Syllabus A. Management Information

Question 1

Describe the purpose of cost and management accounting?

Answer 1

to provide information for planning, decision making and control

Question 2

What is cost accounting mainly concerned with?

Answer 2

• preparing statements
• cost data collection
• applying costs to inventory,products and services

Question 3

The main users of financial accounting information are __________ to an organisation.

Answer 3

external

Question 4

In management accounting, ______________ decides the best way to present information.

Answer 4

management

Question 5

Financial accounting presents __________ information

Answer 5

historical

Question 6

The purpose of management accounting is to aid in , __________ decision-making and ___________.

Answer 6

planning; control

Question 7

________ involves establishing objectives and selecting appropriate strategies to achieve these objectives.

Answer 7

Planning

Question 8

_____ is process by which actual performance of the organisation is compared against defined organisational plans.

Answer 8

Controlling

Question 9

A ________ is a possible course of action that might enable an organisation to achieve its objectives.

Answer 9

strategy

Question 10

Strategic information is mainly used by ______ management in an organisation.

Answer 10

senior

Question 11

Productivity measurements are examples of ______ information

Answer 11

tactical

Question 12

__________ information is required frequently by its main users

Answer 12

Operational

Question 13

_____is a process by which senior management make medium-term, more detailed plans for the next year, for e.g. how the resources of the business should be employed

Answer 13

tactical planning

Question 14

_____ involves making day to day operations. Front-line managers such as foremen have to ensure that specific tasks are planned.

Answer 14

operational planning

Question 15

What is Information?

Answer 15

Information is data that has been processed in such a way as to be meaningful to the person who receives it.

Question 16

_______ is the raw material for data processing

Answer 16

Data

Question 17

True or false?

Data on its own is meaningless.

Answer 17

True

Question 18

The benefits obtainable from the information must _____ the costs of acquiring it

Answer 18

exceed

Question 19

Information should be _____because using incorrect information could cause serious and damaging consequences

Answer 19

accurate

Question 20

Information must be relevant to the purpose for which a ______ wants it.

Answer 20

manager

Question 21

Information should be accessible via the ________ ________ of communication and to the right people

Answer 21

appropriate channels

Question 22

There is a possibility that management accounting information may ____ to meet the objective of assisting management in the decision-making process due to its failure to meet the requirements of good information

Answer 22

fail

Question 23

Not all information produced by accounting system is ______ to the decisions made by management

Answer 23

relevant

Question 24

______ is data collected especially for a specific purpose

Answer 24

Primary data

Question 25

_____ is data which can take on any value

Answer 25

continuous data

Question 26

Give examples of external sources of data. (2)

Answer 26

Government statistics & The Financial Times.

Question 27

____________may provide information concerning detailed labour costs

Answer 27

payroll system

Question 28

The ______is a global network allowing any computer with a telecommunications link to send and receive information to and from any other computer

Answer 28

internet

Question 29

In which economic time does consumer demand increase?

Answer 29

Boom

Question 30

If a company carries a high level of debt, it's cash flow will be affected by what?

Answer 30

An increase in interest rates

Question 31

__________ are identified with goods produced for resale.

Answer 31

Production costs

Question 32

_________ are not directly associated with production of manufactured goods.

Answer 32

Non-production costs

Question 33

Give examples of Production costs (3)

Answer 33

Direct material Direct labour Variable production overheads

Question 34

Give examples of Non-production costs (3)

Answer 34

Administrative costs Selling and distribution expenses Finance costs

Question 35

Indicate whether each event results in the incurrence of a production cost or a selling, distribution, administration or finance cost. i. Paid wages to production workers ii. Paid advertising iii. Purchased cars for sales staff iv. Used general office supplies

Answer 35

(i) production cost (ii) selling (iii) selling (iv) administration

Question 36

Indicate whether each event results in the incurrence of a production cost or a selling, distribution, administration or finance cost. i. Used raw materials in the manufacturing process ii. Paid wages to factory supervisors iii. Paid loan interest

Answer 36

(i) production cost (ii) overhead (iii) finance

Question 37

A manufacturing organisation incurs costs relating to the following: (1) Commission payable to salespersons. (2) Inspecting all products. (3) Packing the products at the end of the manufacturing process prior to moving them to the warehouse. Which of these costs are classified as production costs?

Answer 37

(2) Inspecting all products. | (3) Packing the products at the end of the manufacturing process prior to moving them to the warehouse.

Question 38

_________include all costs involved in running the general administration department of an organisation

Answer 38

administrative costs

Question 39

________ include all the costs that are incurred in order to finance an organisation, for e.g. loan interest

Answer 39

finance cost

Question 40

The three major cost components of manufacturing a product are

Answer 40

direct materials direct labour factory overhead

Question 41

________includes all cost of materials purchased for production raw materials and components

Answer 41

materials

Question 42

Identify whether the following costs are direct or indirect materials, labour or expenses. i. Wages of factory production workers ii. Salaries of factory supervisors iii. Rent of a factory

Answer 42

(i) dir labour (ii) indir labour (iii) indir expense

Question 43

Identify whether the following costs are direct or indirect materials, labour or expenses. i. Oil for lubricating machines ii. Packing material

Answer 43

(i) indir material | (ii) dir material

Question 44

Which one of the following should be classified as indirect labour? - Assembly workers on a car production line - Bricklayers in a house building company - Machinists in a factory producing clothes - Forklift truck drivers in the stores of an engineering company

Answer 44

Forklift truck drivers in the stores of an engineering company

Question 45

In an organisation, manufacturing a number of different products in one large factory, the rent of that factory is an example of a direct expense when costing a product. Is this statement true or false?

