total Cost

Answer 47

total fixed cost + (variable cost per unit * number of units)

Question 48

Average Cost

Answer 48

total cost/number of units

Question 49

Process Costing

Answer 49

mass production of identical units

Question 50

Job Costing

Answer 50

unique, custom-ordered products in relatively small batches

Question 51

Stock Inventory

Answer 51

products sold regularly

Question 52

Production Schedule

Answer 52

indicates quantity and types of inventory scheduled to be manufactured during the period

Question 53

Bill of Materials

Answer 53

lists all raw materials needed to manufacture a job

Question 54

Raw Materials Record

Answer 54

shows detailed information about each item in stock

Question 55

Purchase Order

Answer 55

purchasing department issues to suppliers to order any parts not in stock

Question 56

Receiving Report

Answer 56

incoming raw materials are counted and recorded on receiving report

Question 57

Invoice

Answer 57

bill from the supplier

Question 58

Job Cost Record

Answer 58

tracks all direct materials and direct labor used and manufacturing overhead allocated to each job

Question 59

Material Requisition

Answer 59

internal documents sent to a warehouse manager to request materials needed for production