Management accounting midterm

What is Six Sigma?

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D Managers do not use budgets for performance evaluation. In most firms different types of costs respond to widely different cost drivers.

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D Behavioral considerations are of primary importance in management accounting, but not in financial accounting. Many managers set prices by cost plus pricing. Studies by behavioral scientists and economists have shown that many people have a tendency to ignore or downplay the importance of opportunity costs. Most people attempt to justify past decisions. The formula is identical for 1, just substitute in the numbers for telescopes. For example, many of the costs in an automated environment are created by the operation of machines, and machine hours may be a suitable cost driver for overhead application. A Budgets help coordinate financial and operational activities. Activity-based budgets are an example of functional budgeting. It is important, however, that the benefits of having the cost driver information outweigh the costs of collecting it.

Assume it is a long run decision. When comparing management accounting and financial accounting, which of the following statements is FALSE? A Flexible budgets are prepared for a range of activity.

Managerial accounting midterm exam and solutions

A the cost-driver activity level is decreasing B the cost-driver activity level is increasing C variable costs per unit is decreasing D fixed costs per unit is increasing 5. The contribution margin per unit of a given product guides managers when deciding which product to emphasize in a sales mix. Human nature runs contrary to this idea. A all variable costs only B all variable costs and some fixed costs C all fixed costs only D all variable costs and all fixed costs D Flexible budgets are based on different assumptions about cost behavior than those used for static budgets. A unfavorable material efficiency; unfavorable labor usage B favorable material efficiency; unfavorable labor price C unfavorable material price; unfavorable labor rate D unfavorable material price; unfavorable labor usage Therefore, correctly identifying the relationship between costs and activities is crucial for reliable and accurate accounting information. A cost of the new machine B disposal value of old machine C book value of old machine D annual operating cost of old machine 2 years left What is cost plus pricing? When comparing management accounting and financial accounting, which of the following statements is FALSE? Activity-based budgets are an example of functional budgeting. A effect of sales volume changes on prices B effect of cost changes on prices C effect of price changes on sales volume D customers' attitudes toward price changes A the proportion of indirect costs to direct costs B the extent a particular cost is caused by a cost object C multiple cost drivers D the proportion of direct costs to indirect costs

C A flexible budget is also called a variable budget. A actual; expected B expected; actual C expected; planned D actual; projected 6.

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Budgetary slack helps buffer managers from budget cuts imposed by higher-level management. In using the distorted costs firms may be overpricing some products while selling others at a low.

Human nature runs contrary to this idea.

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Managerial Accounting Mid