Answer 45

False

Question 46

______ materials are materials which cannot be traced in the finished product, for example, oil for machines in the production line.

Answer 46

Indirect

Question 47

_______costs not directly charged to production. Examples are rent, rates and insurance of a factory, depreciation, fuel, power maintenance of plant, machinery and buildings.

Answer 47

indirect expenses

Question 48

Electricity bill is classified as

Answer 48

semi-variable cost

Question 49

Raw material is classified as

Answer 49

variable cost

Question 50

Rent of factory is classified as

Answer 50

fixed cost

Question 51

Supervisors’ wages (more supervisors required as the number of employees increases) is classified as

Answer 51

stepped fixed costs

Question 52

A semi-variable cost is one that, in the short term, remains the same over a given range of activity but beyond that increases and then remains constant at the higher level of activity. Is this statement true or false?

Answer 52

False

Question 53

Straight line depreciation of machinery is classified as

Answer 53

A fixed cost

Question 54

A stepped fixed cost is only fixed within certain levels of activity. The depreciation of a machine may be fixed if production remains below 1,000 units per month. If production exceeds 1,000 units, a second machine may be required, and the cost of depreciation (on two machines) would go up a step. True or False?

Answer 54

True

Question 55

A ____ _____ is any activity for which a separate measurement of cost is undertaken.

Answer 55

Cost object

Question 56

_____ is a unit of product or service in relation to which costs are ascertained. E.g room, a course, one litre of paint

Answer 56

Cost Units

Question 57

For which of the following is a profit centre manager responsible?

Answer 57

Costs and revenues

Question 58

Which of the following is a characteristic of an investment centre? - Managers can purchase capital assets - Managers have control only over marketing - Managers are accountable for revenues only - Managers are accountable for costs only

Answer 58

Managers can purchase capital assets

Question 59

A cost centre is

Answer 59

A production or service location, function, activity or item of equipment for which costs are accumulated

Question 60

A cost center is a production or service location, function, activity or item of equipment whose costs are identified and recorded, e.g. manufacturing department, purchasing department and paint shop. true or false?

Answer 60

true

Question 61

Revenue center managers.....

Answer 61

will want information on markets and new products and they will look closely at pricing and the sales performance of competitors in addition to monitoring revenue figures.

Question 62

The manager here will want the same information as the profit centre manager and in addition they will require quite detailed appraisals of possible investments and information regarding the results of investments already undertaken.

Answer 62

Investment Centre

Question 63

The manager here will want information regarding both revenues and costs. They will be judged on the profit margin achieved by their division.

Answer 63

Profit Centre

Question 64

When producing written reports, the management accountant needs to determine the type of document required and establish the user of the information. true or false?

Answer 64

true

Question 65

``` Last year, a company made the following sales in each of its four stores which it has in different areas of the country. Store 1 $30,000 Store 2 $25,000 Store 3 $70,000 Store 4 $75,000 ``` Total $200,000 Using a pie chart to represent the proportion of sales which each store has made last year, what would be the angle of the section to represent the sales from store 3?

Answer 65

126° 70000 / 200000 X 360° = 126°

Question 66

Identify the correct formula for calculating the segment angles in a pie chart

Answer 66

The segment value divided by the total value multiplied by 360

Question 67

Which of these are types of bar chart? i. Component bar chart ii. Composite bar chart iii. Percentage component bar chart iv. Simple bar chart

Answer 67

i. Component bar chart iii. Percentage component bar chart iv. Simple bar chart

Question 68

Which one of the following statements is true? - The independent variable is shown on the y axis - The dependent variable is shown on the y axis - The x axis is the vertical axis - The y axis is the horizontal axis

Answer 68

The dependent variable is shown on the y axis

Question 69

What is the independent variable?

Answer 69

A fixed point of measurement not affected by another variable

Question 70

Product B is made up as follows: Material W: $2,000 Material X: $1,000 Material Y: $4,000 Material Z: $2,000 If the material proportions were displayed on a pie chart, how many degrees would Material Y represent?

Answer 70

160 degrees 4,000 / 9000 x 360 = 160 degrees

Question 71

1. Clarity of presentation of information can be further improved if data is presented in the form of charts or graphs. 2. A bar chart is widely used method of illustrating quantitative data. - both statements are true - both statements are false - statement 1 is false - statement 2 is false

Answer 71

both statements are true

Question 72

A __________________ is one where there is more than one bar for each subdivision of the chart. For example, if the sales per product for each year are given then of each year there could be a separate bar for each product.

Answer 72

compound bar chart

Question 73

A company's sales in the last year in its three different markets were as follows: ``` $ Market 1 100,000 Market 2 150,000 Market 3 50,000 Total 300,000 ``` In a pie chart representing the proportion of the sales made in each market what would be the angle of the section representing Market 3 (to the nearest whole degree)?

Answer 73

60 degrees Total number of degrees = 360 Proportion of market 3 sales: (5,000/300,000) x 360 = 60 degrees

Question 74

You have been asked to make a pie-chart from the following information that relates to costs incurred in different departments of the factory: ``` Dept A $560 Dept B $330 Dept C $215 Dept D $746 Dept E $662 Dept F $452 ``` What is the angle in pie-chart representing Department D? Round your answer to one decimal place.

Answer 74

Total cost = $560 + $330 + $215 + $746 + $662 + $452 = $2,965 Dept D = $746 / $2,965 x 360 degrees = 90.6 degrees