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Exam 1: Introduction to Managerial Accounting

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Question 21

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An opportunity cost is

A) the foregone benefit of the path not taken.
B) an actual outlay of cash.
C) the initial investment required to pursue an opportunity.
D) a cost that cannot be traced to a specific cost object.

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Question 22

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Which of the following is the correct sequencing of the managerial process?

A) Planning - Organizing - Control - Directing/Leading
B) Planning - Directing/Leading - Organizing - Control
C) Planning - Organizing - Directing/Leading - Control
D) Organizing - Directing/Leading - Planning - Control

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Question 23

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Conversion costs can be defined as

Prime costs include direct materials,direct labor,and manufacturing overhead.Taken together,direct materials and direct labor are referred to as prime cost.

For a cost to be relevant,it must be

Although there are numerous ways to categorize costs,each individual cost will only be classified in one particular way.A single cost can be classified in more than one way,depending on how the information will be used.

Investors,creditors and regulators are the primary users of managerial accounting information.Managerial accounting information is used by internal business owners and managers.

GAAP reporting rules require that all manufacturing costs be treated as

Since hospitals,universities,and charitable organizations do not exist strictly to earn profit for shareholders,managerial accounting information is not vital to their operations.Managerial accounting information is vital to nonprofit organizations,including hospitals,universities,and charitable organizations.Although these organizations do not exist strictly to earn profit for shareholders,their managers still need managerial accounting information to prepare budgets,manage resources,and make strategic and operational decisions.

Manufacturing costs are generally classified into which of the following categories?

All manufacturing costs are inventoriable costs.Manufacturing costs are product costs that are assigned to the product as it is being manufactured.Product costs are also called inventoriable costs because they are counted as inventory until the product is finally sold.

Financial accounting information is prepared according to generally accepted accounting principles.External financial statements are required to be prepared according to GAAP.

Which of the following changes introduced by the Sarbanes-Oxley Act is not one intended to reduce opportunities for error and fraud?

An actual outlay of cash is a(n)

Robin Company has the following balances for the current month: What are Robin's conversion costs?

Which of the following changes introduced by the Sarbanes-Oxley Act is not one intended to encourage good character?

Which of the following functions of management involves taking corrective action if needed?

Which of the following is not a characteristic of financial accounting?

Out-of-pocket costs involve an actual outlay of cash.Out-of-pocket costs are those paid for items purchased,and involve an actual outlay of cash.

A cost object is