MA 1  medio chiuso
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MA 1 medio chiuso

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Questions and Answers

Which type of cost includes executive, organizational, and clerical costs?

  • Non-manufacturing costs (correct)
  • Common costs
  • Indirect costs
  • Direct costs
  • What type of costs are easily traced to a unit of product, such as direct material and direct labor?

  • Common costs
  • Direct costs (correct)
  • Indirect costs
  • Non-manufacturing costs
  • What type of costs include manufacturing overhead and cannot be easily traced to a unit of product?

  • Indirect costs (correct)
  • Direct costs
  • Non-manufacturing costs
  • Common costs
  • Which type of costs are incurred to support multiple cost objects and cannot be directly associated with a single cost object?

    <p>Common costs</p> Signup and view all the answers

    What type of costs are relevant for evaluating cost of goods sold and inventory on financial statements?

    <p>Product costs</p> Signup and view all the answers

    When are product costs attached to a unit of product and remain attached to each unit in inventory until sold?

    <p>At the end of the production process</p> Signup and view all the answers

    What is the main difference between managerial accounting and financial accounting?

    <p>Managerial accounting focuses on providing information for internal use, while financial accounting focuses on providing information for external use.</p> Signup and view all the answers

    What is the primary audience for managerial accounting information?

    <p>Internal management at all levels of the organization.</p> Signup and view all the answers

    How does the scope of managerial accounting differ from financial accounting?

    <p>Managerial accounting has a broader scope and uses free formats, while financial accounting follows specific accounting principles.</p> Signup and view all the answers

    What type of information does managerial accounting primarily provide?

    <p>Quantitative information for internal decision-making.</p> Signup and view all the answers

    How does the use of information differ between managerial accounting and financial accounting?

    <p>Managerial accounting uses information for internal decision-making, while financial accounting uses information for external reporting.</p> Signup and view all the answers

    What distinguishes the formats used in managerial accounting from those used in financial accounting?

    <p>Managerial accounting uses free formats, while financial accounting follows specific accounting principles.</p> Signup and view all the answers

    Which statement best describes the treatment of direct labor and manufacturing overhead costs in the production process?

    <p>They are added to work in process for converting direct materials into finished goods.</p> Signup and view all the answers

    What is the characteristic of variable costs in relation to changes in the level of activity?

    <p>They vary in direct proportion to changes in the level of activity.</p> Signup and view all the answers

    What distinguishes committed fixed costs from discretionary fixed costs?

    <p>Committed fixed costs are long-term and cannot be significantly reduced in the short term, while discretionary fixed costs may be altered in the short term by current managerial decisions.</p> Signup and view all the answers

    What is the defining characteristic of relevant costs in decision-making?

    <p>They depend on the decision-making setting and involve choosing between alternatives.</p> Signup and view all the answers

    How are sunk costs treated in decision-making?

    <p>They have already been incurred and cannot be changed now or in the future, and should be ignored when making decisions.</p> Signup and view all the answers

    For what purpose is the traditional format for income statements primarily used?

    <p>External reporting purposes</p> Signup and view all the answers

    What is the primary focus of financial accounting?

    <p>Companywide reports and compliance with GAAP/IFRS</p> Signup and view all the answers

    What is a requirement to become a Certified Management Accountant (CMA)?

    <p>Bachelor's degree, two years of relevant professional experience, and passage of the CMA exam</p> Signup and view all the answers

    What does the Chartered Global Management Accountant (CGMA) designation require?

    <p>Bachelor's degree in accounting, passage of the CPA exam, membership in the AICPA, three years of relevant management accounting work experience, and passage of the CGMA exam</p> Signup and view all the answers

    What is the focus of managerial accounting courses?

    <p>Teaching measurement skills to support planning, controlling, and decision-making activities, and focusing on cost concepts</p> Signup and view all the answers

    What does the Institute of Management Accountants (IMA) estimate about professional accountants in the U.S.?

    <p>Over 80% work in non-public accounting environments</p> Signup and view all the answers

    What is the emphasis of financial accounting?

    <p>Historical perspective and emphasis on objectivity and verifiability</p> Signup and view all the answers

    What does the degree of operating leverage (DOL) measure in cost-volume-profit analysis?

    <p>The percentage change in profit associated with a change in volume or sales</p> Signup and view all the answers

    What does the contribution margin represent in cost-volume-profit analysis?

    <p>The amount remaining from sales revenue after variable expenses have been deducted</p> Signup and view all the answers

    What does the break-even quantity represent in cost-volume-profit analysis?

    <p>The level of sales at which total revenues equal total costs</p> Signup and view all the answers

    What does the contribution income statement help managers assess in cost-volume-profit analysis?

    <p>The impact on profits of changes in selling price, cost, or volume</p> Signup and view all the answers

    What assumption do managers typically make for cost-volume-profit calculations?

    <p>Constant selling price, linear costs, and constant product mix</p> Signup and view all the answers

    What is the formula for calculating the margin of safety in cost-volume-profit analysis?

    <p>Margin of Safety = (Actual Sales - Break-even Sales) / Actual Sales</p> Signup and view all the answers

    Study Notes

    Applications and Assumptions of Cost-Volume-Profit Analysis

    • Cost-volume-profit analysis uses the classification of variable versus fixed costs for informative purposes
    • It helps determine the quantity of break-even or the sales of break-even, essential for a business to stay afloat
    • The formula for determining break-even quantity is based on a simple equation
    • The analysis can also be used to determine the targeted income and for simulation or what-if analysis
    • It can be used to calculate the margin of safety, indicating how safe the company is in terms of reaching the break-even point
    • The degree of operating leverage (DOL) measures the percentage change in profit associated with a change in volume or sales
    • Managers typically assume constant selling price, linear costs, and constant product mix for CVP calculations
    • The contribution income statement helps managers assess the impact on profits of changes in selling price, cost, or volume
    • The contribution margin is the amount remaining from sales revenue after variable expenses have been deducted
    • Sales, variable expenses, and contribution margin can be expressed on a per unit basis
    • The contribution format income statement can be expressed in an equation
    • It simplifies the estimation of profits at a particular sales volume by multiplying the units sold above break-even by the contribution margin per unit

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    Related Documents

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    Description

    Test your knowledge of Cost-Volume-Profit (CVP) analysis with this quiz. Explore the applications and assumptions of CVP analysis, including break-even analysis, targeted income determination, margin of safety, and the contribution income statement. Evaluate your understanding of how CVP analysis aids in decision-making and performance assessment in business.

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